Published: Thu, April 13, 2017
Tech | By Dwayne Harmon

Apple May Ditch Dialog, Analyst Says, Hitting Chipmaker's Shares

Apple May Ditch Dialog, Analyst Says, Hitting Chipmaker's Shares

Credit Suisse's prediction comes after Imagination Technologies, another Apple supplier, announced in early April that Apple was insourcing design of the graphics processing chips it had previously licensed from Imagination.

Apple already has planned to design its own graphics chip for the iPhone, but the company doesn't plan to stop there. That means the company will cut down supplies from its contractor - Dialog Semiconductor.

As evidence, the report cited 16 different job openings on Apple's website for analog/power management engineers for the design center in Munich alone. There is a confirmation from the industry that around 80 engineers at Apple are as of now taking a shot at a PMIC with particular arrangements to utilize it in the iPhone latest by 2019. It was the largest one-day drop in Dialog's share price since 2000, according to TheStreet. Dialog is reliant on Apple's custom as nearly 75 percent of its sales are to the Californian tech company. A separate report from Barclays Research is less pessimistic about Dialog's prospects and claims that Apple is unlikely to fully cut off its relationship with the component maker. Today, it is Dialog Semiconductor's time to face the music according to Bloomberg. "We do not see them remotely in a similar position", said Andrew Gardiner, an analyst at Barclays Plc, in a research note.

Apple is said to be developing a new battery management chip, aimed at making the power pack in future iPhones last far longer.

Shares in highly diversified chipmaker STMicro, which analysts believe supplies light sensors for iPhones, fell 3.6 percent, weighing on the benchmark STOXX Europe 600 Technology.SX8P index, which was down 1.5 percent. A source familiar with the matter confirmed to Reuters that Apple was recruiting top Dialog engineers in Munich.

The news that Apple might be shifting towards a more self-reliant chip production model has slightly scared the semiconductor sector as a whole.

With Apple selling hundreds of millions of units of the iPhone annually, it would make sense for Apple to start looking into designing and developing its own chips so that new technology can be introduced to devices faster.

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