Apple is developing its own power management chips, says analyst

The report from Bankhaus Lampe said that Apple is looking to replace a PMIC component now supplied by Dialog with its own custom silicon as soon as 2019. Dialog shares fell 36% this morning but are now down 15% from yesterday.

Unnamed industry sources, cited in Bankhaus Lampe's report, are said to have claimed that Apple will set up design centres to create the new technology in Munich and California.

Karsten Iltgen, an analyst at Bankhaus Lampe, warned about Apple's move eventually leading to a cut back on the use of Dialog's chips. One source claimed Apple is hiring away Dialog Semiconductor's top engineers saying, "They are poaching like insane". "They are poaching like insane", the person said.

The company will, according to the report (via Reuters), look to replace power management chips which are now supplied by Dialog Semiconductor. Spokespeople from Dialog and Apple didn't respond to requests for comment.

Shares in the firm were down 14.6 percent to 40.80 euros ($43.19) in late trading in Frankfurt, where Dialog Semiconductor is listed.

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It would mean Apple calling time on its existing arrangement with Dialog Semiconductor, which makes chips for existing iPhones. A large portion of Dialog's business comes from its relationship with Apple.

Over the past dozen years, Apple suppliers CSR, PortalPlayer, Sigmatel and Wolfson have been replaced, pushing them eventually to merge with more diversified players.

The Bankhaus Lampe follows UK-based Imagination Technologies announcement that Apple is designing its own iPhone GPU and won't use its chips within two years. Over the last decade, Apple has sold over 1 billion iPhones, and millions more iPads, laptops, and smartwatches.

Dialog has made several attempts to diversify beyond Apple and other smartphone customers in the past few years. The company saw its shares soar by a double in 2016, as the common expectation was that trade with Apple shall continue and flourish further in 2017, when the iPhone 8 is due to make a splash.

Iltgen, who has been covering the semiconductor maker for over 15 years, helped send the stock down nearly single-handedly.

  • Desiree Holland