Dialog Semiconductor Expects To Remain Apple's Main Supplier Of PMIC Designs

Dialog Semiconductor Expects To Remain Apple's Main Supplier Of PMIC Designs

Dialog Semiconductor Expects To Remain Apple's Main Supplier Of PMIC Designs

Dialog Semiconductor is finding out what happens when you put most of your eggs (or apples, perhaps) in one basket.

Shares in Dialog Semiconductor have slumped after the iPhone power chip maker raised the prospect of becoming the latest British firm to lose business from Apple.

Dialog supplies power management chips for Apple's iPhones, iPads and watches which accounts for three-quarters of its revenues previous year. Monday was the first time it has publicly acknowledged Apple could eventually replace its chips with in-house production.

On Monday, Dialog issued a statement confirming that it continues to supply Apple with the power management chips 'across a range of platforms without material change to its ongoing business relationship, ' but its chief executive said on a call with investors it would not know the commercial terms of Apple business for 2019 for a few more months, Reuters reported.

A lot is at stake. Royal Bank Of Canada set a €50.00 ($59.52) price objective on shares of Dialog Semiconductor and gave the stock a buy rating in a report on Friday, October 6th.

"This is a major disaster", said Tim Wunderlich, analyst at Hauck & Aufhauser.

That raised fears that Dialog could be vulnerable to the same decline in fortunes as Imagination Technologies, the United Kingdom chipmaker whose value collapsed in April after Apple said it would stop using its graphics processor designs.

Dialog Semiconductor has admitted that Apple, its biggest customer, could stop using its power management chips in the future, triggering the second major slide in shares in recent days.

Apple did not respond to a request for comment.

Imagination has since been sold to China-backed Canyon Bridge Capital Partners for -550 million ($740 million), well below the -2 billion ($2.7 billion) it was worth at its peak in 2012.

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