Dialog cashes in on Apple relationship

October 11, 2018 //By Nick Flaherty
Dialog cashes in on Apple relationship
Dialog Semiconductor has signed a $600m deal with Apple for its power management technology that includes the transfer of 300 European engineers.

Dialog will receive $300m for licensing its technology to Apple and transferring designs across, and Apple will pre-pay $300m for power management chips over the next three years. 300 engineeers across Europe will move over to Apple as part of the deal along with their offices.

Working with Apple can be a two-edged sword, which Dialog was well aware of. This year, 75% of its money will come from Apple, making it vulnerable to losing design slots, and it won't see revenue from the 2019 iPhones or iPads. The deal will reduce the reliance on Apple, which by 2022 will be around 35% of Dialog's revenue as the company focusses more on the Internet of Things (IoT) and automotive with customers such as Google, Sony and Toshiba. However, that may fall faster than expected as Apple is increasingly bringing key semiconductor technology in-house through those 300 engineers, despote some joint development projects.

Apple will take over sites at Swindon, UK, Livorno, Italy and Nabern and Neuaubing in Germany. This leaves Dialog with 1800 employees.

“This transaction reaffirms our long-standing relationship with Apple, and demonstrates the value of the strong business and technologies we have built at Dialog," said Jalal Bagherli, CEO of Dialog. "Going forward, we will have a clear strategic focus, building on our custom and configurable mixed-signal IC expertise and world-class power-efficient design. Our execution track record, deep customer relationships, and talented employees give us great confidence in our future growth prospects. We believe that this transaction is in the best interests of our employees and shareholders who will benefit from a business with enhanced focus, strong growth prospects and additional financial flexibility to invest in strategic growth initiatives.

“Dialog has deep expertise in chip development, and we are thrilled to have this talented group of engineers who’ve long supported our products now working directly for Apple,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies. “Our relationship with Dialog goes all

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