Dialog expects to supply chips to Apple through 2020

Updated 2018-03-05 11:45:02

Dialog Semiconductor, whose biggest single shareholder is China's top State silicon chipmaker, expects Apple Inc to use its chips for a significant proportion of its devices in 2019 and 2020, the company's CEO told a German newspaper.

"Apple at the start of the year commissioned us with the design of chips for many devices for 2019 and 2020," weekly Euro am Sonntag quoted Dialog CEO Jalal Bagherli as saying in an interview published on Saturday, without providing details.

Tsinghua Unigroup holds about 9 percent of voting rights in the group.

Dialog's stock has lost more than half of its value over the past year on investor concerns that Apple is working on its own battery-saving chips for iPhones.

Analysts estimate that Dialog derives more than half its revenue from supplying Apple with power management integrated circuits.

Dialog in December acknowledged that Apple could develop its own power chips. It said at the time there was no risk to its existing supply deals in 2018 and that it was in the advanced stages of working with Apple on designing"2019-type products" that could lead to commercial contracts by this month.

"Negotiations over that chip are still ongoing. But we expect to deliver a chip design for testing in the customer's system in the second half of the year," Bagherli told Euro am Sonntag.

He also said that he saw no need for Dialog to develop a defense against possible hostile takeover attempts following the drop in its market value.

"A defense, including an anchor shareholder or poison pills to scare off bidders, are not in the interest of a stock-listed company," he said.

Almost 89 percent of shares in Dialog are freely traded, according to Thomson Reuters data.

Dialog Semiconductor said in December 2017 that entities controlled by Tsinghua Unigroup had further increased their holdings in the Anglo-German company to 9 percent, according to Reuters.

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