Apple bets $600 million deal with chip supplier Dialog

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Apple has signed a $600 million deal with European chipmaker Dialog Semiconductor to license its power management technology and acquire certain assets.

 

Apple has been putting an effort into building faster and more efficient chips, which helps to differentiate its hardware from the rest of the consumer electronics pack.

Apple will pay $ 300 million in cash to buy a portion of Dialog semiconductor and prepay an additional $300 million for product delivery over the next few years.

“This as an asset transfer and licensing deal, it will be Apple’s biggest acquisition by far in terms of people”, said Dialog.

The 300 Dialog engineers who will now be Apple employees have reportedly already been working closely with the company. Those folks will continue to work out of offices across Europe as Apple takes over some Dialog Facilities in Italy, Germany and the UK.

Apple has added around 20,000 employees in Europe since 2000. It already has a chip design centre in Munich, Germany, St Albans and Britain. The deal will give Apple four more from Dialog, in Livorno in Italy, Swindon in Britain, and Nabern and Neuaubing in Germany.

“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 the way back to the early iPhones, and we look forward to continuing this long-standing relationship with them,” he added.

Apple’s acquisition of Dialog points to the company’s seriousness in making its own chips, particularly for power management. Apple already makes chips found in its iPhones and iPads.

With Dialog’s technology and IP, Apple will likely be able to develop a better power management chip than it could have on its own. After the acquisition, the remainder of Dialog’s company will focus on the IoT, automotive, computing and storage markets.

“The transaction is expected to close in the first half of 2019, subject to customary closings and regulator approvals”, Dialog said.

It expects savings of $35 million in annual operational expenses from the deal but declined to give more detail on its financial impact ahead of an investor presentation on November 1.

Image credit: The Times

 

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