Dialog shares plunge as company warns Apple could build its own power-management chips

Chipmaker Dialog Semiconductor has seen its shares drop by as much as 19% after admitting that its contract to supply power management chips to Apple could be at risk. The company is believed to derive the majority of its income from Apple.

This is, of course, not the first time that a company’s shares have dived following fears over loss of Apple business …

Imagination Technologies saw its own stock fall by 70% when Apple announced that it planned to stop using the company’s graphics chip designs within two years.

Dialog has taken a long time to respond to the suggestion that Apple is looking to design its own power management chips. This was first rumored back in April.

Reuters reports that Dialog’s CEO was keen to point out that it was simply admitting to a risk factor, and that it has not yet heard anything concrete about Apple’s plans.

Dialog said there was no risk to its existing supply deals in 2018 and it was in the advanced stages of working with Apple on designing “2019-type products” that could lead to commercial contracts by next March.

“Our position remains that we have seen no material change to our ongoing relationship with Apple Inc,” Chief Executive Jalal Bagherli told investors on a conference call.

However, Bagherli did admit that this could change within a few years.

Apple has the resources and capability to internally design a PMIC [power-management integrated circuits] and could potentially do so in the next few years.

The company said that it should have a better idea of future plans by March of next year.

Dialog and Imagination are just two of half a dozen companies which rely heavily on Apple orders, with percentages ranging from 48% to 74% of their business. Display driver maker Synaptics is another company said to be at risk from Apple’s drive to design its own chips.

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