Apple may be ditching power chip partner as it looks to build its own

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chips
Apple is moving more and more of its chip development in-house.
Photo: Intel

Apple is apparently dropping Dialog Semiconductor, its U.K.-based power management chipmaker. If true, the move would lend increased credibility to rumors that Cupertino plans to design its own chips for future iPhones.

Dialog Semiconductor says that, for now, it continues to provide chips to Apple. But the company’s chief executive acknowledged that this arrangement could well change “in the next few years.”

Dialog currently relies on Apple for a large majority of its revenue. The news that Apple may be looking to develop its own power management chips first circulated online at the end of last week. Since then, Dialog shares have fallen by around one-third to their current 24 euros ($28) price.

Apple’s in-house chips are rumored to be the most advanced power management chips in the industry. In particular, they are said to possess impressive processing capabilities that allow them to more closely monitor and control power consumption — thereby letting iPhones and iPads deliver better performance on less juice.

Last week’s report suggested the chips could find their way onto iPhones beginning in 2018 or 2019. Apple won’t necessarily drop Dialog immediately, although it could scale back orders. In a call with investors, Dialog’s chief executive said that the company would not know the commercial terms of Apple business for 2019 for a few more months.

Dialog isn’t the first company to suffer the effects of Apple’s so-called “insourcing.” GPU maker Imagination Technologies also suffered due to Apple’s expanding chip development. For this reason, companies like Foxconn warn suppliers not to become too reliant on Cupertino’s business.

Still, if the report about Apple’s next-gen chips turns out to be true, Dialog’s loss could turn into iPhone users’ gain.

Source: Financial Times