iPhone chipmaker dives after Apple confirms plans

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chips
This is why you don't put all your eggs in the Apple basket!
Photo: Intel

Shares in Anglo-German company Dialog Semiconductor plunged today after the chipmaker admitted that Apple was cutting its orders by around 30 percent this year.

Dialog shares fell 17 percent on Friday, based on the company telling investors that Apple will be using its chips for only two of its three new iPhones for 2018.

While the reduced orders won’t immediately affect Dialog’s bottom line by more than 5 percent, it has investors worried about the future. That’s because Dialog gets the majority of its money from Apple. In 2017, Apple orders accounted for 77 percent of the company’s group sales.

The Apple news also had a small impact on Austrian sensor supplier Arms AG and French-Italian company STMicroelectronics. Shares in the former fell by 1.4 percent, while the latter dropped 0.4 percent.

Uncertainty for Dialog

News about Apple slashing orders was hailed as a surprise. Nonetheless, this isn’t the first time we’ve heard about this possibility.

Last year, a report claimed that Apple planned to use its own chips starting 2018 or 2019. That news was shared by Dialog Chief Executive Jalal Bagherli, speaking with a German newspaper. “Apple at the start of the year commissioned us with the design of chips for many devices for 2019 and 2020,” Bagherli said.

Based on today’s report it seems that Apple won’t be creating its own chips, however. Instead it is turning to another company to produce some of the power management chips for one of its next-gen iPhones.

(This is yet another piece of evidence to suggest that Apple will debut three new phones this year.)

Source: Reuters