Shares of Dialog Plummet After Warning That Apple Might Make Chips

Dialog Semiconductor's stock has lost about a third of its value over the past week after it acknowledged that it could lose Apple as a major customer

Dialog Semiconductor's stock has lost about a third of its value over the past week after it acknowledged that it could lose Apple as a major customer

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.

Last week, a separate report by The Nikkei Business Daily claimed that Apple would make about half the iPhone's power-management chips starting next year, with another source saying this could be delayed to 2019.

The chip company, which is based in Reading and listed in Frankfurt, designs components that help prolong the iPhone's battery.

Dialog said it had no information to suggest Apple was getting ready to start making its own chips that soon.

However, it was acknowledged by the company for just the first time that Apple holds the capability and resources internally to design PMIC and could possibly do so within the next couple of years. However, Dialog revealed that it had received a special dispensation from Apple to mention it. The company is believed to derive the majority of its income from Apple.

Efforts by Dialog to assuage concerns did not seem to have satisfied investors, with the stock slipping 22 per cent following the release of the statement.

TRADEMARK VIOLATION NOTICE: "Dialog Semiconductor (DLG) Given a €43.00 Price Target by Credit Suisse Group Analysts" was originally published by Dispatch Tribunal and is the sole property of of Dispatch Tribunal.

"Dialog's comments today around Apple's ability (while not completely new) seem to have put more doubt in investors' minds about potential risk of dual-sourcing or even disintermediation in the future", Mr Sultania said.

China's top state silicon chipmaker has indirectly raised its stake in Dialog Semiconductor (DE:), whose share price has plummeted on signs it could lose its top customer Apple Inc (O:).

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