Rumor: Apple may Replace Dialog Semiconductor's Power Management Chips with its own In-House Designs in 2019
According to a new report filed in Germany, Dialog Semiconductor risks losing a crucial supply deal with Apple Inc, according to a financial analyst who cut his rating on the stock on Tuesday, sending the Anglo-German chipmaker's shares down by as much as one-third.
Reuters Frankfurt reported that financial analyst "Bankhaus Lampe cut its rating on Dialog to 'sell' from 'hold' as it argued in a research note that Apple was working on its own battery-saving chip for the iPhone that could replace Dialog's power management integrated circuits (PMIC) as early as 2019.
Apple accounted for more than 70 percent of Dialog's 2016 sales, the broker estimated.
Shares in Dialog fell as much as 36 percent to a seven-month low. By 0831 GMT they were trading down 23.7 percent at 36.39 euros.
Bankhaus Lampe cited unnamed industry sources as saying that Apple is setting up power management design centers both in Munich and California and added that Apple already has around 80 engineers working on a power management chip of its own.
Bankhaus Lampe analyst Karsten Iltgen advised investors that 'In our view, there is strong evidence that Apple is developing its own PMIC and intends to replace the chip made by Dialog at least in part.'
A source familiar with the matter confirmed that Apple was recruiting top Dialog engineers in Munich. 'They are poaching like crazy,' the person said.
A Dialog spokesman declined to comment. He added that the company is not planning to release any official statement."
Reuters has proven to be a decent source for stories and so we're posting this report. However, broker driven rumors can be driven by many factors, such as representing a competing company and wanting a competing stock to fall. Caution is always needed on Broker driven rumors.
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