Dialog Semiconductor yesterday announced its Q1 earnings, and CEO Jalal Bagherli played down the possible loss of future business with Apple. The company designs power management chips used in iPhones, and the Cupertino company is estimated to account for around 70% of its income.

Announcing revenues up 23% year-on-year to £332M but profit down 25% to $17.4M, Bagherli tried to strike a positive note as the company waits for news from Apple …

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Nikkei reported in November of last year that Apple was developing its own power management chip designs. Dialog later acknowledged that its contract to design future power management chips to Apple could be at risk, its share price falling 19% in response. The company’s CEO said then that he had no hard information on Apple’s plans, but acknowledged that the iPhone maker did have the capability to design its own chips, and could potentially choose to do so in the next few years.

In March, the company announced that it had a contract for chips into 2020, though details were vague, Bagherli saying only that the chips would be used ‘for many devices.’ This left open the possibility that orders might be for some iPhones only, Apple designing its own chips for other models.

Business Insider reports that Bagherli yesterday said that Dialog has a “continuing and growing” business with Apple, but that it still didn’t have firm information on this year’s orders.

I’m not aware of specific products being released or volume being planned or in preparation, but it is relatively early for 2019. It’s possible and I just want you to be aware.

It’s a continuing and growing business relationship on a number of areas and beginning more visibility of non-power products as well, which we’re very pleased with. And we hope to land the number of significant opportunities in those areas that we can report on in the future.

Analysts, however, are less optimistic.

Robin Brass, an equity analyst at Hauck & Aufhäuser, told Business Insider that he didn’t feel positive: “They don’t 100% know what will happen — Apple will not give them a final yes or no before the end of this year. They will have to wait until November for Apple to tell them exactly […]

It’s a little bit of a trend and, especially for power management, those are produced by Taiwan Semiconductor, it’s just that the design is by Dialog. It wouldn’t be a huge effort for Apple to do it in-house — they don’t need the capability for factories or thousands of workers, just 50 or 60 people who are experts.”

Dialog is one of a number of companies heavily dependant on Apple orders for roughly half or more of their revenues.

Image: FT


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