Apple inks $600 mn pact with Dialog Semiconductor

In line with its efforts to build faster chips, Apple has committed $600 million to buy a part of Dialog Semiconductor and also purchase products from the remaining part of the chipmaker which is headquartered near London.

The pact involves Dialog giving Apple license to certain of its power management integrated circuits (PMICs), transferring certain of its assets and over 300 employees to Apple to support chip research and development.

Apple will pay $300 million in cash for the transaction and prepay $300 million products to be delivered over the next three years, Dialog Semiconductor said in a statement on Thursday. 

"We believe that this transaction is in the best interests of our employees and shareholders who will benefit from a business with enhanced focus, strong growth prospects and additional financial flexibility to invest in strategic growth initiatives," Jalal Bagherli, CEO of Dialog, said in a statement.

While Dialog is describing this as an asset transfer and licensing deal, it will be Apple`s biggest acquisition by far in terms of people, TechCrunch reported. With this deal, Apple will assume certain Dialog facilities in Livorno (Italy), Swindon (UK), Nabern and Neuaubing (Germany).

"Dialog has deep expertise in chip development, and we are thrilled to have this talented group of engineers who`ve long supported our products now working directly for Apple," said Johny Srouji, Apple`s Senior Vice President of Hardware Technologies.

"Our relationship with Dialog goes all the way back to the early iPhones, and we look forward to continuing this long-standing relationship with them," Srouji said.

Dialog also announced that it has been awarded a broad range of new contracts from Apple for the development and supply of power management, audio subsystem, charging and other mixed-signal integrated circuits. 

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Revenue from the new contracts is expected to be realised starting in 2019 and accelerating in 2020 and 2021. Dialog said it would continue to deliver PMICs to other customers globally.