Apple Begins Transition to Its Own Power Management Chips, Cuts Dialog Orders by 30%

Apple Begins Transition to Its Own Power Management Chips, Cuts Dialog Orders by 30%

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Apple has begun transitioning to in-house power management chips, reducing its order for chips from Dialog Semiconductor by 30%, reports the Financial Times. Dialog confirmed Apple's plans in a statement released today.

The Anglo-German company said Apple had decided to order 30 per cent fewer of the chips despite reassurances less than six months ago that business this year would not be hit by “potential actions by Apple”.

Dialog expects the reduction in orders to lower FY 2018 revenue by approximately 5% and sees similar reductions in subsequent years as Apple continues moving towards its own chips.

“I would expect there would be a similar reduction [in demand for the power management chips] next year but beyond that I don’t know,” said chief executive Jalal Bagherli. “We are making a lot of new inroads with new customers.”

Three quarters of Dialog's revenue comes from Apple and the company has already lost over half its value after announcing the prospect of Apple developing its own chips.

You can read today's announcement below:

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Dialog Semiconductor has been provided with a reduced share of the volume forecast from Apple for the main Power Management IC (PMIC) for the 2018 smartphone platform. The projected volume for the sub-PMIC in the 2018 smartphone platform and all other PMICs including those for tablets, wearables, and notebooks, remains unchanged.

This is the first time one of our custom PMICs for the smartphone platform is being dual sourced and it is estimated to reduce the FY 2018 revenue by approximately 5%. The company still expects revenue growth in FY 2018. As in previous years, revenue performance will be strongly weighted towards the second half of the year.

Dialog understands its continued role as Apple's main PMIC supplier is contingent on Dialog meeting Apple's technology, quality, price and volume expectations, as well as continuing to develop advanced technology to meet Apple's requirements. Dialog also intends to continue to explore new mixed-signal opportunities outside of power management for future Apple products.
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Apple Begins Transition to Its Own Power Management Chips, Cuts Dialog Orders by 30%

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