Apple takes $600m bite out of UK-based chip maker

Vendor's deal with Reading-based Dialog Semiconductor will see it assume control of 16 per cent of Dialog's workforce

Apple has agreed a $600m (£453m) deal with UK-based chip maker Dialog Semiconductors that will see it buy part of the firm for $300m and put down $300m in advance for future purchases.

Apple will assume control of certain Dialog patents and a team of 300 engineers, as well as offices in Swindon, Italy and Germany. It will also license tech related to power management.

Frankfurt Stock Exchange-listed Dialog has been providing the tech giant with chips for the iPhone since the product launched a decade ago.

Earlier this year, Dialog saw its share price fall when it announced that the tech giant was planning to use chips from another supplier, according to Bloomberg.

Jalal Bagherli, Dialog CEO, said: "This transaction reaffirms our long-standing relationship with Apple, and demonstrates the value of the strong business and technologies we have built at Dialog.

"Going forward, we will have a clear strategic focus, building on our custom and configurable mixed-signal integrated circuits (IC) expertise and world-class power-efficient design.

"Our execution track record, deep customer relationships, and talented employees give us great confidence in our future growth prospects.

"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."

The chip-maker also announced that Apple has awarded it a range of new contracts, including for the development and supply of power management, audio subsystem, charging and other mixed-signal ICs.

The deal is expected to be completed in the first half of 2019 and will see Apple hand over $300m in cash for Dialog products to be delivered over the next three years.

Johny Srouji, VP of hardware technologies at Apple, said: "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.

"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."

Dialog - which reported a revenue of $296m in its second quarter of this year - stated that its revenue for 2018 would not be affected by the agreement ,adding that it will continue shipments of products in production to Apple.