Apple, Dialog Semiconductor strike deal for chip research and development

Dialog Semiconductor has announced an agreement with Apple to license certain of its power management technologies, transfer certain of its assets and over 300 employees to Apple to support chip research and development. Currently, Dialog supplies the power management chips for iPhones, iPads, and Apple Watches.

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Apple will pay $300 million in cash for the transaction and prepay $300 million for Dialog products to be delivered over the next three years. The employees who are being transferred have worked closely with Apple for many years, and this transition will foster deeper collaboration between the two companies, according to Dialog CEO Jalal Bagherli.

Dialog also announced that it’s been awarded a range of new contracts from Apple for the development and supply of power management, audio subsystem, charging and other mixed-signal integrated circuits. Revenue from the new contracts is expected to be realized starting in 2019 and accelerating in 2020 and 2021.

Apple will employ more than 300 Dialog engineers and other employees already supporting Apple chip development, representing approximately 16% of Dialog’s total workforce. Apple will assume certain Dialog facilities in Livorno (Italy), Swindon (U.K.), 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,” Johny Srouji, Apple’s senior vice president of Hardware Technologies, said in a press release. “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.”

The transaction is expected to be completed in the first half of 2019, subject to applicable regulatory approvals and other customary closing conditions.