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Dialog being sold as Apple transitions to its own chips


Dialog is being sold to a Japanese chipmaker in what the company has described as a ‘compelling opportunity’ for its shareholders. The company has historically depended on Apple orders for power management chips for three-quarters of its sales, but has been working hard on moving into new markets as this business came under threat.

The deal was struck at a 20% premium over the company’s share price at Friday’s closing, and is being unanimously recommended by Dialog’s directors …

Business Insider reports.

Japanese chipmaker Renesas Electronics Corp has agreed to buy Dialog Semiconductor, an Apple supplier, for 4.9 billion euros ($5.9 billion) in cash.

Renesas, one of the world’s biggest auto chip makers, has offered 67.50 euros a share for Dialog, representing a 20% premium to Friday’s closing price and a 52% premium to a weighted three-month average. Dialog is listed in Frankfurt and headquartered in the UK […]

Dialog shares traded 16% higher in Frankfurt at 65.30 euros, just shy of the agreed sale price. The Anglo-German chip designer confirmed on Sunday that it had received an offer from Renesas in response to news reports it was a takeover target.

Dialog power management chips have been used across a wide range of Apple products. That business first started to look shaky way back in 2017 when it admitted that there were indications that Apple might in future want to design its own chips, though Dialog downplayed the risk at the time.

It announced in 2018 that it still had deals with Apple running into 2020, though it was vague on the extent of these – and Apple cut its orders shortly afterwards.

It turned out that Apple did still need Dialog’s expertise to progress its own plans, licensing intellectual property and hiring 300 of its engineers.

Dialog subsequently found new markets in fitness trackers, wireless earphones and the automotive sector. A Bloomberg report suggests the latter market was the attraction for Renesas.

Renesas, which has a market value of $20.5 billion in Tokyo, is one of the largest suppliers of semiconductors used in cars. […]

Dialog and Renesas have been working together for over a decade. The U.K. company, which specializes in designing power management chips, said in August that it would collaborate with Renesas on car computing platforms.

Apple of course began ditching Intel CPUs for Macs last year, and has been gradually working on making more of its own chips in areas like power management and modems. The company’s long-term ambition is likely to be able to use Apple Silicon for as many components as possible.

Photo by Nic Wood from Pexels

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