Apple has announced its intent to purchase part of Dialog Semiconductor, a company it’s worked with over the entire life of the iPhone. Out of the $600M deal, $300M goes to a direct payment for a portion of Dialog’s assets, including employees, corporate IP, and licensing various power management technologies, while the other $300M constitutes an advance payment for technology Dialog is expected to bring to market over the next three years. Apple will acquire some 300 Dialog staff, which is roughly 16 percent of the company workforce.
“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 Apple SVP of hardware technologies, Johny Srouji, in a statement. “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.”
Apple’s acquisition is believed to underscore how serious the company is about continuing to design and manufacture its own hardware. At a time when many companies have divested from doing their own design work and instead license cores, Apple has chosen to go the other route — and it’s paid huge dividends for the company. Its ARM processors feature the highest single-threaded performance you can purchase, though this may have also contributed to the problems the company faced last year when it was found to be lowering phone performance rather than allowing finer-grained control over CPU burst modes and battery life. Apple later changed its policies following considerable user outcry.
Dialog’s remaining employees will focus on IoT networks, mobile, and automotive, with a focus on providing mixed-signal integrated chips. It’s interesting to see Apple taking this step to acquire Dialog’s power management when it passed on an equivalent move it could have made several years ago. Imagination Technologies was in a similar position to Dialog. It had a relationship with Apple in which it provided a critical block of IP to the overall device and being Apple’s leading customer was a huge percentage of Imagination Technologies’ total business.
In that case, however, Apple eventually decided to start building its own GPUs. The impact on Imagination Technologies was considerable. The company was ultimately sold at firesale prices following Apple’s decision to stop licensing Imagination GPUs and build its own instead. In this case, Apple apparently decided it was more cost-effective to pay for Dialog’s expertise than to attempt to replicate it elsewhere.
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