FRANKFURT, April 11 Dialog Semiconductor
risks losing a crucial supply deal with Apple Inc
, according to a financial analyst who cut his rating on
the stock on Tuesday, sending the Anglo-German chipmaker's
shares down by as much as one-third.
Bankhaus Lampe cut its rating on Dialog to "sell" from
"hold" as it argued in a research note that Apple was working on
its own battery-saving chip for the iPhone that could replace
Dialog's power management integrated circuits (PMIC) as early as
Apple accounted for more than 70 percent of Dialog's 2016
sales, the broker estimated.
Shares in Dialog fell as much as 36 percent to a seven-month
low. By 0831 GMT they were trading down 23.7 percent at 36.39
Bankhaus Lampe cited unnamed industry sources as saying that
Apple is setting up power management design centres both in
Munich and California and added that Apple already has around 80
engineers working on a power management chip of its own.
"In our view, there is strong evidence that Apple is
developing its own PMIC and intends to replace the chip made by
Dialog at least in part," Bankhaus Lampe analyst Karsten Iltgen
A source familiar with the matter confirmed that Apple was
recruiting top Dialog engineers in Munich. "They are poaching
like crazy," the person said.
A Dialog spokesman declined to comment. He added that the
company is not planning to release any official statement.
The downgrade comes after Imagination Technologies
was advised by Apple that it planned to replace Imagination's
graphics chip designs in upcoming products, sending shudders
through Apple's global component supply chain.
Imagination shares plunged 70 percent on the news last week
Iltgen is a four-star rated analyst for the accuracy of his
earnings estimates on Dialog and ranks sixth among 16 analysts
covering the stock, according to Thomson Reuters data.
Dialog has made several failed attempts to diversify beyond
Apple and other smartphone customers in recent years.
In 2014, merger talks between Dialog and Austrian sensor
chip maker Ams AG fell apart after they failed to come
to terms. Its plans to buy U.S.-based Atmel in 2015 were
derailed after Microchip swooped in with a higher bid.
(Reporting by Harro ten Wolde and Eric Auchard; editing by