Apple Acquires Part of European Chipmaker Dialog Semiconductor in $600 Million USD Licensing Deal

Apple is buying part of European chipmaker Dialog Semiconductor in an effort to bring more of its silicon design in-house.

According to a new report from TechCrunch, Dialog Semiconductor has struck a $600 million USD deal with Apple to license its power management technologies and transfer some of its assets and 300 R&D staff to the U.S. technology firm.

Apple will pay the UK-based firm $300 million USD now plus another $300 million in the future for delivery of products. It also awarded Dialog a number of new contracts for power management, charging and audio subsystem chips.

“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.”

Since the iPhone first debuted a decade ago, Apple has used Dialog power-management chips to extend their battery life. Under the deal, Apple is buying patents, a 300-strong engineering team, most of whom already worked on chips for Apple devices, and Dialog offices in Britain, Italy, and Germany.

Dialog said in a statement it would continue to deliver chips to other customers, focusing on the automotive and internet-of-things markets, among others.

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

The deal comes almost a year after Dialog warned investors that Apple — its biggest customer — could design its own power-management chips in the coming years. Dialog relies on the Cupertino company for about three-quarters of its revenue, predominantly through the supply of chips that handle charging and manage power in smartphones.

“Dialog has bought itself much more than just time,” said Karsten Iltgen, an analyst at Bankhaus Lampe. “Its Apple business has been clearly defined and put on a sound long-term footing.”