Apple to buy parts of European chipmaker Dialog Semiconductor in $600m deal

Emily Nicolle
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Dialog makes the chips inside Apple's iPhone and iPad, but it now hopes to expand to IoT products such as smart speakers and watches (Source: Getty)

Apple said today it has entered into a deal to acquire parts of European iPhone chipmaker Dialog Semiconductor, in a deal valued at $600m (£454m).

Apple will gain some patents and a team of engineers from the chip designer, and cement a three-year contract for Dialog to continue building chips for its iPhone and iPad products.

The transaction is the largest of its kind ever done by Apple, beating out the $350m acquisition of Face ID pioneer Primesense in 2013.

Dialog's share price in Germany rose as high as 34 per cent as the news broke, rebuilding some of the loss it took when it said Apple planned to use other manufacturers for its chips in future.

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Sales to Apple count for around three-quarters of its annual revenue, which it hopes will reduce to around 35-40 per cent in 2022.

Its chief executive Jalal Bagherli told Reuters he now intends to focus on creating a "managed, smooth" transition of Dialog Semiconductor as it expands into new territories, including the Internet of Things sector which houses products such as smart speakers and watches.

Some of the 300-strong team heading to Apple will hail from Dialog's offices in Swindon, as well as Italy and Germany. It is thought they will join Apple's existing chip design centres in Munich and St Albans.

Expected to close in the first half of next year, Dialog is anticipating annual operational savings of around $35m from the deal. A share buyback programme will now be initiated for up to 10 per cent of Dialog stock, following its next quarterly trading update.