Apple pays hundreds of millions of dollars to acquire engineers, patents and offices from one of its British suppliers
Apple has made one of its most expensive acquisitions in recent years with the news that it acquiring parts of the business of UK-based Dialog Semiconductor.
Apple is to pay $600m (£454m) for a combination of patents, engineers, and facilities in multiple countries, as it seeks to control the Dialog power management integrated circuits (PMICs) found in all nearly iPhones.
Apple has been seeking to more closely control the tech used in its devices such as OLED screens and other components, and it comes as President Trump seeks to persuade tech firms to bring their development and manufacturing back to America.
And now Dialog has announced “an agreement with Apple Inc to license certain of its power management technologies, transfer certain of its assets and over 300 employees to Apple to support chip research and development.”
Under the terms of the transaction, Apple will pay $300 million in cash upfront and prepay $300 million for Dialog products to be delivered over the next three years.
The 300 engineers (which represents 16 percent of Dialog’s workforce) who are being transferred to Apple have apparently “worked closely with Apple for many years, and this transition will foster deeper collaboration between the two companies.”
Dialog also said that it has been awarded “a broad range of new contracts from Apple for the development and supply of power management, audio subsystem, charging and other mixed-signal integrated circuits..”
“This transaction reaffirms our long-standing relationship with Apple, and demonstrates the value of the strong business and technologies we have built at Dialog,” said Jalal Bagherli, CEO of Dialog. “Going forward, we will have a clear strategic focus, building on our custom and configurable mixed-signal IC expertise and world-class power-efficient design.”
In addition to the 300 Dialog engineers, Apple will assume acquire certain Dialog facilities in Livorno (Italy) and Swindon (UK), as well as Nabern and Neuaubing (Germany).
“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 Johny Srouji, Apple’s senior vice president of Hardware Technologies.
“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.”
The acquisition of parts of Dialog is a good move for the British firm, considering what has happened to previous Apple suppliers.
Last year British chip designer Imagination Technologies put itself up for sale after a chip licensing row with Apple threatened its survival.
It was eventually sold to a Chinese-backed fund last year.
Imagination’s spat with Apple began in April 2017 when it was revealed that Apple planned to stop paying Imagination royalties for the graphics technology used in iPhones, iPads, Apple Watches and other mobile devices.
That news crashed the shares in the UK company by at least 60 percent.
This was because Apple was Imagination’s largest customer, and accounted for around half its annual revenue. It is also an 8 percent shareholder, but Apple had previously denied any intention to buy the British firm.
Then to add insult to injury, Apple also rented an office not far from the headquarters of Imagination Technologies fuelling concerns it was poaching key staff.
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