Apple Inc is designing its own main power management chips for use in iPhones as early as in 2018, the Nikkei business daily reported on Thursday, triggering slide of over 20 percent in shares of Dialog Semiconductor Plc.
If confirmed, the move would reduce Apple’s dependence on the Anglo-German chipmaker, which itself is heavily reliant on the smartphone industry and has been trying of late to diversify its customer base. Dialog stock was trading down 16 percent in Frankfurt trading at 31.01 at 1420 GMT on Thursday.
Investors are especially jittery after Apple said earlier this year it planned to replace another supplier, Imagination Technologies, a maker of graphics chips, sending the London-listed stock down 70 percent in a single session.
Following the collapse of its share price, Imagination put itself up for sale and it was sold off in two separate deals. In the past dozen years, Apple has dropped several smaller chip suppliers, forcing them to eventually merge with bigger players.
Responding to the Nikkei report, which quoted unnamed sources, a Dialog spokesman said its business situation had not changed.
“The level of visibility into the design cycle of our leading customers remains unchanged and the business relationships are in line with the normal course of business,” the spokesman said.
Apple did not immediately respond to a request for comment on the report.
“Based on Apple’s current plan, they are set to replace partially, or around half of its power management chips to go into iPhones by itself starting next year,” a source said, according to Nikkei. (s.nikkei.com/2Al5nSl)
A second person cited by Nikkei said that Apple was indeed developing power management chips for iPhones but that a rollout may be delayed until 2019.
Further, the Apple-designed chips would be solely manufactured by Taiwan Semiconductor Manufacturing Co , according to industry sources cited by the newspaper.
TSMC, the world’s biggest contract chipmaker, has been Apple’s sole supplier of core processor chips for iPhones since 2016 and it also makes Dialog’s power management chips.