Apple has agreed to buy key parts of Dialog Semiconductor for some $600 million as the Cupertino company bolsters their chip design and making efforts. The German based Dialog is giving Apple their patents along with a team of 300 engineers in the deal, as well as the company’s offices in the United Kingdom, Italy, and Germany.
The way the deal is structured, Apple will pay $300 million upfront with the remaining $300 million to be paid out over the next three years. Apple will license power management technology from Dialog as part of the agreement. The deal likely won’t close until 2019 as it has to go through regulatory approval.
Apple already uses Dialog Semiconductor chips in their products. The power management chip used in the iPhone, iPad and Apple Watch all come from Dialog so they are a known quantity to Apple. Indeed, Apple is Dialog’s biggest customer.
The agreement solidifies Dialog Semiconductor’s position in Apple’s supply chain and essentially locks the company in as their power management chip and technology supplier. The deal has been well received by investors, as you would expect, with Dialog’s stock raising some 35% in the Frankfurt stock exchange since the deal went public.
The agreement also means that Apple will have even more influence on the design of the power management chips going forward.