Dialog Semiconductor drops as much as 18% after Bankhaus Lampe downgrades stock to sell from hold, citing “strong evidence” that Apple is developing its own power management chip and intends to replace the one made by Dialog at least in part.
- Lampe says has been observing much stronger interest in engineers of analogue and power management chips from Apple in its hiring activities for a little over a year
- Says about 80 engineers at Apple are already working on a PMIC with specific plans to employ it in the iPhone by as early as 2019, citing unidentified industry sources
- Sees “a few similarities” with Imagination Technologies, customer diversification seems more important than ever
- Stock no longer trading at a discount to broader semiconductor peer group, which is needed due to the single client risk
- Sees risk for a disappointment in the outlook for 2Q
- NOTE: Apple accounts for ~74% of Dialog’s revenue, according to Bloomberg data