Apple and Dialog Semiconductor are strengthening its partnership through a technology licensing agreement. And some of Dialog’s engineers will be brought in to Apple. Specifically, Apple is going to employ over 300 of Dialog’s engineering team members to support its future chip research and development. The employees that are being transferred to Apple have already been working with the Cupertino giant for years.
As part of the deal, Dialog is going to receive $600 million for the licensing of certain power management integrated circuits (PMICs), the transferring of certain assets, and the prepayment for future product purchases by Apple. Of the $600 million, $300 million will be paid in cash for the transaction and $300 million is being prepaid for Dialog products to be delivered in the next three years.
“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 Dialog CEO Jalal Bagherli in a statement. “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. Our execution track record, deep customer relationships, and talented employees give us great confidence in our future growth prospects.”
In terms of the contracts, Dialog was awarded a broad range from Apple including the development and supply of power management, audio subsystems, charging, and other mixed-signal integrated circuits. The revenue from the new contracts is expected to start being realized in 2019 and accelerate in 2020 and 2021.
“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,” added Apple’s senior vice president of Hardware Technologies Johny Srouji. “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.”