Apple is set to augment its team of computer chip engineers by 300 through a deal it struck with one of its key chip suppliers.
The deal with Dialog Semiconductor is worth $300m and it also encompasses some patents and facilities of the Reading-based company.
Dialog has been a supplier of chips to Apple for a long time and the chips manufactured by Dialog essentially monitor and control power consumption and help to conserve battery power in Apple’s devices such as iPhones and iPads.
This is amongst the largest deals of Apple in terms of manpower.
“Dialog has deep expertise in chip development and we are thrilled to have this talented group of engineers who have long supported our products now working directly for Apple,” said the Johny Sriuji, the chief of hardware ye\\technology at Apple.
Staff who are involved in the deal are currently based in Swindon and Livorno in Italy, Nabern and Neuaubing in Germany.
Computer processing units (CPUs) are already being designed by the Californian, US based company and Apple last year had announced the end of its business relationship with another UK company, Imagination Technologies, so that it could create and design its own graphics processing unit.
There was a drastic drop of 20 per cent in the shares of Dialog after rumour mills were abuzz last November that Apple would soon phase out purchase of chips from Dialog.
But those rumours were found to be unfounded after the announcement by the iPhone marker that it had prepaid an amount of $300m to Dialog to ensure constant supply of its chips over the next three years.
Experts say that Apple wants to be in control and that explains the deal.
“In the industry this kind of move is known as being more vertically integrated,” said Ian Cutress, senior editor at the engineering-focused news site AnandTech. “It’s something that’s already true of Samsung and its smartphones – for example it also makes its own displays.
“The benefits for Apple having full control at the component level should be lower overheads and therefore reduced costs.
“But a downside could be there’s less fallback if something goes wrong.”
The deal is expected to be closed with the first six months of 2019, Dialog said.
He hoped his company’s relationship with Apple would continue beyond 2021m said Dialog’s chief executive to the BBC. However, this was also an opportunity for Dialog to reduce it dependency on Apple, he said.
“For us to change in any other way would be more painful,” said Dr Jalal Bagherli.
“They wanted to create their own solutions in-house. And we could accelerate that, but in the process monetise some of our intellectual property assets and also find a home for many of our employees in a good company – I think it’s a win-win situation.”
British chip makers has not had a good time recently with Japan’s SoftBank purchasing UK’s best known computer chip designer ARM and China backed investment company Canyon Bridge buying out Imagination Technologies.
(Adapted from BBC.com)