Apple and Dialog have sealed a complex deal worth $600 million that includes licensing the chip makers power-management technology, hiring 300 of its employees, and a long-term purchasing agreement. In a press release this morning, Dialog confirmed terms of the deal. Apple will pay $300 million to Dialog, a supplier of power-management chips used in iPhones, which will give Apple licenses to Dialogs technology. In addition, Apple will bring on board 300 of Dialogs engineers and take possession of several of its offices in Europe. Apple also agreed to spend $300 million purchasing Dialog chips over 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. As Apple expands its portfolio of products, battery life and power management have become increasingly critical. But Apples increasing investment in developing its own chips has created growing uncertainly for many of its component suppliers, including Dialog. News of the deal sent Dialogs stock higher in trading.
Apple is buying part of European chipmaker Dialog Semiconductor in an effort to bring more of its silicon design in-house. The deal includes $300 million in cash to license some of Dialogs power management technologies, acquihire 300 engineers, and take control of some assets. A further $300 million is being committed for products from Dialog over the next three years. As TechCrunch notes, this is Apples biggest acquisition ever when it comes to headcount. While Apple isnt acquiring Dialog outright, the 300 engineers make up 16 percent of its total workforce, and are said to have been working closely with Apple on chip design for years. Dialog has deep expertise in chip development, and we are thrilled to have this talented group of engineers whove long supported our products now working directly for Apple, hardware SVP Johny Srouji says in a statement. 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. Last year the Nikkei reported that Apple was looking to design its own power management chips and move away from Dialog; earlier this year Dialog said Apple had cut orders, and teardowns suggest that Apple may have started using its own design in place of a certain Dialog chip in the iPhone XS Max. This acquihire is likely a way to bring Dialogs R&D under Apples umbrella, with future designs becoming Apple IP that the company is free to use and modify at will.