Apple is paying £455 million ($600 million) to UK-based Dialog Semiconductor as part of a licencing agreement that will strengthen its position in chips in Europe.
Apple will pay half the amount for the initial deal and the other half for Dialog products over the next three years.
In the process, the tech giant will take Dialog’s power management technologies, certain assets, and 300 employees, who are already working with Apple.
Apple will also assume control of Dialog facilities in Livorno in Italy, Nabern and Neuaubing in Germany, and Swindon in the UK.
Dialog CEO Jalal Bagherli said: “This transaction reaffirms our long-standing relationship with Apple, and demonstrates the value of the strong business and technologies we have built at Dialog.
“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.
“We believe that this transaction is in the best interests of our employees and shareholders who will benefit from a business with enhanced focus, strong growth prospects, and additional financial flexibility to invest in strategic growth initiatives.”
Dialog said it will accelerate investments in growth across IoT, mobile, automotive, and computing and storage as a result of the deal.
The UK company has also been awarded new contracts from Apple for the development and supply of power management, audio subsystem, charging, and other mixed-signal integrated circuits.
Apple Dialog Partnership “Stretches Back to Early iPhones”
Dialog provides integrated circuits (IC) for mobile and IoT devices that help increase power efficiency and shorten charging times. It has had a partnership with Apple as far back as the early iPhones.
The company’s shares reportedly fell earlier this year after it warned investors that Apple was using its own power management (PM) chips for iPhones. However, Dialog is said to have PM chips in the recently released iPhone XS and iPhone XS Max models.
Dialog’s 2018 revenue will not be affected by the agreement and the company will continue shipments of products currently in production.
The deal is expected to be completed in the first half of 2019, subject to conditions. Dialog plans to initiate a share buyback program of up to 10 percent of its outstanding shares following its Q3 trading update.
Dialog posted $1.35 billion in revenue last year and has around 2,100 employees globally.