Apple is developing its own power management chips, says analyst

It appears that Apple is developing its own power management chips, according to a report from German private bank Bankhaus Lampe. The release of the report Tuesday led to a sharp drop in the shares of Dialog Semiconductor, the current supplier of these chips to the iPhone maker.

“The teams of both companies collaborate very closely and thus, Dialog cannot be replaced by a third-party supplier. However, Apple itself could replace Dialog,” wrote analyst Karsten Iltgen.

As evidence, the report cited 16 different job openings on Apple’s website for analog/power management engineers for the design center in Munich alone.

“A search on social networks such as LinkedIn revealed that Apple has already poached about 20 chip designers, some of them with long-standing experience, from Dialog,” said the report, which estimates that about 40 power-management chip engineers are currently working at the design center in Munich, with a similar number working in the area at the center in California.

Industry sources in Taiwan suggest that manufacturing of samples of a power management integrated circuit for Apple is already underway, Iltgen wrote. “The timetable seems to point to a potential application of the chips in the iPhone as of 2019,” the report said.

The reported developments at Dialog could turn out to be a rerun of what is happening at U.K. company Imagination Technologies Group, which announced recently that it had been informed by Apple that the iPhone maker will soon stop using its intellectual property for graphics processing units for its iPhone and other devices, as it is working on a separate, independent graphics design.

Imagination has questioned Apple’s ability to develop a GPU architecture from the ground up without infringing on the U.K. company’s intellectual property rights.

For Apple, the moves could mean greater control over the components of its iPhone and other devices as it gears up for competition from rivals like Samsung Electronics. Xiaomi recently rolled out in February the Mi 5c built around its own Surge S1 processor, while Samsung uses its Exynos processors for some of its smartphones.

An 80-person Apple power management chip team would be small compared to the 1,200 engineers at Dialog, including 900 chip designers, of which about 500 are believed to be working exclusively for Apple, according to the report.

The Apple operation has reached a size that is starting to represent a threat for Dialog, according to Iltgen, who believes that a complete shift to Apple’s in-house development is unlikely in the short term.

Apple and Dialog did not immediately comment.