Dialog Semi slump, banks weigh on European shares; volatility up

Bankhaus Lampe cut its rating on Dialog to

Bankhaus Lampe cut its rating on Dialog to"sell from"hold as it argued in a research note that Apple was working on its own battery-saving chip for the iPhone that could replace Dialog's power management integrated circuits as early as 2019

Dialog Semiconductor Plc's shares plunged the most in more than 16 years after an analyst warned that Apple Inc. probably will cut back on the use of the company's power-management chips.

Iltgen also noted that Apple plans on hiring more engineers to help produce its own battery-saving chips, on top of the reported 80 new engineers the technology giant recently hired.

Dialog's stock sank 20 percent to 38.26 euros at 12:05 p.m.in Frankfurt, giving the company a market value of 2.98 billion euros ($3.2 billion).

After signing a $9bn deal with Samsung for the manufacturing of OLED displays earlier this month, Apple is now speculated to be working on an in-house power management chip.

Broker Bankhaus Lampe cut its rating on the chipmaker to "sell" from "buy", warning that Apple could be developing its own PMIC. This proves yet again how important Apple's iPhone business really is, especially to smaller companies.

Last week, British graphics chip maker Imagination Technologies' stock dropped almost 63% after Apple announced it would stop using the company's products completely within two years. 70% of Dialog's sales in 2016 came from trade with the Californian tech giant, estimates show.

Netanyahu to AIPAC: 'US & Israel will stand shoulder to shoulder' together
Pence, who was accompanied by his wife Karen, stressed that "President Trump has made it clear America stands alongside Israel". But he repeated his demand that the Palestinians recognise Israel as a Jewish state, something they have refused to do.

Custom chip design isn't a new thing for Apple.

The company has already issued a statement noting that it "knows of no business reason" for the movement of its share price.

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.

Among other companies, besides Imagination and Dialog, which derive half their revenues from Apple are Hon Hai and Cirrus Logic.

The iPhone's endurance could improve greatly with Apple-made power chips. Many of these companies are nearly unheard of by the general public and just starting to get noticed by Wall Street. "We acknowledge Apple's continued hiring of engineers, in power management and elsewhere, but an additional 80 engineers hired in this area pales in comparison to the over 1,300 engineers Dialog employed at the end of a year ago".

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