Apple buys team from UK chipmaker Dialog in $600m deal

Apple has used Dialog’s chips to manage battery life since the first generation iPhone was launched a decade ago

The deal includes $300m to acquire 300 of Dialog’s engineers working in Britain, Germany and Italy (Getty)

Apple is buying part of UK-based chip supplier Dialog in a $600m (£454m) deal, the iPhone maker announced on Thursday.

The deal includes $300m to acquire 300 of Dialog’s engineers working in Britain, Germany and Italy, with the rest of the money paying for supplying chips over the next three years.

Apple has used Dialog’s chips to manage battery life since the first generation iPhone was launched a decade ago.

Dialog’s shares soared 27 per cent on Thursday after the announcement that it had secured its relationship with Apple, its main customer.

The Anglo-German company’s shares have recovered much of the ground they lost late last year when it admitted Apple could make its own chips.

Other chip designers in Europe have struggled to manage their relationship with Apple due to its sheer scale. Britain’s Imagination Technologies ended up being sold to a Chinese-backed investment fund last year after losing Apple as a client.

Dialog said it would continue to deliver chips to other customers, focusing on the automotive and internet-of-things markets, among others.

“This transaction reaffirms our long-standing relationship with Apple, and demonstrates the value of the strong business and technologies we have built at Dialog,” Dialog CEO Jalal Bagherli said in a statement.

Apple will acquire around 16 per cent of Dialog’s total workforce and will will also colocate employees at some of Dialog’s offices in Europe.

Almost half of Dialog’s employees across its two Swindon buildings will move to Apple. He said one of these buildings would be “entirely taken over by Apple employees”, but that the impact on the workforce was small as employees for both companies already work closely together.

The deal represents an expansion of Apple’s chip design operations, which kicked into high gear in 2010 when the company released its first custom processor for the iPad and iPhone.

Additional reporting by agencies