Dialog attempts to reassure on Apple business as share price falls further

Shares of Apple supplier crater after admitting tech giant may soon design own chips

Dialog Semiconductor is finding out what happens when you put most of your eggs (or apples, perhaps) in one basket. Dialog intends to continue to closely support Apple in developing and supplying sophisticated next generation power management and mixed signal technology for use in Apple's products.

The statement added that Dialog didn't expect to lose its Apple power chip business in 2018.

The company has previously tried to play down those concerns.

Dialog Semiconductor acknowledged for the first time on Monday that Apple could develop its own battery-saving chips used in iPhones, sending Dialog's shares down another 24 percent.

"Our position remains that we have seen no material change to our ongoing relationship with Apple Inc", Chief Executive Jalal Bagherli told investors on a conference call.

A lot is at stake. The company is believed to derive the majority of its income from Apple.

"This is a major disaster", said Tim Wunderlich, analyst at Hauck & Aufhauser.

The company's share price has been under pressure since reports emerged that Apple is working on its own power management chip, which could lead to less business for its usual supplier Dialog.

Tsinghua Unigroup, which bought Spreadtrum in 2013, has said it wants to float the company next year.

Apple did not respond to a request for comment.

The technology giant based in the USA said this past April it was planning to replace its supplier of graphics chips Imagination Technologies sending that stock down 70% in one session.

Imagination has since been sold to China-backed Canyon Bridge Capital Partners for £550 million ($740 million), well below the £2 billion ($2.7 billion) it was worth at its peak in 2012.

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