“Shares in British-headquartered Dialog Semiconductor have plunged after an analyst downgrade that cited uncertainty over the future of its relationship with Apple,” The Associated Press reports.

“Shares in the firm were down 16.7 percent to 39.81 euros ($42.14) in afternoon trading Tuesday in Frankfurt, where Dialog Semiconductor is listed,” AP reports.

“The selling followed an analyst note from Bankhaus Lampe that downgraded Dialog to ‘sell,'” AP reports.It said there appeared to be ‘strong evidence’ that Apple is developing its own power management chip for the iPhone and ‘intends to replace the chip made by Dialog at least in part.'”

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“Apple accounted for more than 70 percent of Dialog’s 2016 sales, analysts estimate,” Eric Auchard and Harro Ten Wolde report for Reuters. “The German company says it is the world’s top maker of power management chips used in smartphones with roughly 20 percent of the market.”

“Bankhaus Lampe cited unnamed industry sources as saying that Apple was setting up power management design centers both in Munich and California and said Apple already had around 80 engineers working on a power management chip of its own,” Auchard and Ten Wolde report. “‘In our view, there is strong evidence that Apple is developing its own PMIC and intends to replace the chip made by Dialog at least in part,'” Bankhaus Lampe analyst Karsten Iltgen said, referring to power management chips.

“A source familiar with the matter confirmed that Apple was recruiting top Dialog engineers in Munich. ‘They are poaching like crazy,’ the person said,” Auchard and Ten Wolde report. “Other chip suppliers for the current iPhone 7 include, but are not limited to, Cirrus Logic, NXP, Qualcomm, Skyworks, STMicroelectronics, according to an analysis by TechInsights in September.”

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MacDailyNews Take: Investing in suppliers who are heavily dependent on Apple’s business is it’s own special thrill ride.