Apple supplier Dialog Semi guidance tops expectations after Q2 beat confirmed

Dialog Semiconductor offered upbeat guidance for revenues and profit after confirming a Q2 earnings beat thanks to its deal to transfer people and power-management chip patents to Apple.

Douglas Busvine for Reuters:

The Anglo-German chip designer struck a $600 million agreement with Apple last year to transfer people and patents involved in the design of the main power-management chips used at the heart of the iPhone. That deal delivered its first windfall in the April-June quarter, as revenue of $482 million was buoyed by $146 million in one-off licence fees from Apple while underlying gross margins widened to 49.7%.

At the same time, Dialog’s remaining business with Apple – which spans a broader range of products and technology – trebled in size, giving management the confidence to set guidance above market expectations. “We’re looking forward to an even better third quarter,” CEO Jalal Bagherli told Reuters in an interview, saying design wins from Apple to develop new mixed-signal integrated circuits would generate revenues over the next three years.

The new Apple business spanned a broader range of uses, said Bagherli, including display and the audio signal chain. These were finding use in a wider range of products such as the Apple Watch, Airpods and Mac computer range.

MacDailyNews Take: Bagherli also hinted at the looming iPhone super cycle as he said of 5G phones: “2020 is the year it starts to take off – and 2021 will be really high volume.”

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