Sunday, June 24, 2018

Dialog Semiconductor On The Clock

A year ago, the debate around Dialog Semiconductor (OTCPK:DLGNF) was whether or not there was any substance to bearish rumors and predictions that Apple (AAPL) was working on its own power management integrated circuits (or PMICs) and would use them to replace Dialog’s chips in its iPhones and other products. With Apple having since done exactly that (although not completely), now the debate is how far the substitutions will go and what Dialog can do to preserve and rebuild its business absent contributions from Apple that have historically made up 70% or more of revenue (and high-margin revenue at that).

Both Dialog and Synaptics (SYNA) have confirmed that they’re discussing a merger; while Synaptics has been a frequent-flier on sell-side “likely to be bought” charts, and there would be potential synergies in such a deal, Dialog’s iffy history in M&A doesn’t lend a lot of confidence. The good news, such as it is, though, is that the market is already pricing in a very dire outlook for this beaten-up chip company.

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Dialog Semiconductor On The Clock

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