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Dialog Semiconductor in Acquisition Talks with Synaptics

Dialog Semiconductor is looking to diversify its business after one of its largest customers, Apple, slashed orders for the power management chips used in the iPhone. The company, which industry analysts estimate owes more than 50 percent of its business to Apple, announced on Tuesday that it was discussing an acquisition of Synaptics, which supplies chips for touch and voice interface applications.

In a statement, Dialog disclosed that it’s performing due diligence on Synaptics but cautioned that nothing has been decided yet. The company, which holds a market value of more than $1.4 billion, will have to overcome its recent troubles trying to diversify its product offerings. Two years ago, the company fumbled its acquisition of microcontroller supplier Atmel, which agreed to Microchip Technology’s rival bid of nearly $3.6 billion.

The discussions with San Jose, California-based Synaptics were first reported by Bloomberg.

Dialog, which has long been focused on power management chips for smartphones and other gadgets, is trying to reduce its dependence on Apple. When Apple reined in orders for Dialog’s chips this month, the company said it expected to lose five percent of its annual revenue, though it would still report growth in 2018. Dialog is currently looking into selling Apple on mixed-signal chips it acquired in its recent $330-million acquisition of Silego Technology.

Synaptics has also been expanding its business beyond display drivers and touch sensors used in smartphones. Last year, the company completed its $300-million acquisition of Conexant Systems, which supplies voice and audio processing solutions for smart speakers and a growing number of voice-controlled devices. Synaptics, now with a market value of $1.7 billion, used another $95 million to buy Marvell’s multimedia solutions business, which also targets smart home applications.

TAGS: Supply Chain
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