Apple to Design In-House iPhone Power Management Chips for Use in 2018: Report

After bringing its own A-series processors and making a dedicated SIP (System-in-Package) for the Apple Watch, Apple is now reportedly designing its own power management chips that are planned for iPhone models debuting in 2018. UK-based Dialog Semiconductor is currently manufacturing power chips for all iPhone models but a report by Japanese newspaper Nikkei claims that Apple is aiming to cut dependency on third-party suppliers by making an in-house power management chip design. Dialog stock dropped by 19 percent following the news.

A power management chip in an iPhone is responsible its charging function, battery management, and energy consumption. Although the present chips work well across the entire iPhone lineup, the Nikkei report highlights that in-house development will help Apple integrate hardware and software with better results. The Tim Cook-led army would also get a chance to differentiate the experience from competitors such as Huawei and Samsung by deploying its proprietary technology. Moreover, the future iPhone models may get appropriate advancement to deliver a longer battery life.

Citing industry sources, the report states that Apple has planned to "replace partially, or around of half" of the existing power management chips with its own semiconductor technology. The Cupertino giant reportedly accounted for 74 percent of Dialog's revenue in 2016. This suggests that the company would face a huge loss with the latest development.

In a recent interview with Reuters, Dialog CEO Jalal Bagherli refuted the previous rumours of Apple moving away from his company. "The relationship remains very strong, we have been invited for the design of a lot of new products, more than we can choose," the executive had told the news agency back in May.

However, an analyst report that emerged in April suggested that Apple had recruited some top Dialog engineers in Munich. That hiring is likely to contribute to the reported development of the custom power chips.

Reading, UK-headquartered Dialog isn't the only supplier with which Apple is reportedly abandoning its relation. Imagination Technologies, the company behind PowerVR series GPUs, also received a departure notification from the iPhone maker earlier this year. In an official statement in April, the British chip designer had said that Apple would no longer use its graphics processors in 15 months to two years' time.

The trend of developing custom chips for iPhone models was started back in 2008 when Apple acquired Silicon Valley-based PA Semi. That acquisition had resulted in the development of the Apple A4 chip that was debuted on the iPhone 4 in 2010.

If we believe Bloomberg Intelligence analyst Woo Jin Ho, the next generation of the iPhone would not come with Apple's custom chip and would still use Dialog power management chips. However, it is quite presumable that the iPhone lineup will eventually get a native solution to manage power.