Dialog Semiconductor plunges after analyst warns Apple may use fewer of its chips

Dialog Semiconductor shares fell by as much as 16% on Tuesday after an analyst warned that Apple may use fewer of the company’s chips in the iPhone.

Karsten Iltgen, an analyst at Bankhaus Lampe, said in a note that there is “strong evidence” Apple is working on its own power-management integrated circuits, according to Bloomberg. About 80 engineers at Apple are working on chips for use as soon as 2019, he said, citing unnamed industry sources. He downgraded the stock to “sell” from “hold.”

“The company knows of no business reason for this movement and confirms that it remains comfortable with its guidance for the first quarter and in its prospects for the year,” Dialog Semiconductor said in a statement noting its stock’s drop.

Last week Monday, UK tech company Imagination Technologies said Apple, its biggest customer, would no longer be using its graphics-processing chips. The company said Apple was working on a separate graphics design to control its products. Its shares plunged 70%.

NOW WATCH: Congress just voted to allow your internet provider to sell your online history and data — ┬áhere’s how to protect your privacy

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.