In a $300 million (£227 million) deal, Apple (NASDAQ: AAPL) is hiring 300 computer chip engineers from Dialog Semiconductor (ETR: DLG).
The deal will also include some of the company’s patents and facilities that are based in Reading. Apple plans to transfer a further $300 million as a pre-payment for products.
Dialog’s hardware technologies chief Johny Srouji said: “Dialog has deep expertise in chip development and we are thrilled to have this talented group of engineers who have long supported our products now working directly for Apple.”
Investors welcomed the deal that was announced on Thursday morning, sending Dialog shares up over 30% in morning trading.
Earlier this year, Dialog admitted that Apple had the “resources and capability” to design its own in-house chips. The tech giant has already ended partnerships including with UK company, Imagination Technologies, where Apple decided to create its own in-house graphics processing units (GPUs).
When last November there were rumours that Apple might also end its partnership with Dialog, shares in the UK supplier tumbled 20%.
Senior editor at the engineering-focused news site AnandTech, Ian Cutress, said Apple is known for enjoying control.
“In the industry this kind of move is known as being more vertically integrated. It’s something that’s already true of Samsung and its smartphones – for example it also makes its own displays,” he said.
“The benefits for Apple having full control at the component level should be lower overheads and therefore reduced costs. But a downside could be there’s less fallback if something goes wrong.”
The deal is expected to end the first half of 2019. Shares in Dialog are currently trading up 26.03% at 20,89 (1256GMT). Shares in Apple (NASDAQ: AAPL) are down 4.63% at 216,36.