UK chipmaker buys California tech firm for $306m

German owned Apple supplier with headquarters in Reading, Dialog Semiconductor, has bought a California chipmaker in a deal worth up to $306m (£234m).

Apple's new A9 chip will be produced by Samsung Electronics' semiconductor factories. Image courtesy of Samsung Electronics
Silego makes chips which will push chipmaker Dialog further into IoT business. – image courtesy of Samsung Electronics

The chipmaker Dialog Semiconductor has announced yesterday (5 October) it will buy California’s fabless semiconductor company Silego Technology in a $276m cash deal with a further consideration of $30.4m.

Silego makes Configurable Mixed-signal ICs (CMIC) – that is, chips which can be customised – and will push Dialog further into the growing Internet of Things (IoT) business.

The chips are used in devices from GoPro, Fitbit and Samsung although Apple is also believed to be a major customer.

Reportedly, an analyst at Morgan Stanley said: “Apple appears to be a significant customer of Silego too (though less so than for Dialog at 75-80% of revenues), so there will not be much diversification away from Apple when this deal completes.”

Jalal Bagherli, Dialog chief executive, said, “What Silego has developed is truly unique – a mixed-signal platform which customers can configure to their design requirements on the fly, drastically reducing the time to bring their products to market.”

Silego chief executive John Teegan said: “Our proprietary and configurable approach has allowed Silego to establish leadership while creating a new market. By leveraging Dialog’s technology and capabilities, I am confident we can further drive adoption of CMICs.”

Dialog reported it will take on Silego’s more than 200 employees and the deal is expected to close by the end of the year.

Silego confirmed it forecasts $80m revenue for 2017 and double digit growth in 2018. That is expected to boost Dialog’s full-year margins for 2018 the company said.

Barclays and Hogan Lovells were financial and legal advisers respectively to Dialog on the deal.