March 4, 2020 / 6:46 AM / 4 months ago

Dialog Semi sees chip supply chain back to normal in second quarter

FILE PHOTO: Dialog Semiconductor's logo on a flag in Germering, near Munich, Germany, August 15, 2016. REUTERS/Michaela Rehle

BERLIN (Reuters) - Dialog Semiconductor (DLGS.DE) said on Wednesday it expected the chip supply chain and contract manufacturers to return to normal in the second quarter, after disruption caused by the coronavirus epidemic that first broke out in China.

The Anglo-German chip designer forecast 2020 percentage revenue growth in the mid-teens, excluding its legacy business supplying the main power management integrated circuit (PMIC) for older Apple (AAPL.O) iPhones, in line with earlier guidance.

Dialog reported fourth-quarter revenues at $381 million (297 million pounds), slightly above the mid-point of its guidance range and down 12% year on year, reflecting the transfer of its main PMIC business to Apple in a $600 million deal in late 2018.

Gross margins in the quarter were 50% - a record level and slightly above prior guidance, the company said in a statement.

First-quarter revenues are seen in the range of $220-$250 million, reflecting seasonal trends and the impact of the coronavirus outbreak on its customers, contract manufacturers and demand more broadly in China.

“For FY 2020, revenue excluding licensed main PMICs is expected to grow approximately mid teens percentage - in line with our long-term financial targets,” Dialog said.

“This assumes a return to normal for supply chain and contract manufacturers by Q2 2020. Based on this revenue in FY 2020 we anticipate underlying gross margin to continue on a gradual upward trend.”

Dialog, which recently announced it would buy California-based Adesto Technologies (IOTS.O) for $500 million in an agreed deal, also said it would launch a fresh round of share buybacks for up to 90 million euros.

The company’s shares are down 33% in the current year to date.

Reporting by Douglas Busvine; Editing by Thomas Seythal and Christopher Cushing

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