Apple seems to be working on decreasing its reliance on 3rd party chip and component makers by creating its own in-house solutions. Yesterday, we reported about Apple’s plans to build its own power management chip by 2019 dropping Dialog from the supplier’s list. Now a new prediction by Credit Suisse analysts reads that the next company to lose Apple contract to supply component for mobile devices is going to be the display driver maker Synaptics.
The prediction comes short after Apple’s warning that the company plans to stop using GPUs made by Imagination Technologies within coming two years, which resulted in a sudden drop in the stock of the supplier. A similar stock price drop was seen with Dialog following a report suggesting that Apple also plans on dropping Dialog as its supplier for the power management chip.
Back in 2014, Apple was rumored to acquire Renesas, a display driver chip technology company, but Reuters reported that those talks failed. Later, the Renesas was acquired by Synaptics in a $475M buyout.
Synaptics provided 3D Touch technology for the iPhone 6s/Plus and just a month after that the company announced in 2015 that it would be making pressure-sensitive touchscreen controllers for Android smartphones as well. This may have been a pleasing development for Apple.
A note from Credit Suisse, as seen by Business Insider, attempts to predict that the current Apple suppliers are most at risk of losing their contracts as the fruit company is moving deep into in-house component manufacturing. The analyst also highlighted the fact that numerous former Renesas engineers have been hired by Apple
Synaptics (SYNA, Sector Weight) Risk: Medium to High. We see moderate to high risk of Apple looking to insource its display driver IC, given (1) as we previously noted, Apple has hired a significant number of former Renesas RSP engineers, and (2) we believe Apple has been developing its own internal OLED DDIC. We believe Samsung will use its own internal DDIC for the OLED iPhone and Synaptics for the next- generation LCD smartphones. Why would it make sense? By optimizing and using its internal solution, Apple could optimize power and performance with its internal graphics engine. Additionally, it would lessen its reliance on Samsung for OLED displays.
The analyst also talked about other Apple suppliers and their level of risks: Cirrus Logic (medium to low risk), RF Suppliers and Skyworks Solutions were considered at low risk of losing Apple business.
Apple’s aggressive move towards building in-house chips adds further weight the idea of an ARM-based Mac features Apple’s in-house CPUs.
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