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Power Player Dialog Aims at 20% CAGR

20 February 2014

While the overall global semiconductor market is expected to show single-digit percentage annual growth, Dialog Semiconductor plc, one of Europe's leading fabless chip companies, has demonstrated the benefit of working in the mixed-signal, analog, RF and power management sectors.

Dialog (Kirchheim-unter-Teck, Germany), which supports the mobile sector with power management, wireless and audio ICs, achieved an annual sales growth of 17 percent and CEO Jalal Bagherli told analysts on a conference call that he hoped Dialog would achieve a 20 percent compound annual growth rate over the next three or four years.

When challenged over these ambitions Bagherli said: "It is our ambition. Just because a customer [sales] is flat doesn't mean we will be. Bagherli pointed out that Dialog has been able to increase its average selling price for chips as the functionality of its power management ICs and other chips, has increased with mobile phone complexity.

In addition to the success achieved in mobile PMICs, Dialog acquired iWatt Inc. in 2013, which has provided the company with technology for LED for lighting driver ICs and quick-charge and wireless charging. Bagherli also pointed out that Dialog expects to benefit as these sales opportunities expand rapidly over the next few years.

Demand for chips to go into smartphones and tablet computers was behind a late surge in sales at mixed-signal chip company Dialog. As a result Dialog reported a net income of $46.6 million on sales revenue $351.8 million in the fourth quarter of 2013. Compared with the same quarter a year before the net profit was up 54 percent and sales were up 31 percent. On the back of this strong fourth quarter – Dialog raised guidance twice during the quarter – the company was able to report annual revenues of $903 million representing a 17 percent growth compared with 2012.

At the end of the year Dialog had a cash balance of $186 million suggesting further small tuck-in acquisitions may be possible, although the company could raise funds for larger M&A activity, if it was deemed necessary.

"I am very pleased with the exceptional business performance we have achieved in Q4 and over the full year, delivering uninterrupted annual revenue growth for the seventh consecutive year, increasing profitability and outstanding cash generation," said Bagherli, in a statement. " During the year, we grew significantly faster than the industry average while investing in new product development and innovation. We have laid the foundations for a more diversified business and we are well placed to build on the market opportunity open to us in 2014 and beyond."

Dialog expects sales in 1Q14 to be much lower then in 4Q13, following a conventional seasonal pattern at between $200 million and $215 million.

Related links and articles:

News articles:

Dialog Gets Behind Qualcomm's Quick Charge

Dialog Raises Revenue Forecast on Mobile Strength

Dialog Semi to Buy iWatt to Expand in Mobile and Solid State Lighting

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