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Dialog Semiconductor is said to be in deal talks with Synaptics

(Bloomberg) -- Dialog Semiconductor Plc is in discussions with touch-pad technology maker Synaptics Inc. about a potential deal with the U.S. company, according to people familiar with the matter.

Exploratory talks about a combination are ongoing and may not lead to an agreement, said the people, who asked not to be identified as the details aren’t public. Dialog has a market value of about 1.15 billion euros ($1.4 billion) while Synaptics is valued at $1.6 billion.

Synaptics shares rose as much as 15 percent to $49.13 Friday. Dialog’s German-traded shares closed down 4 percent at 15.07 euros apiece.

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Green light illuminates microchips on a 300mm silicon wafer at Infineon Technologies AG semiconductor manufacturing facility in Villach, Austria, on Thursday, Feb. 18, 2016. Infineon designs, manufactures and markets semiconductors for the automotive, industrial, communications, consumer and security electronics sectors. Photographer: Krisztian Bocsi/Bloomberg

Representatives for Dialog and San Jose, California-based Synaptics declined to comment.

Dialog is facing a challenging year for sales after its biggest customer, Apple Inc., cut orders for the company’s power-management chips used in the iPhone. The Reading, U.K.-based company warned that revenue will fall 5 percent in 2018 because of the smartphone giant’s move.

Synaptics would give Dialog an entryway into additional products like smartphone sensors, touch screens and touch pads that are sold to companies like Apple and Samsung Electronics Co., according to data compiled by Bloomberg.