Dialog Semiconductor Plc (DLGNF) , a key supplier of components for Apple Inc. , is likely to keep making chips for the flagship iPhone, Germany's Commerzbank AG (CRZBY) said Friday, easing concerns that the tech giant could move that function to a team within the company.

The bank told clients that it was "as close as we can possibly be to 100% certain that Dialog will remain sole supplier for the core PMIC for the iPhone 2018" and kept its target price of €58 in place while reiterating a "buy" rating on the stock. Dialog shares were marked 3.25% higher in Frankfurt trading and changing hands at €31.46 in the opening hours of trading.

Dialog shares fell the most in eight months Thursday after Japan's Nikkei business newspaper said Apple was preparing to design its own power chips as early as next year, following moves to bring the making of core processors, and facial recognition chips in-house at the group's Cupertino, Calif.-based headquarters.

The Anglo-German group's relationship with Apple, its biggest customer, is crucial and heavily-influenced its earnings guidance earlier this month when it raised full year profit forecast on strong demand for the iPhone X.

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Dialog, which also supplies chips for Samsung Electronics  (SSNLF) , reported third quarter revenue was up 5% year-on-year to $363 million, essentially at the mid-point of previous guidance, on strong demand for new smart phones and other electronic devices and underlying profit of $76.6 million.

Although the company did not name Apple, it said there was "continued momentum and design-in engagements for custom Power Management ICs (PMICs) at leading OEMs, for next generation smartphones, tablets, computing and wearable products." 

Dialog now expects fourth quarter revenue to be in the range of $415 million and $455 million, a 19% year-on-year growth at the mid-point, but below what the market wanted at $475 million. For the full year, revenue is expected to be $1.324 billion, an 11% increase on 2016, on "a robust order backlog" and expectation that demand for its new products will remain strong.

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