In mid-morning European trade, shares in the Anglo-German firm were more than 18 percent lower. The slump built on a similar fall in value last Thursday when a news report claimed Apple would be designing its own iPhone chips from as early as next year.
Dialog, which supplies chips for iPhones, iPads and watches, conceded in a statement Monday that Apple could be about to move its chip design in-house.
"Although Dialog expects to remain Apple's main supplier of power management integrated circuit (PMIC) designs, Dialog recognizes Apple has the resources and capability to internally design a PMIC and could potentially do so in the next few years," it said.
The statement added that Dialog didn't expect to lose its Apple power chip business in 2018.
But in comments reported by Reuters, Dialog's chief executive Dr. Jalal Bagherli said on a call to investors Monday that it would be some time before Apple's strategy for 2019 was understood.
Dialog Semiconductor recorded 2017 third-quarter revenue of $363 million, a record for the company.