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Dialog Semiconductor’s profits spiked by more than a fifth at the end of last year, ahead of a £4bn takeover by Japan’s Renesas Electronics. My colleague Hannah Boland reports:

Dialog said revenues were up 15pc at $439m (£314m) in the final three months of 2020, sending underlying profits 21pc higher at $110m.

The company, which designs chips used to manage smartphone power circuits, support bluetooth connections and illuminate displays, said it had experienced a surge in demand during the pandemic, as the shift to remote working meant more people were buying headphones, fitness trackers, digital watches, notebooks, and tablets.

Dialog had been among the semiconductor companies hurt by a production slowdown at the start of the pandemic, as factories in China were forced to reduce capacity, but said during the final three months its supply chain “has remained stable during the quarter, with most suppliers and our customers’ contract manufacturers continuing to operate at almost full capacity”.

The results come just weeks after Dialog Semiconductor revealed it had agreed to a  €4.9bn (£4.19bn) takeover by Tokyo-based semiconductor firm Renesas – the latest in a string of British technology firms to be snapped up by Asian rivals. Dialog said the deal remained subject to regulatory approvals in a number of jurisdictions, but was expected to close during the second half of the year.

Britain is currently putting in place a national security and investment bill, to help protect British companies from takeovers, and yesterday provided more clarity on which areas it would cover, including semiconductor research and design.

Hermann Hauser, the founder of Acorn whose technology was spun out to create semiconductor leader Arm, said Dialog’s takeover would be “a disaster for Europe”.

Dialog’s systems can deliver wireless connectivity at low power – something which is expected to feed into Renesas’s work on electric and driverless cars.

Mr Hauser said this was “one of the few growth markets Europe has great strength in and we should do everything to keep it in Europe”.

It comes amid an ongoing row over whether US giant Nvidia should be allowed to buy Cambridge-based Arm from SoftBank. Critics argue that it would put Arm’s status as the “Switzerland of chips” at risk.