High demand for chips and a multibillion-dollar market for Analog Devices
Semiconductor manufacturer Analog Devices Inc. (ADI) has improved its financial performance and retains the opportunity for further growth thanks to several large targeted markets, primarily automotive.
In the quarterly report published last week, Analog Devices showed a significant increase in revenue and profit. One of the reasons was acquiring the semiconductor manufacturer Maxim Integrated business.
For the quarter ended October 30, revenue increased by 53% year-on-year to $2.34 billion, earnings per share increased to $1.73. Positive dynamics to continue in the current quarter revenue of $2.6 billion and profit of $1.78 per share. In 2021, during a shortage of electronic components, Analog Devices doubled its capital expenditures to $344 million.
Made it possible to increase production capacity and realize the potential of increased demand. At the same time, the company plans to continue commissioning new production lines in the USA and Europe. Will make it possible to make deliveries for the increased portfolio of unrealized orders received this year.
Analog Devices operates in areas with significant growth potential: industrial automation and automotive manufacturing. The first direction provides about half of the company’s revenue and in the last quarter showed revenue growth of 45%. Moreover, there are no signs of slowing down in this segment yet, as industrial equipment requires more and more sensors and other electronics.
The market of electronics for cars can grow at an average annual rate of 17% until 2026 is a market’s record pace due to the transition to electric vehicles and the saturation of cars with intelligent electronics, such as driver assistance systems (ADAS). Currently, seven out of ten significant automakers use chips from Analog Devices, and the company’s revenue in this segment increased by 19% in the quarter.
