SAN FRANCISCO—Executives from Analog Devices Inc. (ADI) said Tuesday (Nov. 27) that the company's manufacturing capacity utilization rate has fallen to its lowest level since 2009 as cautious customers continue to reduce inventories amid macroeconomic sluggishness.
Jerald Fishman, ADI's CEO, told analysts following the company's fiscal fourth quarter financial report that the company began cutting capacity utilization during the quarter and plans to continue doing so in the current quarter. The company plans to cut capacity utilization to just over 50 percent, down from 67 percent last quarter, in order to avoid inventory buildup, Fishman said.
"While operating our factories well below capacity will certainly reduce our gross margins in the short term, it will provide significant upside leverage—as it has in the past—when revenue growth resumes," Fishman said.
ADI reported mixed results for the quarter—which closed Nov. 3—with sales largely below analysts' expectations. The company also provided a sales target for the current quarter that came up short of analysts' forecasts.
CJ Muse, an analyst with Barclays Capital Inc., said ADI's move to cut capacity utilization to stave off inventory build would position the company for a snapback in gross margins once demand recovers. ADI's gross margins fell to 62 percent in the fiscal fourth quarter, lower than consensus analysts' expectations of about 65 percent.
"We have been highlighting that while downstream tech inventories remain lean, semis inventory levels in general remain at more elevated levels," Muse said, in a note to clients circulated Wednesday.
Barclays maintains a rating of "equal rate" (equivalent to "hold") and a price target of $40 on ADI's stock. ADI's stock traded at just over $40 in afternoon trading Wednesday, down slightly from Tuesday's closing price.
Circuits can often be compartmentalized into stages with only one or two reactances in each stage. These circuits can be formidable to analyze for engineers unaccustomed to using much math, yet Basso’s book presents higher-level circuit theorems or methods that reduce their apparent complexity.
There is probably nowhere in the world more closely associated with the electronic components industry than California and, most notably, Silicon Valley. However, one concept that underpins the whole industry - that of electrical resistance - was discovered in Munich, Bavaria, which became part of the German Empire in 1871.