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.
When your home’s deep freezer, full of food, experiences an AC power failure while you are out for an extended time, its contents can thaw out. If the AC power is then restored before you return home, the contents can re-freeze and you may never know that your food is spoiled. This has given rise over the years to a number of freezer-alarm circuits and methods to detect thaw and re-freeze.
It seems like we just had LTE and LTE Advanced beginning deployment in base stations everywhere. In spite of that effort, there has been heavy discussion of early development ideas of the 5G next-gen architecture to meet the ever-growing demands of the cellular airwave capacity, speed and customer future needs.
If you have worked in the semiconductor industry for more than a few years I am sure you have heard senior leadership speak about the need for your integrated circuit designs to be first pass successes and not the typical two to three spins or more to reach the targeted performance. The question is this: Is first pass success feasible and should be expected? I do not want to stir up a hornets nest with my response but the answer to the question is that it depends. Depends on what you say? Well, the answer depends on several different interwoven complexities that can determine if first pass success is possible. I would like to explore some possible ways to answer this question. Furthermore, the complexity of this question increases when developing complex mixed signal IC’s.
Fortunately for circuit designers, a new tool is available that can simplify the process of identifying the ESD suppression device best suited to an application, which makes it far easier to incorporate circuit protection earlier in the board planning process. The Littelfuse iDesign™ Online Simulation and Product Selection Tool
. I received a very good reader question from my last blog post regarding the various parameters that are reported by the tool. Let’s take a look at an example and explore the parameters that are returned. In this example we will look at the AD9643-250.