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.
As an engineer, eventually you will have to insert an equation into your written work or presentation. This can be a struggle as equation editors are not always the friendliest. However, there is good news. The equation editor in Word has improved immensely (I am using version 2010 here). In this blog we look at how to insert an equation into a Word document. As a bonus, there is information on how to insert an equation into a web page with an html code generator website.
Wait a minute. Let’s see if I understand this. (Here I’m channeling you, the puzzled reader, after you’ve grabbed me in the coffee break of a Filter Wizard lecture morning). The frequency of the nth harmonic of a sinusoid is n times that of the fundamental. The nth harmonic distortion is defined as the ratio of the amplitude of the nth harmonic to the amplitude of the fundamental. So the 1st harmonic distortion is… the ratio of the amplitude of the fundamental to the amplitude of the fundamental and that’s… unity. I. Do. Not. Understand.
Single-ended signals are very common, but increasingly signal paths are being converted to differential signals as part of the signal chain. The benefits of differential signaling are particularly appealing with low supply voltage systems and for driving analog-to-digital converters (ADCs).
If you spend any time at all looking at alternative energy sources such as wind power and solar energy, you'll quickly discover one inconvenient truth: alternative energy production is both highly unpredictable and uncorrelated to energy demand.