Analog Devices, Inc. (NYSE: ADI), known as ADI, is an American multinational semiconductor company specializing in data conversion and signal conditioning technology, headquartered in Norwood, Massachusetts.[1] In 2010, Analog Devices led the worldwide data converter market with a 47.5% share, according to analyst firm databeans.[2]
The company is a leading manufacturer of analog, mixed-signal and digital signal processing (DSP) integrated circuits (ICs) used in electronic equipment.[3][4] These technologies are used to convert, condition and process real-world phenomena, such as light, sound, temperature, motion, and pressure into electrical signals.[5]
Analog Devices has approximately 60,000 customers worldwide. The company serves customers in the following industries: communications, computer, industrial, instrumentation, military/aerospace, automotive, and high-performance consumer electronics applications
Analog Devices, Inc. (Analog Devices) designs, manufactures and markets analog, mixed-signal and digital signal processing integrated circuits (ICs) used in all types of electronic equipment. Its signal processing products translate real-world phenomena, such as temperature, pressure, sound, light, speed and motion into electrical signals to be used in a range of electronic devices. The Company’s products are included in different electronic equipment, including industrial process controls, medical imaging equipment, factory automation systems, portable electronic devices, instrumentation, cellular basestations, energy management systems, wireless communications equipment, defense electronics, digital cameras, automobiles and digital televisions. As of October 31, 2009, Analog Devices had approximately 60,000 customers worldwide.
Analog Products
The Company’s analog signal processing ICs are primarily high-performance devices. Its product portfolio includes several thousand analog ICs. Its analog ICs have long product life cycles. Its analog IC customers include both original equipment manufacturers (OEMs) and customers who build electronic subsystems for integration into larger systems. The Company derives the majority of its analog signal processing IC product revenue from sales of data converters and amplifiers. With the portfolio of analog-to-digital converters (ADCs) and digital-to-analog converters (DACs), its converter products combine sampling rates and accuracy with the low noise, power, price and small package size required by industrial, medical, automotive, consumer and communications electronics. It is also a supplier of high-performance amplifiers. It provides high-speed, precision, radio frequency (RF), broadband, instrumentation and other amplifiers. It also offers a portfolio of comparators that are used in a variety of applications. Its analog product line also includes a portfolio of RF ICs covering the entire RF signal chain from high-performance RF function blocks to highly integrated broadband and short-range single chip transceiver solutions.
Digital Signal Processing Products
Digital Signal Processors (DSPs) are optimized for high-speed numeric calculations, which are used for instantaneous, or real-time, processing of digital data generated from analog to digital signal conversion. Its DSP products are designed to be fully programmable and to execute specialized software programs, or algorithms, associated with processing digitized real-time, real-world data. Programmable DSPs provide the flexibility to modify the device’s function using software. Its general-purpose DSP IC customers write their own algorithms using software development tools that it provides and software development tools they obtain from third-party suppliers. Its DSPs are designed in families of products that share a common architecture and therefore can execute the same software. It supports these products with easy-to-use development tools, which are designed to reduce its customers’ product development costs and time-to-market.
The Company competes with Broadcom Corporation, Microchip Technology, Inc., Cirrus Logic, Inc., National Semiconductor Corporation, Freescale Semiconductor, Inc., NXP Semiconductors, Infineon Technologies, ST Microelectronics, Intersil Corporation, Silicon Laboratories, Inc., Linear Technology Corporation, Texas Instruments, Inc. and Maxim Integrated Products, Inc.
Beginning in the late 1960s, Analog Devices established sales subsidiaries in Germany and France, and, in 1976, the company moved more substantially into the European market. Accepting 40 percent financial backing from the Irish government, Analog built its first manufacturing plant abroad, in Limerick, Ireland. The new facility made metal oxide semiconductor integrated circuits, which were first developed by Analog engineers in Santa Clara, California, and had become the company's single largest capital investment. The product line was quickly expanded to include multiple chip integrated circuits.
Financing new start-up ventures and building new facilities proved a strain on the company's resources, and, in 1977, Analog sought investment capital. That year, Standard Oil of Indiana bought a 15 percent interest in Analog Devices in exchange for nearly $5 million in cash. Paying 50 percent over the market rate for Analog's stock, Standard Oil regarded the deal as an investment in Analog's growing semiconductor division. Analog doubled the size of its semiconductor plant in Wilmington, Massachusetts, and added a second facility to its new factory in Ireland. Then, in 1980, Standard Oil and Analog entered into a second agreement, establishing a joint venture called Analog Devices Enterprises. The five-year plan called for the oil company to capitalize start-up companies that Analog chose, as a means to acquiring new technologies. Between 1980 and 1983, Analog invested in 11 different high-tech companies, bringing Analog new products in such areas as digital signal processing circuits, image processing systems, and telecommunications instruments.
By 1982, Analog Devices, Inc. had sales of $156 million, shipping over 200 products to over 15,000 customers in the United States, Europe, and Japan. The company's product line was diverse, and though it served large companies, including Hewlett-Packard and Digital Equipment Corp., no single company accounted for more than two percent of sales. Analog Devices' products were used by wineries, aluminum smelting plants, medical diagnostic labs, and a growing variety of industries that used computers for inspection or control. Although sales at times were somewhat impeded by the effect of the strong dollar on the European market and by industry-wide slowdowns, Analog Devices' performance in the first half of the 1980s was generally strong. The company was at the forefront of several high-tech areas and became a recognized leader in converters that could continuously change signals from analog to digital and back. The company also pioneered a highly regarded computer-based system called MACSYM that measured and controlled physical processes. Analog expanded its manufacturing capacity abroad in the early 1980s, building assembly plants in Japan and the Philippines.
Stata had taken his company through a series of five-year plans, carefully projecting growth and moving into strategic areas of new technology, and, in 1982, he predicted that Analog Devices would be a billion-dollar company within eight years. However, by the mid-1980s, profits at Analog began to decline. The joint venture company Analog Devices Enterprises was terminated in September 1985, and, the following year, Standard Oil of Indiana (which had become Amoco Corp.) sold its stock in Analog in order to concentrate on its core oil business. Moreover, military budget cutbacks led to reduced sales of established product lines.
Forced to spend a substantial share of its resources on developing new technologies, which did not immediately translate into new products, Analog Devices saw its stock price decline in the late 1980s. By 1990, the share price stood where it had ten years earlier, and the company posted its first loss. The company had not reached its $1 billion goal--sales were about $485 million in 1990--and it was too large to compete with the smaller high-tech firms that were overtaking niche markets.
Plans were made to turn the company around. In 1990, the company bought Precision Monolithics, Inc., a specialty circuit manufacturer, giving Analog new manufacturing technology and significantly expanding sales. Stata also undertook several organizational changes in order to streamline the company, combining several divisions into a single Industrial Electronics Division. Industrial automation, automatic test equipment, motion controls, and industrial controls, all of which were previously developed in facilities across the United States and the United Kingdom, came under one roof at corporate headquarters in Norwood, Massachusetts. European operations were also combined under a single European headquarters in Germany. In late 1990, the company cut about 600 jobs, bringing the workforce down by more than ten percent.
Perhaps the most significant shift in the company's direction involved a new product that was slow to reach the market. Since the late 1980s, the company spent more than one-third of its research and development funds on a new technology: digital signal processing--an exciting process that allowed a single chip to perform functions that previously required a circuit board. With a variety of applications in markets that were new to Analog, the chips could be used to process voice signals into digital signals for use in telephone technology and in personal computing. Analog also entered an alliance with Hewlett-Packard in 1992 to develop mixed-signal semiconductors, which could combine analog and digital processing on a single chip.
The company poured money into research, and, by late 1991, it reported promising results. Its mixed-signal technology had allowed Analog to build a minute sensor that was used to trigger an automobile airbag in case of a collision. While the standard system used multiple sensors and extensive wiring, with an installation cost of $400 to $600, Analog's single sensor sold for only $5, bringing the total cost of an airbag system to around $100. Perfected in 1991, the sensor was first deployed in 1994 Saab automobiles, and an American car manufacturer was expected to follow in 1995. Analog had not made products for the automotive market before, but its first effort seemed extremely promising, and the company soon brought out other sensors and converters that could be used in a variety of consumer products. Analog introduced a low-cost, accurate, and stable temperature controller in 1993 that could be used in residential thermostats. During this time, Sony Corporation became an Analog customer, using a new high-speed analog to digital converter in its digital camcorder.
In 1992, Analog's digital signal processing chips debuted in the personal computing market in Asia, and by the following year many major personal computer and component manufacturers, including Compaq and Microsoft, signed deals to use the new technology. The chips could be used to manipulate real-world sounds and images, making them important to many new computer software applications. Moreover, the chips could be programmed to enable a computer to read material back to the user, or to allow people to give instructions to their computers over the telephone. Texas Instruments, AT&T, and Motorola also sold digital signal processing technology--representing larger sales than Analog's 1992 figure of $60 million--but only Analog priced its chips low enough to appeal to the personal computing industry, and the company expected sales to boom in the coming years. Analog also had a strong market presence in consumer audio and telecommunications, as its digital signal processing chips could be used in compact disc players and cellular phone handsets. With the success of its newest wave of products, Analog Devices' sales swelled, its stock recovered from its early 1990s low, and revenues from digital signal processing were expected to more than double by the end of the decade. After losing some its earlier customers, the company skillfully used its resources to develop new products for growing markets, and by the mid-1990s, Analog Devices seemed clearly on the rise again.
Principal Subsidiaries: Analog Devices Limited (United Kingdom); Analog Devices, GmbH (Germany); Analog Devices S.A. (France); Analog Devices K.K. (Japan); Analog Devices APS (Denmark); Analog Devices S.A. (Switzerland); Analog Devices Nederland, B.V. (Netherlands); Analog Devices International, Inc.; Analog Devices Israel, Ltd.; Analog Devices A.B. (Sweden); Analog Devices SRL (Italy); Analog Devices HDLSGESMBH M.B.H. (Austria); Analog Devices Korea, Ltd.; Analog Devices, B.V. (Netherlands); Analog Devices Finance N.V. (Netherlands Antilles); Memory Devices Finance Bermuda, Ltd.; Analog Devices Holdings, B.V. (Netherlands); Analog Devices Research & Development Ltd. (Ireland); Analog Devices Inc. (Philippines); Analog Devices Marketing Limited (Great Britain); Analog Devices Foreign Sales Corporation, B.V. (Netherlands); Analog Devices Domestic International Sales Corporation; Memory Devices, Limited (Great Britain); Analog Devices Asian Sales, Inc.; Analog Devices Taiwan, Ltd.
OVERALL
Beta: 1.04
Market Cap (Mil.): $12,146.21
Shares Outstanding (Mil.): 299.61
Annual Dividend: 0.88
Yield (%): 2.17
FINANCIALS
ADI Industry Sector
P/E (TTM): 15.42 6.33 18.54
EPS (TTM): 128.28 -- --
ROI: 22.31 3.62 15.41
ROE: 26.34 3.89 16.87
Statistics:
Public Company
Incorporated: 1965
Employees: 5,400
Sales: $666 million
Stock Exchanges: New York
SICs: 3674 Semiconductors & Related Devices
Name Age Since Current Position
Stata, Ray 76 1996 Chairman of the Board
Fishman, Jerald 65 1996 President, Chief Executive Officer, Director
Zinsner, David 41 2009 Chief Financial Officer, Vice President - Finance
Brennan, Seamus 59 2008 Vice President, Chief Accounting Officer, Corporate Controller
Seif, Margaret 49 2006 Vice President, General Counsel, Secretary
Matson, William 51 2006 Vice President - Human Resources
Marshall, Robert 56 1994 Vice President - Worldwide Manufacturing
McAdam, Robert 59 2009 Vice President - Core Products and Technologies Group
Roche, Vincent 50 2009 Vice President - Strategic Market Segments Group
Fuller, Samuel 64 2006 Vice President - Research & Development, Chief Technology Officer
Saviers, F. Grant 67 1997 Independent Director
Doyle, John 79 1987 Independent Director
Champy, James 68 2003 Independent Director
Sicchitano, Kenton 66 2003 Independent Director
Hodgson, John 67 2005 Independent Director
Severino, Paul 64 2005 Independent Director
Istel, Yves-Andre 75 2007 Independent Director
Novich, Neil 56 2008 Independent Director
Address:
One Technology Way
P.O. Box 9106
Norwood, Massachusetts 02062-9106
U.S.A.
The company is a leading manufacturer of analog, mixed-signal and digital signal processing (DSP) integrated circuits (ICs) used in electronic equipment.[3][4] These technologies are used to convert, condition and process real-world phenomena, such as light, sound, temperature, motion, and pressure into electrical signals.[5]
Analog Devices has approximately 60,000 customers worldwide. The company serves customers in the following industries: communications, computer, industrial, instrumentation, military/aerospace, automotive, and high-performance consumer electronics applications
Analog Devices, Inc. (Analog Devices) designs, manufactures and markets analog, mixed-signal and digital signal processing integrated circuits (ICs) used in all types of electronic equipment. Its signal processing products translate real-world phenomena, such as temperature, pressure, sound, light, speed and motion into electrical signals to be used in a range of electronic devices. The Company’s products are included in different electronic equipment, including industrial process controls, medical imaging equipment, factory automation systems, portable electronic devices, instrumentation, cellular basestations, energy management systems, wireless communications equipment, defense electronics, digital cameras, automobiles and digital televisions. As of October 31, 2009, Analog Devices had approximately 60,000 customers worldwide.
Analog Products
The Company’s analog signal processing ICs are primarily high-performance devices. Its product portfolio includes several thousand analog ICs. Its analog ICs have long product life cycles. Its analog IC customers include both original equipment manufacturers (OEMs) and customers who build electronic subsystems for integration into larger systems. The Company derives the majority of its analog signal processing IC product revenue from sales of data converters and amplifiers. With the portfolio of analog-to-digital converters (ADCs) and digital-to-analog converters (DACs), its converter products combine sampling rates and accuracy with the low noise, power, price and small package size required by industrial, medical, automotive, consumer and communications electronics. It is also a supplier of high-performance amplifiers. It provides high-speed, precision, radio frequency (RF), broadband, instrumentation and other amplifiers. It also offers a portfolio of comparators that are used in a variety of applications. Its analog product line also includes a portfolio of RF ICs covering the entire RF signal chain from high-performance RF function blocks to highly integrated broadband and short-range single chip transceiver solutions.
Digital Signal Processing Products
Digital Signal Processors (DSPs) are optimized for high-speed numeric calculations, which are used for instantaneous, or real-time, processing of digital data generated from analog to digital signal conversion. Its DSP products are designed to be fully programmable and to execute specialized software programs, or algorithms, associated with processing digitized real-time, real-world data. Programmable DSPs provide the flexibility to modify the device’s function using software. Its general-purpose DSP IC customers write their own algorithms using software development tools that it provides and software development tools they obtain from third-party suppliers. Its DSPs are designed in families of products that share a common architecture and therefore can execute the same software. It supports these products with easy-to-use development tools, which are designed to reduce its customers’ product development costs and time-to-market.
The Company competes with Broadcom Corporation, Microchip Technology, Inc., Cirrus Logic, Inc., National Semiconductor Corporation, Freescale Semiconductor, Inc., NXP Semiconductors, Infineon Technologies, ST Microelectronics, Intersil Corporation, Silicon Laboratories, Inc., Linear Technology Corporation, Texas Instruments, Inc. and Maxim Integrated Products, Inc.
Beginning in the late 1960s, Analog Devices established sales subsidiaries in Germany and France, and, in 1976, the company moved more substantially into the European market. Accepting 40 percent financial backing from the Irish government, Analog built its first manufacturing plant abroad, in Limerick, Ireland. The new facility made metal oxide semiconductor integrated circuits, which were first developed by Analog engineers in Santa Clara, California, and had become the company's single largest capital investment. The product line was quickly expanded to include multiple chip integrated circuits.
Financing new start-up ventures and building new facilities proved a strain on the company's resources, and, in 1977, Analog sought investment capital. That year, Standard Oil of Indiana bought a 15 percent interest in Analog Devices in exchange for nearly $5 million in cash. Paying 50 percent over the market rate for Analog's stock, Standard Oil regarded the deal as an investment in Analog's growing semiconductor division. Analog doubled the size of its semiconductor plant in Wilmington, Massachusetts, and added a second facility to its new factory in Ireland. Then, in 1980, Standard Oil and Analog entered into a second agreement, establishing a joint venture called Analog Devices Enterprises. The five-year plan called for the oil company to capitalize start-up companies that Analog chose, as a means to acquiring new technologies. Between 1980 and 1983, Analog invested in 11 different high-tech companies, bringing Analog new products in such areas as digital signal processing circuits, image processing systems, and telecommunications instruments.
By 1982, Analog Devices, Inc. had sales of $156 million, shipping over 200 products to over 15,000 customers in the United States, Europe, and Japan. The company's product line was diverse, and though it served large companies, including Hewlett-Packard and Digital Equipment Corp., no single company accounted for more than two percent of sales. Analog Devices' products were used by wineries, aluminum smelting plants, medical diagnostic labs, and a growing variety of industries that used computers for inspection or control. Although sales at times were somewhat impeded by the effect of the strong dollar on the European market and by industry-wide slowdowns, Analog Devices' performance in the first half of the 1980s was generally strong. The company was at the forefront of several high-tech areas and became a recognized leader in converters that could continuously change signals from analog to digital and back. The company also pioneered a highly regarded computer-based system called MACSYM that measured and controlled physical processes. Analog expanded its manufacturing capacity abroad in the early 1980s, building assembly plants in Japan and the Philippines.
Stata had taken his company through a series of five-year plans, carefully projecting growth and moving into strategic areas of new technology, and, in 1982, he predicted that Analog Devices would be a billion-dollar company within eight years. However, by the mid-1980s, profits at Analog began to decline. The joint venture company Analog Devices Enterprises was terminated in September 1985, and, the following year, Standard Oil of Indiana (which had become Amoco Corp.) sold its stock in Analog in order to concentrate on its core oil business. Moreover, military budget cutbacks led to reduced sales of established product lines.
Forced to spend a substantial share of its resources on developing new technologies, which did not immediately translate into new products, Analog Devices saw its stock price decline in the late 1980s. By 1990, the share price stood where it had ten years earlier, and the company posted its first loss. The company had not reached its $1 billion goal--sales were about $485 million in 1990--and it was too large to compete with the smaller high-tech firms that were overtaking niche markets.
Plans were made to turn the company around. In 1990, the company bought Precision Monolithics, Inc., a specialty circuit manufacturer, giving Analog new manufacturing technology and significantly expanding sales. Stata also undertook several organizational changes in order to streamline the company, combining several divisions into a single Industrial Electronics Division. Industrial automation, automatic test equipment, motion controls, and industrial controls, all of which were previously developed in facilities across the United States and the United Kingdom, came under one roof at corporate headquarters in Norwood, Massachusetts. European operations were also combined under a single European headquarters in Germany. In late 1990, the company cut about 600 jobs, bringing the workforce down by more than ten percent.
Perhaps the most significant shift in the company's direction involved a new product that was slow to reach the market. Since the late 1980s, the company spent more than one-third of its research and development funds on a new technology: digital signal processing--an exciting process that allowed a single chip to perform functions that previously required a circuit board. With a variety of applications in markets that were new to Analog, the chips could be used to process voice signals into digital signals for use in telephone technology and in personal computing. Analog also entered an alliance with Hewlett-Packard in 1992 to develop mixed-signal semiconductors, which could combine analog and digital processing on a single chip.
The company poured money into research, and, by late 1991, it reported promising results. Its mixed-signal technology had allowed Analog to build a minute sensor that was used to trigger an automobile airbag in case of a collision. While the standard system used multiple sensors and extensive wiring, with an installation cost of $400 to $600, Analog's single sensor sold for only $5, bringing the total cost of an airbag system to around $100. Perfected in 1991, the sensor was first deployed in 1994 Saab automobiles, and an American car manufacturer was expected to follow in 1995. Analog had not made products for the automotive market before, but its first effort seemed extremely promising, and the company soon brought out other sensors and converters that could be used in a variety of consumer products. Analog introduced a low-cost, accurate, and stable temperature controller in 1993 that could be used in residential thermostats. During this time, Sony Corporation became an Analog customer, using a new high-speed analog to digital converter in its digital camcorder.
In 1992, Analog's digital signal processing chips debuted in the personal computing market in Asia, and by the following year many major personal computer and component manufacturers, including Compaq and Microsoft, signed deals to use the new technology. The chips could be used to manipulate real-world sounds and images, making them important to many new computer software applications. Moreover, the chips could be programmed to enable a computer to read material back to the user, or to allow people to give instructions to their computers over the telephone. Texas Instruments, AT&T, and Motorola also sold digital signal processing technology--representing larger sales than Analog's 1992 figure of $60 million--but only Analog priced its chips low enough to appeal to the personal computing industry, and the company expected sales to boom in the coming years. Analog also had a strong market presence in consumer audio and telecommunications, as its digital signal processing chips could be used in compact disc players and cellular phone handsets. With the success of its newest wave of products, Analog Devices' sales swelled, its stock recovered from its early 1990s low, and revenues from digital signal processing were expected to more than double by the end of the decade. After losing some its earlier customers, the company skillfully used its resources to develop new products for growing markets, and by the mid-1990s, Analog Devices seemed clearly on the rise again.
Principal Subsidiaries: Analog Devices Limited (United Kingdom); Analog Devices, GmbH (Germany); Analog Devices S.A. (France); Analog Devices K.K. (Japan); Analog Devices APS (Denmark); Analog Devices S.A. (Switzerland); Analog Devices Nederland, B.V. (Netherlands); Analog Devices International, Inc.; Analog Devices Israel, Ltd.; Analog Devices A.B. (Sweden); Analog Devices SRL (Italy); Analog Devices HDLSGESMBH M.B.H. (Austria); Analog Devices Korea, Ltd.; Analog Devices, B.V. (Netherlands); Analog Devices Finance N.V. (Netherlands Antilles); Memory Devices Finance Bermuda, Ltd.; Analog Devices Holdings, B.V. (Netherlands); Analog Devices Research & Development Ltd. (Ireland); Analog Devices Inc. (Philippines); Analog Devices Marketing Limited (Great Britain); Analog Devices Foreign Sales Corporation, B.V. (Netherlands); Analog Devices Domestic International Sales Corporation; Memory Devices, Limited (Great Britain); Analog Devices Asian Sales, Inc.; Analog Devices Taiwan, Ltd.
OVERALL
Beta: 1.04
Market Cap (Mil.): $12,146.21
Shares Outstanding (Mil.): 299.61
Annual Dividend: 0.88
Yield (%): 2.17
FINANCIALS
ADI Industry Sector
P/E (TTM): 15.42 6.33 18.54
EPS (TTM): 128.28 -- --
ROI: 22.31 3.62 15.41
ROE: 26.34 3.89 16.87
Statistics:
Public Company
Incorporated: 1965
Employees: 5,400
Sales: $666 million
Stock Exchanges: New York
SICs: 3674 Semiconductors & Related Devices
Name Age Since Current Position
Stata, Ray 76 1996 Chairman of the Board
Fishman, Jerald 65 1996 President, Chief Executive Officer, Director
Zinsner, David 41 2009 Chief Financial Officer, Vice President - Finance
Brennan, Seamus 59 2008 Vice President, Chief Accounting Officer, Corporate Controller
Seif, Margaret 49 2006 Vice President, General Counsel, Secretary
Matson, William 51 2006 Vice President - Human Resources
Marshall, Robert 56 1994 Vice President - Worldwide Manufacturing
McAdam, Robert 59 2009 Vice President - Core Products and Technologies Group
Roche, Vincent 50 2009 Vice President - Strategic Market Segments Group
Fuller, Samuel 64 2006 Vice President - Research & Development, Chief Technology Officer
Saviers, F. Grant 67 1997 Independent Director
Doyle, John 79 1987 Independent Director
Champy, James 68 2003 Independent Director
Sicchitano, Kenton 66 2003 Independent Director
Hodgson, John 67 2005 Independent Director
Severino, Paul 64 2005 Independent Director
Istel, Yves-Andre 75 2007 Independent Director
Novich, Neil 56 2008 Independent Director
Address:
One Technology Way
P.O. Box 9106
Norwood, Massachusetts 02062-9106
U.S.A.