CEO, Analog Devices, Inc.
MANHASSET, NY Although leading analog chip vendors, including Analog Devices Inc., Texas Instruments, Linear Technology and Maxim Integrated Products, have all recently come out with "better than expected" quarterly results, nobody is declaring the end of the global recession -- just yet.
Particularly, none of the analog chip companies -- typically a more conservative bunch -- are breathing easy. Cautiously, they report that customers are winding down their inventory corrections, and demand for their products is rebounding.
After very strong Q4 earning results, Jerry Fishman, Analog Devices' CEO, this week gave a rare interview to EE Times. He discussed the market, the company's recent reorganization and the promotions of senior executives, answering questions about a possible succession plan for Fishman -- at the helm since Nov., 1996.
Today, Fishman has every reason to feel good about himself and his company. ADI increased its Q4 revenues by 16 percent sequentially to $572 million.
After the earnings' call, Doug Freedman, analyst at Broadpoint.AmTech, upgraded ADI to "buy" from "neutral," noting that ADI "continues to grow in-line (or better) with analog peers and could possibly outperform given strength in emerging high-volume consumer opportunities (MEMS/accelerometers, HDMI, Analog front-ends)." Freedman added, "Gross margin continues to expand through fab consolidation, mix shift and higher utilizations."
Achieving such results is just shy of miraculous. Not long ago, ADI endured a period when "distributors, and in fact all the customers, just stopped, when the business went to hell. . . and the credit markets didn't allow people to borrow to buy inventories," Fishman recalled.
The good news is that distributors are finally beginning to build inventory. The even better news is that "they are not going out there and just randomly buying inventory," said Fishman. Instead, they're doing so with much more discipline.