Strong demand across all major geographies and end markets through December helped Linear Technology Corp. exceed sequential sales growth estimates in its second fiscal quarter ended Jan. 2.
Sales grew 10%, to $162.3 million, vs. $147.5 million in the immediately preceding quarter, and 35% compared with last year's $120 million. Linear Technology had expected sequential sales growth of between 4% and 6%, but fears of a Y2K-related slowdown in December never came to pass.
In fact, "December proved to be the strongest month," said Paul Coghlan, vice president, finance, of Linear Technology, in a conference call with analysts this morning.
Net income jumped 41%, to $65 million, from $45.9 million in its second fiscal quarter of 1999.
"Within the United States the distribution channel grew, which is unusual for the fourth calendar quarter," Coghlan said. "That's a broad indicator of economic strength."
Indeed, Linear, a manufacturer of several types of linear ICs such as voltage regulators and power-management devices, expects sequential sales growth to continue in the 8% to 10% range. Orders are being driven by three markets: communications, computers, and automotive, he added.
The computer sector was the fastest-growing end market and accounted for 31% of sales vs. 29% in the year-ago quarter. Communications represents 37% of the company's business compared with 12% just a few years ago.
"There appears to be a good balance between customer demand and our capacity," Coghlan said. "We've been able to maintain low lead times, generally in the four-week range, and although our customers are concerned about product availability, they appear to continue to match their identified needs, and not build inventory."
Although Linear Technology's supply is in synch with customer demand, the company is moving ahead with aggressive expansion plans.
The company's wafer-fabrication facility under construction near its headquarters in Milpitas, Calif., should be completed later this summer and in production in about a year. Linear Technology is also expanding its fabs in Camas, Wash., and Malaysia and Singapore.
"We're making sure that the fab capacity is well ahead of the demand relative to consumption on a quarter-to-quarter basis. That's an area that we're looking at very carefully," said Clive Davies, Linear Technology's president.