BROOKLYN, N.Y. -- Analog Devices Inc. has expanded its product portfolio in a big way. With its $2 billion cash deal to acquire RF chip maker Hittite Microwave Corp. last week, ADI will gain more than a 1,000 RF chip products that cover the frequency range of DC to 110 GHz: RF (0 to 6 GHz), microwave (6 GHz to 20 GHz) and millimeter wave (20 GHz to 110 GHz).
By adding microwave and millimeter wave technology expertise to its RF and signal processing arsenal, ADI will deepen its penetration in the industrial, communications infrastructure, and automotive markets, which account for 89% of its revenue, as well as strengthen its financial position.
“ADI will be able to serve our customers with technology capable of converting the entire frequency spectrum, including RF, microwave and millimeter wave,” said Vincent Roche, president and chief executive, in a conference call with analysts following the deal’s announcement [June 9]. “We believe this capability meaningfully differentiates ADI.”
However, it also allows ADI to “return to its roots” since it started out as military and aerospace supplier, according to Stephan Ohr, research director in Gartner’s technology and service provider unit, San Francisco. “Who else could afford precision data converters back in the 1960s?” Ohr asks, adding that ADI was part of coterie of module suppliers known as “The 128 circle.”
“With the acquisition of Hittite, Analog Devices repositions itself on the high-end of radio parts suppliers. Their transmitter/receiver components will support radar and satellite communications, and their customers will include aerospace companies,” Ohr says.
Hittite Microwave, based in Chelmsford, Mass., is heavily focused on serving the military, microwave, and millimeter-wave communications and cellular infrastructure applications. In its first quarter of 2014, the company reported revenue of $70.6 million of which 78% was derived from those markets. Gross-profit margin was 67.4%. Hittite has 36 product lines, which include power amplifiers, variable gain amplifiers, sensors, switches, and attenuators, as well as frequency dividers and multipliers.
“Hittite’s analog front ends will complement ADI’s high-sample-rate converters, a line of 100-MHz and 150-MHz analog-to-digital converters with 14-bit and 16-bit resolution, to support cellular basestation receivers,” Ohr said. “Unlike the traditional analog down-converters, which use an intermediate beat frequency to subtract the carrier from the RF composite, the digital receivers (with the A/D converters) capture an RF swath and use a DSP to digital segregate channels and talkers.”
ADI’s signal processing solutions also includes operational amplifiers and linear products, as well as DSPs, processors, and MEMS devices. When the deal is completed, ADI’s amplifier/RF product revenue base will approach nearly $1 billion.
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