Analog Devices Inc.ADI

Morningstar Rating

Stock Research and Analysis

by Brian Colello, CPA

Analog Devices is the world's fourth-largest analog chipmaker with a robust product portfolio. The company is well positioned in several markets, and its strength in chips used in wireless base stations should be a key growth driver for the firm during Read more

Bulls Say

Analog Devices has more than 60,000 customers and is not reliant on the fortunes of any single chip buyer.

The company has a significant market share lead in converter chips, with 40% share while the firm's next closest competitor, TI, has about 15% share.

Accelerometer chips have expanded beyond the automotive end market, as they are now used in the Nintendo Wii and Apple iPhone. Analog Devices is a leading supplier of these chips and should benefit from further accelerometer adoption.

The company has sold off less profitable business units in recent years, which should provide a boost to long-term operating margins for the firm. Read more

Bears Say

Analog Devices faces tough competition against leading chipmakers, such as Texas Instruments and STMicroelectronics.

The company has failed to gain significant market share in its power management chip business in recent years.

Despite its strong position and diverse exposure, Analog Devices is still vulnerable to the cyclicality of the overall semiconductor industry.

Analog's bias toward the industrial and automotive end markets might hinder the firm in the near term, as these industries might be slower to recover than the economy at large. Read more

Strategy

Analog Devices remains focused on maintaining its position as a leader in analog converter and amplifier chips. Meanwhile, the company hopes to expand its power management chip business, which has a Read more

Management

Jerald Fishman has been CEO of Analog Devices since 1996, and he has more than 25 years of experience with the company. He took over the top job from founder Ray Stata, who remains chairman of the board. We like that Analog Devices has a separation Read more

Profile

Analog Devices is a leading analog, mixed-signal, and digital signal-processing chipmaker. The firm has a significant market share lead in converter chips, which are used Read more

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