Maxim Integrated ProductsMXIM

Morningstar Rating

Stock Research and Analysis

by Brian Colello, CPA

Maxim Integrated Products is a leading analog chipmaker that made a bold shift in strategy a few years ago by entering high-volume segments of the analog semiconductor market. Although Maxim earns lower gross margins on high-volume chips, it should Read more

Bulls Say

Maxim's engineering talent and expertise in HPA chip designs gives the firm a wide economic moat, which enables the company to generate strong profitability.

Maxim has an attractive dividend policy and generates healthy free cash flow on a regular basis.

With an extensive portfolio of superior chip designs, Maxim is well-positioned to create highly integrated products that are sought after in the high-volume markets. Read more

Bears Say

The highly profitable high-performance analog market has been attracting more competitors, which threatens the high gross margins that Maxim has enjoyed for years.

Maxim's move into high-volume analog chips involved significant manufacturing capacity upgrades, which might leave the firm prone to unused facilities if consumer-related end markets tank.

In the high-volume analog chip market, Maxim competes with larger analog firms, such as Texas Instruments TXN, with larger marketing budgets and established customer relationships. Read more

Strategy

Maxim's strategic focus is to remain a balanced and diversified analog chipmaker; fiscal 2009 sales were evenly split between the industrial/communications and consumer/computer end markets. The firm Read more

Management

Tunc Doluca is a Maxim veteran who became president and CEO in January 2007. Doluca succeeded the company's late founder, John Gifford, who also cofounded Advanced Micro Devices AMD before starting Maxim. B. Kipling Hagopian serves as Maxim's chairman; Read more

Profile

Maxim Integrated Products makes high-performance analog and mixed-signal integrated circuits. The company offers a wide range of products serving a host of analog-intensive Read more

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Making a Wide Moat in Chips
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