Supplies Tight for Analog Devices Despite Capacity Boost: CEO

Analog Devices, Inc. (ADI), like most of its peers in the semiconductor industry, expects to face a “supply-constrained environment for the balance of 2021,” said CEO Vincent Roche on a Wednesday earnings call for fiscal Q2 ended May 1. “The supply and demand dynamics in our industry have been well-publicized,” said Roche. “The economic recovery has materialized faster and stronger than initially anticipated, placing unprecedented stress on supply chains globally.” ADI “proactively” invested last year to build capacity, “positioning us to navigate this disruption,” he said. “We are constrained” nevertheless for the year’s second fiscal half, said Roche. ADI’s outlook for fiscal Q3 ending early August is to grow revenue about 16% from a year earlier to $1.7 billion, he said. The forecast “factors in all the elements of supply” across silicon procurements internally and externally, plus “all the back-end operations,” including assembly and testing, he said. “We feel very confident in that number,” said Roche. “Everything” driving supply constraints in future quarters “will depend on demand,” he said. “We’re increasing our capacity. We’re getting more wafer supply in general.” ADI expects “sequential improvements” in its output “over the coming months,” he said. "The second half of the year, given our confidence in supply, we will have a better second half than first half."