‘We’ll Be Chasing Supply’ at Least Another Year: Analog Devices CEO

With all the “concurrent trends” driving unprecedented demand for semiconductors in the consumer, automotive and industrial sectors, all chipmakers are “chasing supply, and my sense is we’ll be chasing supply in the industry for at least another year,” Analog Devices CEO Vincent Roche told a Bernstein investor conference virtually Wednesday. “The choke point today is largely in the silicon fabrication side of things,” he said. Most of the current industry constraints reside in “external third-party silicon fulfillment,” said Roche. “Our back end -- we got ahead of the cycle and we’ve been putting a lot of capacity into our test facilities to make sure that outgoing tests are well covered, and we still have some redundancy built in there.” No semiconductor customers are “building inventory right now,” said Roche. “My sense is what we’re seeing right now is real demand,” not customers doubling up on orders from multiple suppliers, he said. “We use sell-through” at the point of sale rather than sell-in as the “planning signal” for capacity strategies, he said. “We pay very close attention to what the POS signals are telling us by sector. If we do see anything out of kilter, we’ll balance it and make sure we’ve got supply in the places where the POS signals tell us the supply should be.”