Analog Devices (ADI) UBS Global Technology and AI Conference summary

Business trends and outlook

• Bookings showed growth with a recent rebound in auto, especially in China, after a period of decline.

• Inventory levels have been reduced both at customers and in the channel, supporting a positive near-term demand outlook.

• China auto business is strong, with content growth driven by ADAS and electrification, and share regained in higher-end vehicles.

• Industrial demand remains weak, but government stimulus in China is expected to drive future growth.

• Distribution channel inventory was reduced by $300 million in fiscal 2024, with further shipments tied to macro improvement.

China market and competitive positioning

• China’s push for indigenization is challenging due to the complexity and longevity of analog products, with high ASPs and innovation premium.

• Share was regained in China after customers recognized the need for high-performance solutions, supporting a strong multi-year pipeline.

• Most aggressive price pressure is in China auto, but pricing overall has been stable, with innovation and domain expertise as key differentiators.

Manufacturing strategy and supply chain resilience

• Targeting 70% of products with swing capacity by year-end, and 95% of manufacturing capability outside China/Taiwan, pending TSMC Japan fab ramp.

• No plans to exit Taiwan manufacturing unless necessary; resiliency plan included doubling internal capacity and leveraging external partners.

• CapEx-light model maintained, with flexibility to swing capacity between internal and external sources to manage utilization and inventory.