Market Intelligence Center  Jun 22  Comment 
The patented options-trade picking algorithms used by MarketIntelligenceCenter.com found a trading opportunity with Analog Devices Inc. (ADI) that should provide a 5.45% return in just 88 days. Sell one Sep. '15 call at the $67.50 level for each...
Motley Fool  Jun 19  Comment 
Another analyst confirms Analog Devices' place inside future iPhones.
Market Intelligence Center  Jun 19  Comment 
Thursday’s trading in Analog Devices Inc. (ADI) gives options traders an opportunity for a 21.36% return. By selling the Sep. '15 $67.50 call and buying the Jan. '16 call at the $55.00 level for a net debit of $10.30, traders will book a profit...
TheStreet.com  Jun 15  Comment 
NEW YORK (TheStreet) -- Analog Devices  had its price target increased to $72 from $65 at Credit Suisse which maintained its "outperform" rating. "We believe Analog Devices continues to be under-modeled for the second half of 2015 and 2016...
Market Intelligence Center  Jun 9  Comment 
MarketIntelligenceCenter.com's patented algorithms have identified an attractive covered-call trade on Analog Devices Inc. (ADI). Look at the Sep. '15 $65.00 covered call for a net debit in the $61.95 area. This trade has a duration of 101 days....
Forbes  Jun 1  Comment 
The latest tally of analyst opinions from the major brokerage houses shows that among the components of the S&P 500 index, Analog Devices (ADI) is now the #120 analyst pick, moving up by 1 spot.
TheStreet.com  May 28  Comment 
NEW YORK (TheStreet) -- In the wake of Avago's announcement Thursday that it had reached a deal to acquire Broadcom for $37 billion, Wall Street and tech analysts expect additional mergers in the semiconductor space to come at a fast and...
Market Intelligence Center  May 28  Comment 
For a hedged play on Analog Devices Inc. (ADI) MarketIntelligenceCenter.com’s algorithms selected the Jul. '15 $67.50 covered call for a net debit in the $65.54 area. That is also the break-even stock price for the covered call. This trade will...
Market Intelligence Center  May 26  Comment 
Analog Devices Inc. (ADI) is an excellent choice for either a diagonal spread or a covered call expiring in Sep. '15 at the $65.00 level according to MarketIntelligenceCenter.com’s patented algorithms.A covered call on Analog Devices for a net...


Analog Devices (NYSE: ADI) designs and produces high-performance analog, mixed-signal, and digital signal processing integrated circuits (ICs). The company’s products can be classified into two categories: analog products and digital signal processing (DSP) products. Analog's products are used in a variety of products ranging from automobiles to digital cameras.[1]

Since 2007, Analog Devices has divested away from certain product lines to focus more on high performance signaling processing, something that the company believes will have benefits in the long run. The company faces fierce competition in the rapidly changing semiconductor industry but also possesses growth opportunities in product niches. In 2009 the company had a down year as net income and net sales fell 68% and 22% respectively.[2]

Company Overview

About the Analog and Digital Signal Processing Business

Electrical signals fall into two categories, digital or analog. Analog signals (sometimes known as linear signals) represent real-world phenomena such as temperature, pressure, speed, sound, and motion. Analog sensors measure and collect information on these happenings by generating continuous voltages or currents. These signals are then processed using analog methods such as amplification, filtering, and shaping. For example, an electric guitar and its amplifier uses analog signal processing. The electric current generated by the guitar is filtered, amplified, and then sent to the speaker. Analog Devices produces high-performance analog signal processing ICs that generally support 10-bits of accuracy and a minimum of 50 MHz of speed [3].

These analog signals are sometimes then converted into digital signals, in a process known as digital signal processing. Digital signals differ from analog signals in that they are valued at fixed time intervals and not continuously. Many modern devices use digital signals because they cooperate well with computers; such devices include cell phones, music players, video recorders, and digital cameras. Digital signal processors (DSP) that Analog Devices produce are optimized in high-speed numeric calculations, which are essential in the processing of digital data (analog to digital signal conversion). Analog Devices produces both general-purpose and application-specific DSP ICs.


Analog products represent 91% of the company’s revenue. These analog products are divided into four different categories:

1) Converters (48% of net sales): Includes A/D (analog to digital) and D/A (digital to analog) converters. A/D converters, for example, transform unreadable analog signals to readable digital signals that can be processed by digital devices. This technology is used in a variety of applications such as music recording and TV tuners.

2) Amplifiers(25% of net sales): Analog Devices offers many amplifiers including audio, video, current sense, instrumentation, isolation, log, and RF/IF amplifiers. Electronic amplifiers for example, covert an audio signal with a low amount of energy into a signal with a high amount of energy. In the case of sound, the output is substantially greater in magnitude.

3) Power Management & Reference (6% of net sales): The product line includes battery chargers, fan controllers, LED drivers, and power supply controllers. Many electronic devices are in need of products that provide power management to regulate the amount of energy supplied to different parts of the product at any given time. For example, when a computer goes to sleep, a lower power state, a device is needed to trigger the change.

4) Other Analog (13% of net sales): Which includes advanced IC technology such as micro-electromechanical system (MEMS). MEMS along with signal conditioning allows devices to sense position and acceleration. Currently Analog Devices provides Nintendo (NTDOY) with the MEMS needed in the popular Wii game system controller

DSP products represent 10% of the company’s revenue. DSP products are categorized as:

1) General Purpose DSP (8% of net sales): Analog Devices offers four different families of DSP ranging from 16 to 32-bit. As discussed earlier, DSP is the process in which analog signals are converted to digital signals. Analog Devices creates products that allow for this processing to be done at different speeds and different amounts of information.

2) Other DSP (0% of net sales): This category previously included wireless baseband chipsets.


Industrial: The industrial market is composed of four major areas:

  • Industrial Process Automation: includes applications such as factory automation systems, automatic process control systems, and robotics.
  • Instrumentation: includes engineering, medical, and scientific equipment.
  • Defense/Aerospace: includes navigation systems, flight simulators, radar systems, and security devices.
  • Automotive: includes GPS devices, anti-lock brakes, and crash airbag sensor systems.

Communications: Communications technology requires the acquisition of analog signals that are converted from analog to digital and then digital to analog during transmission. Analog Devices provides products that make these transmissions occur at a higher speed and at reduced power. The company’s products are used in audio, data, image, and video communication.

Consumer: Digital entertainment systems and high quality music, movies, and photos require the use of high-performance ICs. Such products include digital cameras, home theater systems, LCD and plasma televisions, and high-definition DVD players.

Computer: Analog Devices produces products in this market under the brand name SoundMAX. These products are used in laptops, desktops, printers, and scanners.

Business Growth

FY 2009 (ended October 31, 2009)[2]

  • Net income fell 68% to $248 million.
  • Net sales fell 22% to $2 billion. Sales in all of the company's product segments fell by double digits.

Trends and Forces

Analog Must Keep Up With the Pressures of Semiconductor Cyclicality

The semiconductor industry consistently moves in cycles. This highly cyclical industry can be illustrated by rapid changes in technology, rapid obsolescence in products, and evolving technological standards. High fluctuations in the industry are directly connected to maturing products, new product introductions, and the general economic conditions at the time. For Analog Devices this means periods of high downturns and high upturns [6].

Dependence on Growth in Foreign Countries

Analog Devices is very dependent on international sales to generate revenue. In 2009, international sales represented 80% of total sales compared to the 20% of sales in the United States. As foreign countries continue to develop economically and technologically, the need and want for high-performance products is going to rise. For example, sales in China, the world’s fastest economic growing country, have increased from 9% of Analog Devices’ total sales in 2005 to 19% in 2009[7]. The continued growth and development of China and other foreign countries will have positive effects on the company.


Being in the semiconductor industry, Analog Devices faces fierce competition on all fronts. The company is forced to invest a large portion of their money into R&D in order produce new and innovative products to stay ahead of and even with competition. Failure to keep up with the rapidly changing and advancing industry, will have severe negative impacts for the company.

Analog Devices has shown multiple ways it is keeping up with the competitive industry. The company has available general purpose core products that it sells to customers; these general purpose products can be made and distributed quickly. Additionally, if a buyer needs a more specific product from Analog Devices to fit a certain product, the company can devote more time to the development and design of application specific products. The company has also been able to form good relationships with customers in some of their growing product lines such as MEMS (ie. the relationship with Nintendo).

However the company faces many challenges in its DSP product line. Texas Instruments is the world leader in DSP production and controls a large portion of the market share. Due to its size, resources, and brand name popularity, TI has been able to form relationships with many customers who are looking for quality products at low prices. Analog Devices faces the challenge of competing and outperforming an industry giant.

Here is a list of Analog Devices top competitors:


  1. ADI 2009 10-K pg. 1
  2. 2.0 2.1 ADI 2009 10-K "Selected Financial Data" pg. 6
  3. ADI 2009 10K "Analog Products" pg. 3
  4. ADI 2009 10-K "Principle Products" pg. 2-4
  5. ADI 2009 10-K "Markets and Applications" pg. 4-5
  6. ADI 2009 10-K pg. 12
  7. ADI 2009 10-K "Revenue Trends by Geographic Region" pg. 28
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