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ADI - Analog Devices Inc News Story

$156.91 -2.6  -1.6%

Last Trade - 19/04/21

Sector
Technology
Size
Large Cap
Market Cap £41.40bn
Enterprise Value £44.33bn
Revenue £4.19bn
Position in Universe 213th / 6849

With chip supplies constrained, Analog Devices delays California factory closure

Thu 18th February, 2021 12:04am
By Stephen Nellis and Hyunjoo Jin
    Feb 17 (Reuters) - Analog Devices Inc  ADI.O  is delaying
the closure of a California chip factory as sales boom and
supplies remain tight, the company's chief executive told
Reuters after the company reported better-than-expected
quarterly results. 
    ADI previously said it would close its semiconductor factory
in Milpitas, California, which makes chips for the automotive
industry, sometime before the company's fiscal year ends in
October. In December, ADI told California regulators the plant's
 255 employees would be laid off by Feb. 19. 
    But ADI Chief Executive Officer Vincent Roche on Wednesday
said the plant will stay open longer due to tight supplies that
could persist through October.
    "We'll likely keep that facility open a bit longer to be
able to fill any gaps in supply," Roche said. "We're pretty much
on track to go ahead with the closure by the end of the (fiscal)
year."
    Automakers from General Motors Co  GM.N  to Honda Motor Co
Ltd  7267.T  are battling chip shortages, which led to
suspensions of factories, as consumer demand has snapped back
unexpectedly quickly from the coronavirus crisis.      
    Roche said the company still believes it will be more
cost-effective to consolidate the California factory with its
Washington facility by October, but that it could revisit that
decision in the future.
    "If demand goes up another notch, then that's a different
story," Roche said. He added, "We'll be smart and adaptable as
needed."
    Analog Devices, or ADI, on Wednesday reported that revenue
in the fiscal first quarter ended on Jan. 30 increased 20% to
$1.56 billion and adjusted earnings per share rose to $1.44.
These compared with Wall Street expectations of $1.51 billion
and $1.32 per share, according to IBES data from Refinitiv. 
    The company forecast fiscal second-quarter revenue and
profit with midpoints of $1.6 billion and $1.44 per share,
beating estimates, according to Refinitiv data.

 (Reporting by Stephen Nellis and Hyunjoo Jin in San Francisco
Editing by Cynthia Osterman and Matthew Lewis)
 ((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))
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