By Stephen Nellis
– Analog Devices Inc on Tuesday forecast fiscal first-quarter sales above Wall Street estimates as it said that hundreds of millions of dollars in investments would boost its chipmaking capacity.
Wilmington, Massachusetts-based ADI makes chips that go into industrial robots, 5G telecommunications equipment and, increasingly, automobiles. The company said it expects fiscal first-quarter sales and adjusted profits with midpoints $2.6 billion and $1.78 per share, versus analyst estimates of $2.49 billion and $1.70 per share, according to IBES data from Refinitiv.
ADI, which sources chips both from outside factories and its own network of locations, delayed the closure of a California chip factory earlier this year to help meet customer demand during the global chip crunch. It said on Tuesday that it had spent $340 million in fiscal 2021 to expand internal production capacity.
Much of that will happen at a factory in Beaverton, Oregon, that ADI acquired in its $21 billion purchase of Maxim Integrated.
“We are now putting a serious downpayment to build out that capacity at an existing facility in the Western U.S.,” Chief Executive Officer Vincent Roche told Reuters in an interview. “So it’s really taking an existing footprint, building it up further, and just bringing more of that critical … capacity internal to ADI.”
For the fiscal fourth quarter ended Oct 30, ADI reported sales of $2.34 billion and adjusted earnings of $1.73 per share, above analyst expectations of $2.31 billion and $1.70 per share.