Analog Devices, Inc. highlighted its hybrid manufacturing strategy on December 4, 2024, emphasizing its ability to produce the majority of its products either in its own factories or through external partners. By the end of the current fiscal year, approximately 70% of the company's revenue-generating products are expected to have this dual manufacturing capability.
This flexible approach allows Analog Devices to manage factory utilization effectively, mitigating the impact of demand fluctuations. The company typically maintains a 50/50 split between internal and external production, enabling it to scale capacity up or down as market conditions change.
CFO Richard Puccio noted that this strategy was instrumental in maintaining gross margins in the high 60s, even during a period of over 30% peak-to-trough revenue decline. The ability to shift production helps protect profitability and provides a competitive advantage in a dynamic semiconductor market.
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