ADI Announces Up to 20% Price Hike from February

Analog Devices Inc. (ADI), a leading player in analog semiconductor manufacturing, has officially communicated a forthcoming price adjustment, signaling an increase ranging from 10% to 20%. This adjustment is scheduled to take effect on February 4th of the upcoming year.

In the official notice, ADI underscores its unwavering commitment to ensuring the dependable production of components and affirms its dedication to avoiding any arbitrary halts in component production within manageable parameters. To sustain its commitment to customers, the company will be implementing price increases on select older product lines, effectively mitigating the cost pressures associated with maintaining production levels. In the event of customer concerns regarding the price adjustment, ADI assures its clientele that it will strive to provide optimal replacement solutions for components.

ADI's recent financial report, released last month, revealed a 16% year-on-year decline in fourth-quarter revenue, totaling $2.72 billion. This dip was influenced by the persistent high levels of semiconductor inventory. Notably, automotive revenue experienced a positive trajectory, growing by 14% to reach $730 million, constituting 27% of the overall revenue. The industrial sector, contributing approximately 50% of the total revenue, witnessed a 20% year-on-year decline to $1.35 billion in the fourth quarter.

Vincent Roche, the Chief Executive Officer of ADI, acknowledged the subdued demand in the industrial semiconductor sector, with virtually all applications experiencing a downturn. However, he highlighted the continued demand resilience in the defense and aerospace industries.

Reflecting on the entirety of the 2023 fiscal year, ADI reported a revenue of $12.3 billion, marking a 2% increase compared to the preceding year. This growth was attributed to record-breaking performances in the industrial and automotive sectors. The company's gross profit increased by 5%, reaching $7.9 billion, resulting in a gross profit margin of 64%. Operating income experienced a substantial 17% growth, reaching $3.8 billion, with an operating profit margin of 31.1%.