There’s a lot going on in the industry.
Analog Acquisition and Allied’s New Directors. Let’s start with Analog Devices acquiring Linear Technology for $14.8 billion, continuing the trend of big consolidations within the semiconductor sector. ADI reported annual semiconductor revenue of $3.4 billion in 2015, while LLTC revenue was $1.4 billion.
After examining the potential margin improvement, product portfolio, and end-market focuses of these two companies, Jonathan Liao, senior analyst, power semiconductors, IHS Markit, says the acquisition will increase the competitiveness of ADI in several end markets.
In Research Note: Analog Devices to acquire Linear Technology, Liao says both ADI and LLTC boast “decent gross margins and operating margins,” which hover around 37% and 7%, respectively. If correctly executed, Liao feels that the acquisition of LLTC by ADI will help boost margin performance, from a gross margin and operating margin standpoint.
“The resulting company is expected to post gross margins in the high-60s and operating margins in the mid-30s,” he writes. “If integrated properly, the resulting figures provide a substantial margin improvement for a company with $4.8 billion dollars in annual revenue.”
With over 80% of its products being general-purpose analog devices used in various end markets in the industry (including computing, communications, industrial, automotive, and consumer electronics), ADI specializes in converters, amplifiers, radio frequency (RF), signal processing, and power management devices.
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Allied Electronics names Two New Directors
Allied Electronics, a trading brand of Electrocomponents plc, has announced the addition of one director and the promotion of another, Rebecca Weiser and Mary Edmonds, respectively.
Weiser joins Allied as product director in product management for the Interconnect, Passives, and Electromechanical category of industrial automation products. Prior to joining Allied, Weiser was global sales manager for Future Electronics after serving on the Future DFW (Dallas/Fort Worth) sales team.
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