1. Penn State Investment AssociationInformation Technology Sector Analog Devices, Inc. (ADI) NYSE Joe Eirkson, Katie Lally, Matt Lochansky The Nittany Lion Fund, LLC.
28. Best-in-Class—Data Converters Market leader in data converter technology (46% market share--exposed to literally every region) In 2010, accounted for 47% of sales (29% increase from 2009) Data converter market expected to increase 9% every year through 2015 Demand for ADI converter technology driven by: Proliferation of digital systems Increasing number of channels of signal processing in new, emerging applications Data converters determine the overall performance of a systemADI offers high-performance, best-in-class solutions Continuously improving architecture and process technologies to meet customers’ needs Customer Design Process: Begins with ADI data converters incorporates other components of ADI product portfolio
29. Company Risk Dependence on third-party subcontractors: Relies on subcontractors and third-party wafer fabricators Generates 50% of its revenue from products at third-party wafer-fabrication facilities Risks: reduced control over availability, capacity utilization, delivery schedules, manufacturing yields and quality and assurance costs Lack of long-term sales contracts: Demand may be volatile in certain end-markers (Long-term contracts are unusual for Semi companies due to constant technological change and upgrades) Intense competition: Technological Pricing Fluctuations in foreign currency: Very sensitivederives 80% of revenue from international markets