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Analog Devices forecasts sales above estimates as it adds chipmaking capacity

Nov 23 (Reuters) – Analog Devices Inc (ADI.O) on Tuesday forecast fiscal first-quarter sales above Wall Street estimates as it mentioned that tons of of tens of millions of {dollars} in investments would enhance its chipmaking capacity.

Wilmington, Massachusetts-based ADI makes chips that go into industrial robots, 5G telecommunications gear and, more and more, vehicles. The firm mentioned it expects fiscal first-quarter sales and adjusted income with midpoints $2.6 billion and $1.78 per share, versus analyst estimates of $2.49 billion and $1.70 per share, in accordance with IBES knowledge from Refinitiv.

ADI, which sources chips each from outdoors factories and its personal community of places, delayed the closure of a California chip manufacturing unit earlier this 12 months to assist meet buyer demand throughout the world chip crunch. It mentioned on Tuesday that it had spent $340 million in fiscal 2021 to increase inside manufacturing capacity.

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Much of that can occur at a manufacturing unit in Beaverton, Oregon, that ADI acquired in its $21 billion buy 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 instructed 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.

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Reporting by Stephen Nellis in San Francisco
Editing by Matthew Lewis

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