What changed in this filing

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Item 1. Business

2022-11-22 compared with 2021-12-03 · 61 added, 74 removed, 247 unchanged (35% of the section changed)

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Analog Devices, Inc.

(we, Analog Devices or the Company) is a leading global high-performance semiconductor company dedicated to solving our customers' most complex engineering challenges.

We play a critical role at the intersection of the physical and digital world by providing the building blocks to sense, measure, interpret, connect and power.

(we, Analog Devices or the Company) is a leading semiconductor company dedicated to solving our customers' most complex engineering challenges.

We deliver innovations that connect technology to human breakthroughs and play a critical role at the intersection of the physical and digital world by providing the building blocks to sense, measure, interpret, connect and power.

We design, manufacture, test and market a broad portfolio of solutions, including integrated circuits (ICs), software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies.

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• Deepening customer-centricity.

We possess a broad range of product portfolios, applications expertise, and manufacturing capabilities in high-performance power management and precision and high-speed signal processing technologies.

Close customer relationships influence aspects of our business:

from our broad range of product portfolios and applications expertise to manufacturing capabilities in high-performance power management and precision and high-speed signal processing technologies.

At the same time, our engineering talent continues to be an important competitive differentiator in the semiconductor space.

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• Capitalizing on secular trends.

We are positioned to capitalize on important secular growth trends, including Industry 4.0, 5G communications networks, data center connectivity, electric vehicles, in-cabin experience, digital healthcare and space, as we are well-aligned with the key B2B markets driving this increase in data and we will continue to be a critical partner in the collection, creation and communication of our customers’ edge data.

We are positioned to capitalize on important secular growth trends, including the Intelligent Edge, industrial automation, ubiquitous connectivity, electric vehicles, in-cabin experience, digital healthcare and space, as we are well-aligned with the key B2B markets driving this increase in data and we will continue to be a critical partner in the collection, creation and communication of our customers’ edge data.

In addition to driving organic growth, our strategy involves expansion through the acquisition of businesses, assets or technologies that allow us to complement our existing product offerings, expand our market coverage, increase our engineering talent or enhance our technological capabilities.

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• the acquisition of Maxim Integrated Products, Inc.

(Maxim) completed on August 26, 2021 and further described below, which strengthens our position as a high-performance analog semiconductor company.

(Maxim) in the fiscal year ended October 30, 2021 (fiscal 2021), which strengthens our position as a high-performance analog semiconductor company.

We were incorporated in Massachusetts in 1965 with our corporate headquarters near Boston in Wilmington, Massachusetts.

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More specifically, our analog ICs monitor, condition, amplify or transform continuous analog signals associated with physical properties, such as temperature, pressure, weight, light, sound or motion, and play an important role in bridging real world phenomena to a variety of electronic systems.

Analog ICs also provide voltage regulation and power control to electronic systems.

Our analog ICs also provide voltage regulation and power control to electronic systems.

We also focus on working with leading customers to design application-specific solutions.

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Our high-performance power ICs include powerful performance, integration and software design simulation tools to provide fast and accurate power supply designs.

• Amplifiers/Radio Frequency (RF) and Microwave —We are also a leading supplier of high-performance amplifiers which are used to condition analog signals.

• Amplifiers/RF and Microwave —We are also a leading supplier of high-performance amplifiers which are used to condition analog signals.

High performance amplifiers emphasize the performance dimensions of speed and precision.

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Our high-performance RF and microwave ICs support the high-performance requirements of cellular infrastructure and a broad range of applications in our target markets, including instrumentation, aerospace and automotive.

• Sensors & Actuators —Our analog technology portfolio is comprised of sensor and actuator products, including products based on MEMS technology.

• Sensors & Actuators —Our analog technology portfolio is comprised of sensor and actuator products, including products based on micro-electro-mechanical systems (MEMS) technology.

MEMS technology enables us to build extremely small sensors that incorporate an electromechanical structure and the supporting analog circuitry for conditioning signals obtained from the sensing element.

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We typically do not have long-term sales contracts with our customers.

In some of our markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even

any, of the product.

In some of our markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and

have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even any, of the product.

In other instances, we manufacture product based on forecasts of customer demand.

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Industrial — Our industrial market includes the following sectors:

Industrial Automation — We are a leader in industrial automation because we deliver robust, high performance solutions that impact our planet and people—from our deep motion and process control expertise and precision sensing measurement and interpretation, to expansive connectivity and power capabilities.

Industrial Automation — We are a leader in industrial automation because we deliver robust, high performance solutions from our deep motion and process control expertise and precision sensing measurement and interpretation to expansive connectivity and power capabilities.

We take real-world phenomena in the most complex environments on the factory floor and translate it into valuable insights and outcomes.

We co-create with customers to architect robotics systems and solutions that improve dynamic behavior and precision while enhancing worker safety, machine health, and manufacturing flexibility—delivering energy efficiency and sustainability.

We co-create with customers to architect robotics systems and solutions that improve dynamic behavior and precision while enhancing worker safety, machine health, and manufacturing flexibility.

Our industrial automation market includes applications such as:

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• Factory and process control

Instrumentation & Measurement — Advances in wireless communication technology, autonomous vehicles, energy storage, human machine interfaces and cloud-connected sensors that help form the Internet of Things are driving the demand for faster and more precise measurement capabilities in smaller form-factors.

Our semiconductors and advanced packaging technologies form the foundation of next-generation electronic test and measurement solutions for measuring the electrical parameters in applications such as these, enabling the research, development and production of future electronic systems.

In addition, our ICs have set the standard for precision in battery formation and test, which is critical for ensuring battery quality and safety in electric vehicles.

Instrumentation & Measurement — Trusted measurement is at the forefront of innovation.

With the rapid pace of global transformation, from ubiquitous connectivity, to electrification, to artificial intelligence, to human health and environmental sustainability — all these trends require reliable and efficient test solutions from R&D to manufacturing to field deployment.

We enable high performance measurement through our components and system solutions.

Our RF, high-speed and power management products are designed to enable solutions for complying with evolving communications standards.

Our high-voltage, isolation and precision products are a key part of the systems that are designed for safety, longevity and efficiency in electric vehicles and renewable energy.

Beyond electrical testing, our precision and power technology enable analytical instruments for drug or vaccine R&D and manufacturing, food safety and quality, and environmental monitoring.

Our instrumentation and measurement market includes applications such as:

• Automated test equipment • Battery formation and test

• Weigh scales • Chemical analysis and analytical instruments

• Automated test equipment • Automotive and energy test

• Electronic test and measurement • Life sciences and drug discovery

• Environmental and process analysis

Aerospace/Defense — The defense, commercial avionics and space markets all require high-performance ICs that meet rigorous environmental and reliability specifications.

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As such, we also sell products in the form of SiPs (system in package), printed circuit board assemblies, modules, and subsystems.

Customer products include applications such as:

products include applications such as:

• Navigation systems • Radar systems

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• Microwave backhaul systems • Optical and cable networking equipment for data center and carrier providers

• Data centers & data storage

Consumer — To address the market demand for state of the art personal and professional entertainment systems and the consumer demand for high quality user interfaces, music, movies and photographs, we have developed analog, digital and mixed-signal solutions that meet the rigorous cost and time-to-market requirements of the consumer electronics market.

The emergence of high-performance, feature-rich consumer products has created a market for our high-performance ICs with a high level of specific functionality that enables best in class user experience.

• Data centers and data storage

Consumer — To address the market demand for state of the art personal and professional entertainment systems and the consumer demand for high quality user interfaces, music, movies and photographs, we have developed analog, digital and mixed-signal and power solutions that meet the rigorous cost and time-to-market requirements of the consumer electronics market.

These products include:

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See Note 4, Industry, Segment and Geographic Information , of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information about our products by end market.

We believe that competitive performance in the marketplace for signal processing products depends upon multiple factors, including technological innovation, strength of brand, diversity of product portfolio, product performance, technical support, delivery capabilities, customer service quality, reliability and price, with the relative importance of these factors

varying among products, markets, and customers.

We compete with a number of semiconductor companies in markets that are highly competitive.

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Our competitors also include both emerging companies selling specialized products in markets we serve and companies outside of the U.S., including entities associated with well-funded efforts by foreign governments to create indigenous semiconductor industries.

Our competitors include but are not limited to:

• Broadcom Inc.

• Monolithic Power Systems, Inc.

• Infineon Technologies AG • NXP Semiconductors N.V.

• Microchip Technology Incorporated • Qorvo, Inc.

• STMicroelectronics N.V.

• Texas Instruments Incorporated

• Xilinx, Inc.

We believe that our technical innovation emphasizing product performance and reliability, supported by our commitment to strong customer service and technical support, enables us to make a fundamental difference to our customers’ competitiveness in our chosen markets.

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In periods of increased demand, there is a tendency towards longer lead times that has the effect of increasing backlog and, in some instances, we may not have manufacturing capacity sufficient to fulfill all orders.

Recently, we have experienced increased demand within the semiconductor industry leading to a constrained supply environment which we believe will continue in the near term.

We have added manufacturing capacity to address some of the increased demand and we have also required customers to commit to orders for up to a twenty week period prior to shipment to give us better visibility into the backlog.

Outside of the commitments window noted above, as is customary in the semiconductor industry, we allow most orders to be canceled or deliveries to be delayed by customers without significant penalty, while also allowing certain distributors to receive price adjustment credits and to return qualifying products for credit, as determined by us, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory.

We have experienced increased demand over the past two years leading to a constrained supply environment.

In response, we have added manufacturing capacity to address some of the increased demand.

As is customary in the semiconductor industry, we allow most orders to be canceled within a reasonable notification period or deliveries to be delayed by customers without significant penalty, while also allowing certain distributors to receive price adjustment credits and to return qualifying products for credit, as determined by us, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory.

Production Resources

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and Limerick, Ireland and also on a mix of proprietary and non-proprietary processes at third-party wafer fabricators.

We currently source approximately half of our wafer requirements annually internally and the remaining from third-party wafer fabrication foundries, such as Taiwan Semiconductor Manufacturing Company (TSMC) and others, typically where deep-submicron lithography capabilities and/or large manufacturing capacity is required.

In addition, we operate an assembly and wafer sort facility in Penang, Malaysia, and test facilities in the Philippines and Thailand.

We currently source more than half of our wafer requirements annually from third-party wafer fabrication foundries, such as Taiwan Semiconductor Manufacturing Company (TSMC) and others, and the remainder is sourced internally.

In addition, we operate an assembly, wafer sort and testing facility in Penang, Malaysia, and test facilities in the Philippines and Thailand.

We also make extensive use of third-party subcontractors for the assembly and testing of our products.

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We have multiple sources for many of the components and materials that we purchase and incorporate into our products.

If any of our key suppliers are unable or unwilling to manufacture and deliver sufficient quantities of components to us on the time schedule and of the quality that we require, we may be forced to seek to engage additional or replacement suppliers, which could result in significant expenses and disruptions or delays in manufacturing, product development and shipment of product to our customers.

Given the current demand environment in the semiconductor industry, we expect to face a constrained supply environment in the near term.

We are working to balance these constraints as we shift our global resources and add capacity where appropriate.

product development and shipment of product to our customers.

Although we have experienced shortages of components, materials and external foundry services from time to time, we are working to balance these constraints as we shift our global resources and change capacity where appropriate.

Patents and Intellectual Property Rights

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patents and approximately 440 published pending U.S.

patent applications with expiration dates ranging from 2021 through 2041.

patent applications.

There can be no assurance, however, that the rights obtained can be successfully enforced against infringing products in every jurisdiction.

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We also have trademarks that are used in the conduct of our business to distinguish genuine Analog Devices products, and we maintain cooperative advertising programs to promote our brands and identify products containing genuine Analog Devices components.

Environmental, Health and Safety Compliance

Environment, Health and Safety Compliance

We are committed to protecting the environment and the health and safety of our employees, customers and the public.

We endeavor to adhere to applicable environmental, health and safety (EHS) regulatory and industry standards across all of our facilities, and to encourage pollution prevention, reduce our water and energy consumption, reduce waste generation, and strive towards continual improvement.

We endeavor to adhere to applicable environment, health and safety (EHS) regulatory and industry standards across all of our facilities, and to encourage pollution prevention, reduce our water and energy consumption, manage waste streams to divert from landfills, and strive towards continual improvement.

We strive to achieve excellence in EHS management practices as an integral part of our total quality management system.

Our EHS management systems in all of our facilities are certified to ISO 14001:2015 for environmental management, and all of our facilities conform to ISO 45001 for occupational health and safety.

Our industrial hygiene surveillance program minimizes and prevents exposures in the workplace and reduces the risk of specific diseases.

Our EHS management systems in all of our manufacturing facilities are certified to ISO 14001:2015 for environmental management.

In addition, our legacy Analog Devices facilities are certified to ISO 45001 for occupational health and safety, and as part of our integration efforts, we are developing a path to certification for our legacy Maxim sites as well.

Our industrial hygiene surveillance program minimizes and prevents exposures in the workplace.

We use two industry standard metrics to assess injury performance and trends worldwide.

Legacy Analog Devices' sites have ISO 45001 health and safety certification, with the exception of one site from the acquisition of Linear Technology Corporation which is planned for certification to the same standard by the second quarter of fiscal 2022.

As part of our integration efforts, management is assessing the path to certification for Maxim sites.

In fiscal 2021 and the fiscal year ended October 29, 2022 (fiscal 2022), our global injury rates were lower than the U.S.

semiconductor industry benchmark.

Our manufacturing facilities are subject to numerous and increasingly strict federal, state, local and foreign EHS laws and regulations, particularly with respect to the transportation, storage, handling, use, emission, discharge and disposal of certain chemicals used or produced in the semiconductor manufacturing process.

Our products are subject to increasingly stringent regulations regarding substance content in jurisdictions where we sell products, including the Restriction of Hazardous Substances (RoHS) directive in the European Union and China and the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) directive in the European Union.

Our products are subject to increasingly stringent regulations regarding substance content in jurisdictions where we sell products.

Contracts with many of our customers reflect these and additional EHS compliance standards.

Substance content of our products includes materials that are subject to conflict mineral reporting requirements.

Compliance with these laws and regulations has not had a material impact on our capital expenditures, earnings, financial condition or competitive position.

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Any failure by us to comply with applicable environmental laws, regulations and contractual obligations could result in fines, suspension of production, the need to alter manufacturing processes and legal liability.

We are a member of the Responsible Business Alliance, which was formerly known as the Electronic Industry Citizenship Coalition, as well as a participant of the United Nations Global Compact and the Business Ambition for 1.5°C campaign.

Our Corporate Responsibility Report (CRR) states our commitment to be carbon neutral by calendar year 2030 and achieve net zero emissions by calendar year 2050, to conserve resources by consuming less energy and water, to comply with our code of business conduct and ethics, and to apply fair labor standards, among other things.

We are neither including the

information contained in our CRR in, nor incorporating it by reference into, this Annual Report on Form 10-K.

The CRR is available on our website at www.analog.com/sustainability.

To further strengthen these commitments to environmental, social and governance (ESG) initiatives, we recently deployed three sustainable finance instruments.

In April 2020, we completed our inaugural green bond issuance of $400 million, marking our leadership as the first semiconductor company and one of the first U.S.

technology companies to issue a green bond in the U.S.

debt capital markets.

In June 2021, we refinanced our revolving credit facility with a new $2.5 billion sustainability-linked revolving credit facility, becoming one of the first semiconductor companies to use this instrument.

In October 2021, we issued our inaugural sustainability-linked $750 million bond offering.

These transactions support our commitment to environmental sustainability by linking financing to the achievement of our ambitious ESG targets.

We are a member of the Responsible Business Alliance, which was formerly known as the Electronic Industry Citizenship Coalition, as well as a signatory to the United Nations Global Compact and the Business Ambition for 1.5°C campaign.

Our 2021 Environment, Social and Governance (ESG) Report states our goals to be carbon neutral by calendar year 2030, to achieve net zero emissions by calendar year 2050 or sooner, to achieve a water recycling rate of at least 50% in manufacturing facilities by 2025, to comply with our code of business conduct and ethics and to apply fair labor standards.

The ESG Report is available on our website at www.analog.com/sustainability.

The contents of our website and the information contained in our ESG Report are not incorporated by reference into this Annual Report on Form 10-K.

To support our commitment to ESG, we have implemented an oversight structure which includes a quarterly reporting cadence both to senior management and the Nominating and Corporate Governance Committee of the Board of Directors.

These quarterly reports include updates on progress against goals, assessment of regulatory preparedness, stakeholder engagement feedback, and programmatic progress and challenges.

Cybersecurity and Information Security Risk Oversight

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Such risks are continuously monitored to ensure that the circumstances and severity of such risks have not changed.

Senior leadership and our internal audit team regularly provide the Audit Committee of the Board of Directors with updates on the performance of our program.

At least annually, the Chief Information Officer updates the full Board of Directors on information security matters and risk, including cybersecurity.

We conduct regular workforce training to instruct employees to identify cybersecurity concerns and take the appropriate action.

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Periodically, we are audited by an independent information systems expert to determine both the adequacy of, and compliance with, controls and standards.

Senior leadership and Internal Audit present to our full Board of Directors on information security and cybersecurity matters and risks at least annually.

We have conducted an analysis and determined that an information security risk insurance policy would not be effective, and that we should continue to self-insure for cybersecurity risks.

We have determined that an information security risk insurance policy would not be effective, and that we should continue to self-insure for cybersecurity risks.

We have not experienced a material security breach in the last three years, and as a result, we have not incurred any net expenses from such a breach.

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We are working to achieve this by expanding the diversity of our workforce, creating growth and development opportunities for our employees, embracing different perspectives and fostering an inclusive work environment for all.

We launched the People of Color and Allies Network (POCAN), a new employee resource group focused on elevating and prioritizing the needs of people of color and creating opportunities to support colleagues from underrepresented groups.

POCAN broadens our network of existing employee groups, including the Women's Leadership Network, Young Professionals Network, and LGBTQ+ Network, which all contribute to our broader diversity and inclusion initiatives.

As noted in "Environmental, Health and Safety Compliance" above, we published our annual CRR which details our sustainability efforts, operations efficiency, employee engagement, and governance, and also provides a look at the state of our organization and overview of some of the initiatives we have launched to drive continuous improvements across diversity and inclusion.

In addition, we encourage employees to organize and develop different employment networks, which contribute to our broader diversity and inclusion initiatives.

Our current employee networks include the Analog Veterans Network, Neurodiversity Network, People of Color and Allies Network, Pride Network, Women’s Leadership Network, Young Professionals Network, the Green Team and the Communities Activities Board.

As noted in "Environment, Health and Safety Compliance" above, we published our 2021 ESG report which details our sustainability efforts, operations efficiency, employee engagement, and governance, and also provides a look at the state of our organization and an overview of some of the initiatives we have launched to drive continuous improvements across diversity and inclusion.

As of October 29, 2022, we had approximately 24,450 employees, of whom approximately 11,400 are in engineering roles.

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30% of the members of our Board of Directors are female.

For the year ended October 30, 2021 (fiscal 2021) our voluntary employee turnover rate was approximately 6.7%.

For fiscal 2022, our voluntary employee turnover rate was approximately 11.2%.

Our human capital resource objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and future employees.

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education assistance;

paid counseling assistance;

paid counseling

backup child and adult care;

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For further information concerning our equity incentive plans, see Note 3, Stock-based Compensation and Shareholders' Equity , of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.

We conduct annual assessments that review department goals to identify talent needs, assess how each division is positioned from a talent perspective, review the current state of talent vitality for each division, review key talent segments and prioritize actions to identify and develop talent.

We encourage all employees to never stop learning through the 70-20-10 philosophy.

We believe that by employees growing through career experiences (70%), learning from others (20%) and education (10%), they can continue to further their own growth and development.

We offer employees access to various internal and external formal training and development courses to support individual development.

We regularly review succession plans and focus on promoting internal talent to help grow our employees' careers.

In order to ensure that we are meeting our human capital objectives we frequently utilize employee surveys to understand the effectiveness of our employee and compensation programs and where we can improve across the company.

Our latest survey, which was completed in fiscal 2021 prior to the Acquisition, had a participation rate of over 83% of legacy employees of Analog Devices.

The survey results indicated that we excel in areas including purpose, goals sharing, employee collaboration and overall culture.

The survey results indicated that we excel in areas including purpose, respectful treatment, commitment to diversity/inclusion and accountability.

Our dual focus of being a great place to work and providing industry-leading benefits and work culture has led to strong employee satisfaction and pride that has been recognized across the globe, as evidenced with the following awards:

Forbes America’s Best Employers List (2020, 2019, 2018), Forbes Global 2000:

World’s Best Employer List (2019, 2018) and The Boston Globe’s Top Places to Work (2020, 2019, 2018, 2017).

Forbes World's Top Female Friendly Companies (2022, 2021), Forbes World’s Best Employer List (2020) and The Boston Globe’s Top Places to Work (2021, 2020).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business