What changed in this filing

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Item 1. Business

2023-11-21 compared with 2022-11-22 · 54 added, 55 removed, 253 unchanged (30% of the section changed)

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Analog Devices, Inc.

(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, Analog Devices or the Company) is a global semiconductor leader 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 worlds 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.

Our comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend across high-performance precision and high-speed mixed-signal, power management and processing technologies – including data converters, amplifiers, power management, radio frequency (RF) ICs, edge processors and other sensors.

The Third Wave of Information and Communications Technology, as we refer to it at Analog Devices, is characterized by ubiquitous sensing, hyper-scale and edge computing and pervasive connectivity.

The Intelligent Edge is characterized by ubiquitous sensing, hyper-scale and edge computing and pervasive connectivity.

These technological trends are driving a continuous evolution of new generations of applications that are increasing the demand for Analog Devices’ high-performance analog, mixed-signal, power and RF ICs.

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We target the most attractive opportunities, particularly across our business-to-business (B2B) markets including Industrial, Automotive and Communications.

We are also deeply committed to extracting value from our recent acquisitions to complement our R&D and drive long-term value creation.

We are also deeply committed to realizing targeted shareholder value creation from our recent acquisitions to complement our R&D and drive long-term value creation.

Through the development of cutting-edge innovations and our ability to solve difficult problems across a broad array of applications, we generate significant cash flow and are deeply committed to delivering strong shareholder returns.

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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.

We believe that our engineering talent continues to be an important competitive differentiator in the semiconductor space that will enable us to continue to deepen our relationships with customers.

We strive to be the destination for the world's best engineering talent with a team of more than 13,000 engineers.

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• Capitalizing on secular trends.

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.

For example, we have executed on this strategy through:

• the acquisition of Hittite Microwave Corporation in the fiscal year ended November 1, 2014, which strengthened our market leadership in high-performance RF and broadened our portfolio across the entire frequency spectrum from DC to 100 gigahertz;

• the acquisition of Linear Technology Corporation (Linear) in the fiscal year ended October 28, 2017, which added high-performance power management and additional precision signal processing to our portfolio, expanding and diversifying our offerings to deliver more complete solutions;

• the acquisition of Maxim Integrated Products, Inc.

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

We are positioned to capitalize on important secular growth trends to drive advancements in digitized factories, mobility and digital healthcare, combat climate change and reliably connect humans and the world.

In addition, we are well-aligned with the key B2B markets driving the increase in data at the Intelligent Edge 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, including the acquisition of Maxim Integrated Products, Inc.

(Maxim) in the fiscal year ended October 30, 2021 (fiscal 2021) which allow us to complement our existing product offerings, expand our market coverage, increase our engineering talent or enhance our technological capabilities.

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

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Our common stock is listed on the Nasdaq Global Select Market under the symbol ADI and is included in the Standard & Poor’s 500 Index.

Our fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October;

October 28, 2023 (fiscal 2023), the fiscal year ended October 29, 2022 (fiscal 2022) and the fiscal year ended October 30, 2021 were 52-week fiscal periods.

Acquisition of Maxim Integrated Products, Inc.

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We maintain a website with the address www.analog.com.

We are not including the information contained on our website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.

We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (including exhibits), and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (SEC).

We also make available on our website our by-laws, corporate governance guidelines, the charters for our audit committee, compensation committee, and nominating and corporate governance committee, our equity award granting policies, our code of business conduct and ethics which applies to our directors, officers and employees, and our related person transaction policy, and such information is available in print and free of charge to any shareholder of Analog Devices who requests it.

We also make available on our website our by-laws, corporate governance guidelines, the charters for the committees of our Board of Directors and our code of business conduct and ethics which applies to our directors, officers and employees and other governance documents.

Such information is available in print and free of charge to any shareholder of Analog Devices who requests it.

In addition, we intend to disclose on our website any amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to rules of the SEC or Nasdaq.

We have included our website address in this Annual Report on Form 10-k as an inactive textual reference.

We are not including the information contained on our website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.

Semiconductor components are the building blocks used in electronic systems and equipment.

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Given the high cost of developing more customized ICs, our standard products often provide a cost-effective solution for many low to medium volume applications.

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.

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.

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.

We also work with customers to design application-specific solutions.

We begin with our existing core technologies, which leverage our analog and mixed signal, power management, RF and microwave, edge processors and other sensors, and devise solutions that more closely meet the needs of a specific customer or group of customers.

Because we have already developed the core technology platform for our general-purpose products, we can create application-specific solutions quickly and efficiently.

Our analog and mixed-signal IC technology has been the foundation of our business for over five decades, and we are one of the world’s largest suppliers of high-performance analog ICs.

In certain cases, because we have already developed the core technology platform for our general-purpose products, we can create application-specific solutions quickly and efficiently.

Our analog and mixed-signal IC technology have been the foundation of our business for over five decades, and we are one of the world’s largest suppliers of high-performance analog ICs.

Our analog signal processing ICs are primarily high-performance devices, offering higher dynamic range, greater bandwidth and other enhanced features.

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Some of them also sell products that compete with our products, including those for which we are an alternate source.

We make sales to distributors under agreements that allow 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 make sales to distributors under agreements that allow 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.

These agreements limit such returns to a certain percentage of our shipments to that distributor during the prior quarter.

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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.

As a result, we may incur inventory and manufacturing costs in advance of anticipated sales and are subject to the risk of cancellation of orders leading to a sharp reduction of sales and backlog.

Further, those orders or forecasts may be for products that meet the customer’s unique requirements so that those canceled orders would, in addition, result in an inventory of unsaleable products, resulting in potential inventory write-offs.

As a result of lengthy manufacturing cycles for some of our products that are subject to these uncertainties, the amount of unsaleable product could be substantial.

Further, those orders or forecasts may be for products that meet the customer’s unique requirements such that those canceled orders would result in an inventory of unsaleable products, causing potential inventory write-offs.

The breakdown of our annual revenue by end market is set out in the table below:

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Many of our ICs can be supplied in versions that meet these standards.

In addition, many products can be supplied to meet the standards required for broadcast satellites and other commercial space applications.

In addition, many products can be supplied to meet the standards required for broadcast satellites and other commercial space

applications.

Most of our products sold in this market are specially tested versions of products derived from our standard product offering.

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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.

products include applications such as:

Customer products include applications such as:

• Navigation systems • Radar systems

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Our sales are subject to a varying degree of seasonality.

Historically, sales to customers during our first fiscal quarter may be lower than other quarters due to plant shutdowns at some of our customers during the holiday season.

Historically, sales to customers during our first fiscal quarter may be lower than other quarters due to plant shutdowns at some of our customers.

In general, the seasonality for any specific period of time has not had a material impact on our results of operations.

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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.

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.

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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 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 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 wafer sort 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.

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.

Although we have experienced shortages of components, materials and external foundry services from time to time, we work to balance these constraints by shifting global resources and capacity where appropriate.

Patents and Intellectual Property Rights

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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.

Environment, Health and Safety Compliance

Environment, Social and Governance

We are a member of the Responsible Business Alliance as well as a signatory to the United Nations Global Compact and the Business Ambition for 1.5°C campaign.

Our 2022 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 targets, as well as updates on topics such as stakeholder value, risks and opportunities, regulatory preparedness, ESG ratings and key ESG focus areas.

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

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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 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.

Our EHS management systems in all of our manufacturing facilities are certified to ISO 14001:2015 for environmental management and ISO 45001:2018 for occupation health and safety.

Our industrial hygiene surveillance program is designed to minimize and prevent exposures in the workplace.

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

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

In fiscal 2023 and 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.

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.

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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 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.

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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implementing a third-party risk management program to evaluate our critical partners’ cyber posture;

and evaluating our program effectiveness by performing internal and external audits.

and evaluating our program effectiveness by performing internal and external assessments.

Risks identified by our cybersecurity program are analyzed to determine the potential impact on us and the likelihood of occurrence.

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.

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

The Chief Information Officer regularly 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.

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 self-insure for cybersecurity risks and continue to monitor mitigation strategies.

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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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 noted in "Environment, Social and Governance" above, we published our 2022 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 28, 2023, we had approximately 26,000 employees, of whom approximately 13,000 are in engineering roles.

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

We strive to attract and retain the most talented employees in the industry and across the globe by offering competitive compensation and benefits that support their health, financial and emotional well-being.

We strive to attract and retain the most talented employees in the industry and across the globe by

offering competitive compensation and benefits that support their health, financial and emotional well-being.

Our compensation philosophy is based on rewarding each employee’s individual contributions and striving to achieve equal pay for equal work regardless of gender, race or ethnicity.

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education assistance;

paid counseling

paid counseling assistance;

backup child and adult care;

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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, respectful treatment, commitment to diversity/inclusion and accountability.

Our latest survey completed in fiscal 2022 had a participation rate of over 83% of all our employees and 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 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).

TIME World's Best Companies (2023), Forbes America's Best Employers by State (2023), Forbes World's Top Female Friendly Companies (2022, 2021) and The Boston Globe’s Top Places to Work (2021).

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