Chip Supply Chain Isn’t Broken — Just Mishandled, ADI CEO Says

(Bloomberg) — Analog Devices Inc. Chief Executive Officer Vincent Roche said the semiconductor shortage hurting automakers around the world is a problem many of them brought on themselves.

“We’re racing to keep up with the demand from the automotive customers, but remember, automotive made the problem,” Roche said Wednesday in an interview. “It wasn’t too long ago they were asking us to take product back and to cancel backlog.

”The supply chain of the crucial electronic components has come into focus as major vehicle makers such as Ford Motor Co. and General Motors Co. have complained that a dearth of chips is crimping their ability to boost production and meet demand. While supply in general is tight, Roche said, ADI is keeping up with orders in what will likely be a record year of growth for the chip industry.

The Norwood, Massachusetts-based company has posted sales gains for the past two quarters and is on track to report higher revenue in the current period, demonstrating that it has been able to secure enough supply of its own chips from outside manufacturers. ADI does a mixture of manufacturing in-house and outsourcing of production.

Roche said that from start to finish it takes as long as 15 weeks to manufacture, package and test a chip. That’s a mismatch with the way automakers typically manage their supply, holding very little inventory and expecting suppliers to be able to respond to their orders in just-in-time arrangements.

Roche said his company is benefiting from strong demand from industrial customers as they look to modernize factories and add greater automation. In general, when automakers cut orders, production was transferred to other areas such as gaming, consumer, data centers and health care. ADI is closely watching for signs that its customer base is building inventory, but Roche isn’t concerned, because the company believes current shipment levels reflect sales of the devices that the chips go into.

“The supply chain isn’t broken — it’s been mishandled in certain places,” he said.

For more articles like this, please visit us at

©2021 Bloomberg L.P.

Follow us on social media for the latest updates in B2B!



innovative data center practices
Applied Digital Strengthens Community Relations through Innovative Data Center Practices
May 21, 2024

As Applied Digital continues to expand its footprint across rural America, its commitment to integrating with and revitalizing local communities stands out. The company’s unique approach to building and operating data centers brings advanced technology to these areas while stimulating local economies and fostering community development. How does Applied Digital ensure seamless integration and…

Read More
data center operators
From Fields to Data Centers: Applied Digital’s Training Program Transforms Farmers into Data Center Operators
May 21, 2024

Nick Phillips, the EVP of Hosting Operations and Public Affairs at Applied Digital, emphasizes the transformative impact of Applied Digital’s training programs, which convert agricultural land into high-tech data centers and enable farmers to transition into skilled data center operators. This initiative highlights the company’s commitment to community development and technological advancement.

Read More
water conservation and sustainability
Water Conservation and Sustainability Are Critical for a Data Center’s Success
May 21, 2024

Digital infrastructure is essential, and as data centers expand, their environmental impact, water conservation and sustainability have come under scrutiny. As the demand for data storage and processing capabilities grows exponentially, so does the concern for the environmental impact of these facilities, particularly in terms of water usage. Nick Phillips, the EVP of Hosting…

Read More
AI-driven computing
Reducing the Gap in Skilled Trades Can Be Solved by Boosting Trade Education Initiatives
May 21, 2024

Currently, skilled trades are facing significant shortages making the need for innovative solutions and passionate involvement more urgent than before. Statistics indicate a looming gap in the workforce, expected to reach millions in the next decade, as older generations retire without sufficient newcomers to fill their roles. At the heart of this issue is…

Read More