⚠ Test and Assembly by SubcontractorsLow threat

Analog Devices (ADI) — threat to the moat

ADI's final test and assembly runs in the Philippines, Thailand and at subcontractors, so trade rules and local disruptions can hold up finished chips.

ADI's supply chain ends in places it does not fully control. Besides its own sort and test sites in the Philippines and Thailand, it relies on outside contractors: the 10-K says it makes "extensive use of third-party subcontractors for the assembly and testing of our products"1. Plant in the Philippines was $433.0 million and in Thailand $263.9 million at the end of fiscal 20252.

Analog Devices plant outside the US and Ireland, FY2025 ($M)Philippines433.0Thailand263.9Malaysia36.9Analog Devices Form 10-K FY2025, long-lived assets by country
Two countries hold most of the plant outside the US and Ireland.

Concentrating the final steps in a few countries brings the usual risks. The 10-K's list of factors that can move results includes "fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing, assembly and test capacity"3. A flood, an outage or a change in trade rules in one country can hold up finished goods even when wafers are plentiful.

Trade rules are the live issue. The company's forward-looking statements list "recently announced and future tariffs and other trade restrictions; changes in export classifications"4 among its risks. Where a chip is finished can decide its country of origin and so its tariff.

The Penang sale reduced the number of sites, which simplifies operations and concentrates the risk. ADI's own plant outside the United States and Ireland is now mostly in two countries.

This danger is rated low because nothing in the filings suggests a current problem. It would rise if ADI reported a supply interruption at a test site or subcontractor that cut quarterly revenue, or if plant in the Philippines and Thailand rose sharply to absorb work from Penang without a matching fall in subcontracting.

References
  1. ReportedBesides its own sort and test sites in the Philippines and Thailand, it relies on outside contractors: the 10-K says it makes "extensive use of third-party subcontractors for the assembly and testing of our products".
    Analog Devices Form 10-K for fiscal 2025 (year ended 1 November 2025) - manufacturing, wafer sourcing, fabs and properties. — FY2025 · publ. 25 November 2025 · source ↗
  2. ReportedPlant in the Philippines was $433.0 million and in Thailand $263.9 million at the end of fiscal 2025.
    Analog Devices Form 10-K for fiscal 2025 (year ended 1 November 2025) - manufacturing, wafer sourcing, fabs and properties. — FY2025 · publ. 25 November 2025 · source ↗
  3. ReportedThe 10-K's list of factors that can move results includes "fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing, assembly and test capacity".
    Analog Devices Form 10-K for fiscal 2025 (year ended 1 November 2025) - manufacturing, wafer sourcing, fabs and properties. — FY2025 · publ. 25 November 2025 · source ↗
  4. ReportedThe company's forward-looking statements list "recently announced and future tariffs and other trade restrictions; changes in export classifications" among its risks.
    Analog Devices third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - revenue by end market, margins, EPS, cash flow, balance sheet and fourth-quarter guidance - highlights, income statement, adjusted measures and fourth-quarter guidance. — Q3 FY2026 · publ. 19 August 2026 · source ↗
Sources
Generated September 29, 2026