⚠ When Foundries Run ShortModerate threat

Analog Devices (ADI) — threat to the moat

ADI's quarterly revenue rose 66% in six quarters to a guided record, just when foundries serving every chipmaker are busiest.

The hybrid model is cheapest in a slump and hardest in a boom. ADI's quarterly revenue went from $2,423.2 million in the first quarter of fiscal 2025 to $4,021.9 million in the third quarter of fiscal 202612, and the fourth quarter is guided to "$4.3 billion, +/- $100 million"3. The chief financial officer said demand "continued to strengthen across our product portfolio and regions"4.

Analog Devices revenue by quarter ($M)2,423Q1 FY252,640Q2 FY252,880Q3 FY253,076Q4 FY253,160Q1 FY263,623Q2 FY264,022Q3 FY264,300Q4 FY26guideAnalog Devices quarterly results releases FY2025-FY2026; Q4 FY2026 guidance midpoint
Seven straight quarters of growth, and a record guided.

A foundry does not reserve capacity out of loyalty. The 10-K warns that foundries "often provide wafer foundry services to our competitors and therefore periods of increased industry demand may result in capacity constraints"5. When every chipmaker wants more wafers at once, a company that buys more than half of its supply competes for allocation with firms far larger in the foundry's order book.

So far ADI has kept up. The third quarter beat the top of its revenue range67, and gross margin rose rather than fell. The fiscal 2023 capacity build gave its own fabs room.

The risk is a missed quarter rather than a lost franchise. Designs are not lost when supply is short; orders are delayed, and customers learn to double-order, which feeds the next inventory correction.

If ADI misses the bottom of its revenue guidance in a quarter where it cites supply rather than demand, the foundry half of the model will have become a limit on growth.

References
  1. ReportedADI's quarterly revenue went from $2,423.2 million in the first quarter of fiscal 2025 to $4,021.9 million in the third quarter of fiscal 2026, and the fourth quarter is guided to "$4.3 billion, +/- $100 million".
    Analog Devices first-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - revenue by end market. — Q1 FY2026 · publ. 18 February 2026 · source ↗
  2. ReportedADI's quarterly revenue went from $2,423.2 million in the first quarter of fiscal 2025 to $4,021.9 million in the third quarter of fiscal 2026, and the fourth quarter is guided to "$4.3 billion, +/- $100 million".
    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 ↗
  3. ReportedADI's quarterly revenue went from $2,423.2 million in the first quarter of fiscal 2025 to $4,021.9 million in the third quarter of fiscal 2026, and the fourth quarter is guided to "$4.3 billion, +/- $100 million".
    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 ↗
  4. ReportedThe chief financial officer said demand "continued to strengthen across our product portfolio and regions".
    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 ↗
  5. ReportedThe 10-K warns that foundries "often provide wafer foundry services to our competitors and therefore periods of increased industry demand may result in capacity constraints".
    Analog Devices Form 10-K for fiscal 2025 (year ended 1 November 2025) - Item 1A risk factors: foundries, Taiwan, distributors, trade, state-backed competitors and variable consideration. — FY2025 · publ. 25 November 2025 · source ↗
  6. ReportedThe third quarter beat the top of its revenue range, and gross margin rose rather than fell.
    Analog Devices second-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - revenue by end market and third-quarter guidance. — Q2 FY2026 · publ. 20 May 2026 · source ↗
  7. ReportedThe third quarter beat the top of its revenue range, and gross margin rose rather than fell.
    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