Analog Devices (ADI) announced its 'vision and business strategy' for the next 50 years to mark its 50th anniversary.

At the event, Vincent Roche, President and CEO of Analog Devices, introduced Analog Devices’ innovative technology and business achievements over the past 50 years, as well as the vision for the next 50 years, the direction of new solutions, and business strategies.

Analog Devices currently holds the highest market share in the global converter and high-performance amplifier market.

Analog Devices Korea is also showing rapid growth in the domestic automotive market, achieving remarkable growth in the telecommunications equipment components market, and focusing on developing customized products for customers in the consumer goods market, such as smartphones and TVs.

Analog Devices plans to accelerate innovation across the industrial, telecommunications infrastructure, automotive, industrial instrumentation, aerospace, and defense sectors in the future.

CEO Vincent Roach put forward “Ahead of What's Possible” as the branding slogan to lead the next 50 years, stating, “We will strengthen our position in the analog-digital market and lay the foundation for the realization of the Internet of Things based on continuous innovation,” and Analog Devices, such as Analog Garage and FIRST Robotics supportIt emphasized the entrepreneurial spirit.

The following is the content of Mr. Vincent Roach's announcement at the media roundtable.

I am not sure how much you know about Analog Devices (ADI), but I would like to briefly talk about ADI’s journey over the past 50 years as one of the semiconductor companies that has established a leading position in the industry, and the next 50 years, which I believe will continue to see great prosperity.

We have reflected on the factors behind our success over the past 50 years—specifically, what the core reasons were. Let us examine this together.

4 Success Factors of ADI

1. Gained competitiveness by transitioning to the semiconductor business

The first fundamental reason is that we have undergone numerous transformations in the semiconductor field. In fact, ADI was founded in 1965 as a module manufacturer and did not engage in the semiconductor business from the beginning. The first transformation came when we realized that the path forward for ADI was semiconductors, not modules. To maintain competitiveness over the long term, we must be able to detect, acquire, and adapt to changes in the market and technology faster than our competitors. That is the first major factor that brought about ADI's success.

2. Upholding Core Values

The second key factor is that we have upheld a very consistent set of core values. These core values have guided ADI for a very long time. The fundamental concept is that innovation leads to business success, and that we must demonstrate excellence in everything we do, from product development and production to design management, quality control, and customer interaction. We are also passionate about our customers' success. I will explain this further when discussing our new branding. We also place great emphasis on the learning and development of our employees.

3. Risk-taking adventurous spirit

The third point is that we are very tolerant of taking risks at the forefront of the business and bringing a wave of new technology to the market.

4. Business and financial management from a long-term perspective

Fourth, we manage our financial position with a very long-term perspective and mindset. We invest with a long-term view and manage our cash and business from a long-term perspective. When ADI went public a long time ago, its revenue was $6 million and its market value was $4 million, but recent revenue performance has reached $3 billion and its market value has reached $19 billion.

WHAT WE DO

“We enable our customers to interpret the world around us by intelligently bridging the physical and digital with unmatched technologies that sense, measure and connect.”

This content is basically about what ADI does as a company. As a member of the semiconductor industry, we provide breakthroughs in customers' products and systems by bringing innovation to silicon. Our technology fundamentally senses, measures, and interprets, connecting the real world to the cloud and digital realms. We pursue the cutting edge, and this is what we offer our customers. We provide solutions to problems that others have not yet solved.

We provide a competitive advantage in fields where high-performance analog is important. The reason I am becoming increasingly optimistic about ADI's future is that the markets we operate in are increasingly in need of our technology.

Customer demands are also changing. In the past, customers would select and integrate individual products. However, they now require our assistance to implement more complete solutions and launch innovative products into market more easily and quickly. While our technology contributes behind the scenes of global IT, it enables our clients to step into the center of the market.

Over the past 50 years, we have developed two key components of the analog field. High-performance converters and high-performance amplifiers are required to bridge the gap between the real world and the world of digital signals. As you can see in this chart, we have established a very strong leadership position in this field.

ADI consistently maintains leadership in the converter and high-performance amplifier markets.

We have also achieved numerous firsts. We developed the first silicon accelerometer a very long time ago and have also introduced numerous first products in the data converter sector.

Beyond simply showcasing outstanding technology and products, ADI has also been known over the years as an educator and knowledge developer in the analog field. This is just one aspect of what we are doing to fulfill our role as a leading educator in the analog sector. As an example, the following is a magazine we call Analog Dialogue, which covers technologies, products, and applications in the analog business.

ADI's Analog Dialogue magazine

This is ADI’s branding: “Ahead of What's Possible.” As I mentioned earlier, we have given much thought to what led us to success in the past and what will drive our future success. I would like to talk about that briefly.

This is exactly what ADI pursues, and we tell our engineers to think about what they need to do for their customers as a company. This is essentially the core brand that ADI pursues. Above all, our engineers strive not only to achieve outstanding innovation but also to ensure that this innovation is truly meaningful to our customers. ADI harbors a tremendous passion for developing meaningful technology.

We always think of our customers. The phrase "customer first" may sound cliché, but a key aspect of achieving customer success is challenging each other. By actively involving customers from the early stages, we aim to enable us to innovate together more and more in the future.

We are transforming ourselves to increase the impact of our company's innovations and to meet the changing needs of our customers. We are focusing not only on changes related to products and technologies, but also on understanding what these technologies mean for end markets, how these markets are evolving, and how the significance of our technology will enhance our products across the market in the future.

As mentioned earlier, our customers are demanding an increasing number of products and want us to provide more complete solutions. It is ADI's consistent belief that to effectively achieve this, we must learn system engineering in greater depth. That is the path we have taken, complementing our strengths and technology with better strategies in the market and systems sectors.

To better align our solutions with customer needs, we have established a mechanism within ADI to integrate all our resources in a more systematic and solution-oriented manner by adding highly open software and algorithms to our products.

Furthermore, we are advancing the engineering community in terms of a range of technologies and capabilities, while taking on significant risks as a company. I believe that taking risks is the very measure of how great the innovation within a company is.

For example, we work in the field of mission-critical production automation systems. We are also collaborating with global aerospace giants to transform the way astronauts obtain information through helmet-mounted display systems. In the field of communications infrastructure, every part of all wireless networks worldwide passes through ADI's wireless systems.

In addition, ADI's MEMS technology enabled the development of the first automatically operating airbag system. Through inertial MEMS technology, we were able to develop the first electrically detonating airbag system for automotive use, which is truly innovative. We anticipate that our technology will enable the saving of over 600 million gallons of gasoline in today's internal combustion engine automotive systems through precise monitoring and control.

Furthermore, we are developing mission-critical applications in fields such as first-response technology, where functionality is essential. ADI is also applying communication technology to vehicles to enable efficient audio and video viewing inside the vehicle, while providing comfort and promoting vehicle body weight reduction by decreasing cable weight.

At least one of our major Korean corporate clients is showing great interest in vital sign monitoring technology, and by developing optical, non-invasive biosignal monitoring technology, we are enabling the monitoring of patient conditions using electronic equipment.

We move swiftly and boldly to solve our customers' large and complex problems. We also ensure continuous adaptation by responding very sensitively to signals from the market and technology.

Next is Analog Garage, an incubator that helps spark the wave of the future by allowing us to explore various ideas in the cutting-edge fields of our business, markets, and technology.

Analog Garage, the birthplace of ADI's experimental spirit

We call the top 1 percent of the ADI engineering community Fellows. Although they are relatively few in number, their role is to think about the next wave of technology and educate our engineering community to extremely high standards.

Recently, we hosted the General Technology Conference, attended by over 2,000 engineers seeking to improve their work by sharing, learning, and understanding contexts within and outside ADI.

Let me also talk a little about the future. As mentioned earlier, the value system we developed in the past will have a significant connection with the future. Our culture is constantly adapting to the new reality, and we are discussing our mindset and investment in the market, as well as the ability to organize technology and the need to introduce systematic thinking into the company.

The following chart shows what we call the three waves of Information and Communication Technology (ICT).

The third wave in the field of Information and Communication Technology (ICT) is ubiquitous sensing

When I first joined ADI, our largest customers were in the mainframe computing and aerospace and defense sectors. We refer to the late 1980s and early 1990s as the era of the 'Big Iron' (mainframes); it was during this time that the digital mobile communications market began to emerge, and personal computing, high mobility, and the Internet also began to appear.

Looking at the three stages of ICT, the semiconductor, software, services, and systems markets are showing very rapid growth in all aspects. Among these, ubiquitous sensing, the third wave, is the sector that will drive the growth of the semiconductor industry for a long time to come.

Big data and cloud computing, which are receiving much attention today, are already deeply integrated into our daily lives. However, in order for these technologies, services, and capabilities to drive global IT, the volume of sensors sensing the real world will show a tremendous increase. For example, our customers in the industrial automation sector are requesting assistance in finding ways to manufacture intelligent machines that understand their own operational capabilities, and in helping factory owners better understand their equipment so that it can function properly.

Technology is the only way to address the growing need for real-time monitoring of diagnoses and medical data in the medical sector. Therefore, we are pushing the limits of technology to achieve high reliability and performance, enabling, for example, the monitoring of vital signs not only in clinical settings but ultimately at home.

Our automotive customers require the implementation of greater electrification, automation, and connectivity in their vehicles. Our technologies will become critical for detecting all situations occurring within the vehicle's powertrain, fuel system, and engine. Furthermore, this information will be reliably connected and transmitted to cloud systems. Therefore, we will continue to play a significant role in this market segment.

In telecommunications infrastructure as well, we are playing an important role in a wide variety of fields, such as building complete capabilities to provide full wireless subsystems to infrastructure providers for 4G and 5G networks.

CEO Vincent Roach emphasized that while IoT and big data have been established over the past few years, a focus on ubiquitous sensing is necessary for these data and cloud technologies to be effectively implemented. “Everyone talks about IoT, but the underlying technologies are ones that ADI has been developing for years, and many of [ADI's] businesses are deeply related to IoT.” "Even now, our clients and their clients are investing heavily in this area, and I believe it is important to connect this information to infrastructure, the cloud, and big data." It is said that the sensor division currently accounts for 10–12% of ADI's revenue.

He also stated that in the medical field, the company will focus on implementing high-tech capabilities at the level of medical devices that measure various human conditions with high reliability, such as non-invasive vital sign monitoring and heart rate monitoring, and that it is also considering technology to measure blood pressure using optical technology. He added that while these efforts are currently centered on wearable devices, the company is considering partnerships with large medical institutions and pharmaceutical companies in the future. Through these efforts, he predicted that “ADI will be able to achieve sustainable growth at a level two to three times the global GDP.”

Finally, Howard Cheng, Vice President of Sales and Marketing for the Asia-Pacific region at Analog Devices, summarized the company's direction in one sentence: "While ADI initially focused on information capabilities, it is now moving into the fields of knowledge and wisdom."

The following is part of the Q&A with CEO Vincent Roach that followed the presentation.

Q&A

e4ds: You mentioned big data extensively and emphasized sensors. You also highlighted software as well as hardware; are you considering big data processing technologies for the future?

Vincent Roach : We are exploring ways to generate added value for our customers and additional revenue for ADI. As part of this effort, we are collaborating with big data firms, cloud providers, and infrastructure providers to research ways to equip machines with higher intelligence. Machine learning will also become a very promising field.

e4ds: Are machine learning applications not only in industrial settings but also in fields like the automotive industry you mentioned earlier?

Vincent Roach: Technology is the answer to everything. If past electronic technology struggled to figure out what was happening in the present, future devices will be able to not only figure out what is happening now but also infer and predict what might happen in the future by looking into data patterns.

This trend has already begun, with the medical field serving as a prime example. The first to catch the eye are simple products, such as wrist-worn vital sign monitors, which are already being sold. As massive amounts of data are collected through these devices, new methods will emerge to utilize this data to generate a wider range of services and increase revenue.

As another example, ADI collaborates with some of the world's leading engine manufacturers in the aerospace sector to enable them to utilize more powerful sensing capabilities and improve efficiency, safety, and reliability. Through this, these companies will have the potential to measure every aspect of engine operation and, using the massive amount of data collected, predict not only current situations but also the future state of the engine.

e4ds: You mentioned 'applied imagination' as one of ADI's core tenets. Could you provide examples of 'applied imagination' within ADI's business areas, and what kinds of risks might be involved?

Vincent Roach: What we consider 'applied imagination' basically refers to the creation of a new way of thinking that handles existing and new technologies in a more application-centric manner. I mentioned risk to mean that innovation requires taking on numerous risks.

The best way to manage risk is to take action, learn, adapt, change, and make mistakes. We learn and grow from our mistakes. That is the meaning of the risk I referred to. Taking risks in business is the very path to innovation. If there are areas where risk should not be taken, they would be sectors such as financial management, supply chain management, and quality control. These sectors must be carefully considered, and a proper balance of risk must be struck among them.

e4ds: Does ADI have any unique techniques to handle such risks?

Vincent Roach: We have a learning organization, and through it, we are constantly learning. Taking risks happens every day in every area of our business. However, we are not afraid to make mistakes. We all make mistakes, and we learn from them. Everyone at ADI is always striving to learn from their mistakes. The General Technology Conference, which ADI hosts annually and brings together over 2,000 engineers, is one example of such efforts.

e4ds: Thank you for your words.