Analog Devices intentionally held back roughly 20% of Industrial segment demand in late 2024 and was still under shipping 10% by May 2025, setting up pent-up orders. The company expects to meet full demand in Q3 fiscal 2025 and benefits from AI-driven, high-content test system wins.
Analog Devices deliberately under shipped its Industrial segment, estimating a 20% shortfall in late 2024 and maintaining a 10% under ship rate by the May 2025 fiscal call. This disciplined restraint aimed to keep channel inventories lean and build pent-up demand for a future cyclical upturn.
In the Q3 fiscal 2025 guidance, management signaled the end of undershipment, confirming the company will begin meeting full end-customer demand. This shift unleashes the accumulated backlog in its largest and most profitable segment, positioning ADI for revenue acceleration.
Beyond industrial recovery, ADI highlighted its leverage to the AI buildout, citing test systems with content values in the hundreds of thousands of dollars per unit. New power and optical solution victories in data centers add a secular growth engine atop the cyclical snapback.
