US to Drive 5G Growth 'More Globally Beyond China' in 2021, Says ADI CEO
Analog Devices CEO Vincent Roche thinks 5G is “at the early stages of a multiyear -- probably decade -- ramp” up, he told a Tuesday investor call for fiscal Q4, ended Oct. 31. He thinks 2021 will bring deployments of 5G “more globally beyond China,” he said. “I expect America to be the primary driver, probably toward the second half of 2021.”
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Roche predicts 5G deployments for consumer applications to “continue rapidly over the next three years,” he said. “I’m also beginning to see now the early stages of 5G into more deterministically critical applications,” like healthcare and factory automation, he said.
ADI considers itself the communications “market leader” in 5G, said Roche. The company expects significant growth “as 5G broadens globally in 2021 and beyond,” he said. It views open radio access networks as a “disruptive technology” for 5G deployments, he said. ORAN “enables carriers to scale and upgrade their networks quickly and economically,” he said: That’s “an important step to help proliferate 5G into new markets.”
For the wireless “franchise,” ORAN opens up “new avenues for growth,” said Roche. “We’re further innovating our transceiver and power portfolios.” ADI is forming “strategic partnerships” with “ecosystem participants” such as Intel and Marvell, he said. Last quarter, ADI began working with NEC “to enable the first ORAN installation” for Rakuten Mobile in Japan, he said.
ADI’s consumer segment “has had its fair share of challenges over the last few years,” said Roche. “We believe the business has bottomed in 2020.” Recent design wins for hearables, wearables and high-end audio and video solutions put the segment on “a multiyear growth trajectory,” he said.
Industries are “prioritizing digitalization and connectivity more than ever” during COVID-19, said Roche. “It’s semiconductors that are enabling the current virtual economy.” Q4 revenue rose 6% from a year earlier but fell 6.5% for the fiscal 12 months, partly due to “the economic volatility and supply chain disruptions,” said Roche.
The communications sector generated 25% of Q4 revenue, said Chief Financial Officer Prashanth Mahendra-Rajah. Revenue there fell 14% sequentially but gained 19% year over year, with double-digit growth in wireless and wireline, he said. The consumer segment generated 11% of Q4 revenue, finishing 12% higher sequentially but down 17% year over year, he said: “We’re positioned to grow in '21 and beyond after three years of declines.”