Last week Analog purchased Maxim as demand for analog chips increases amid the pandemic. The analog chips and other semiconductors are being used in ventilators and various work-from-home devices.

“The two companies make complementary products even though they both provide power management analog chips.  Maxim is strong in auto and data center chips, while  Analog has strength across industrial, healthcare and communications, the companies said in a release, calling that mix “highly complementary.”  They added that with respect to power management, Maxim has an applications-focused product set to complement Analog's set of broad market products,” Fierce Electronics reported.

As Wikipedia explains, “a linear integrated circuit or analog chip is a set of miniature electronic analog circuits formed on a single piece of semiconductor material”.

According to a financial analyst at Goldman Sachs, the purchase reflects the analog chip industry is “red hot”. Smart phones, laptops and networking devices use analog chips and they are experiencing an increase in demand as people work from home. They are also used in medical devices that have increased demand to meet the needs of the current pandemic treatments and research.

Microchip Technology has also seen an increase in demand from its customers for these components. Microchip reported in early June that sales and orders had increased as Asian production plants re-opened and US manufacturers have started to return to work.

“Microchip faced the challenge of weighing a very strong backlog against continued production disruptions at customers, and the prospect that some of that backlog was likely the result of excess orders. Thus far, the amount of push-outs and cancellations has been less than feared, resulting in the upside vs. guidance,” Raymond James analyst Chris Caso told Barron’s.

How the recent change to the preferential treatment given to Hong Kong will have on the chip industry has yet to be measured. Analog chips are used as translators to bridge the gaps into and out of the digital world, converting waveforms into digital data, then reassembling the data back into waveforms for it to be seen or heard.

Digital chips, in particular memory chips, have seen a decrease in pricing recently. This has not been the case, as of yet, in the analog chip market.

Last month, Microchip shares were up 12%. Among other chip stocks, Maxim Integrated Products (MXIM) was up 3.5%, Analog Devices (ADI) up 3.9%, Texas Instruments was up 3.8%, Broadcom (AVGO) up 3.5%, and Xilinx (XLNX) up 2.2%.

Since 2017 analog chips have been seen as one of the fastest growing chip segment, EE Times has reported.