ALLEGRO MICROSYSTEMS, INC. (ALGM)

Allegro MicroSystems is a global designer, developer, fabless manufacturer and marketer of sensor integrated circuits and application-specific analog power ICs for automotive and industrial applications. The company says it is a leading supplier of magnetic sensor ICs worldwide by market share, driven by its leadership in the automotive market. Its stated mission is to be a global leader in semiconductor sensing and power solutions for motion control and energy-efficient systems. Its technology rests on Hall-effect and xMR magnetic sensors and on 100-volt capable Bipolar-CMOS-DMOS (BCD) wafer technology, combined with patented analog mixed-signal design and packaging know-how.

The portfolio includes more than 1,000 products. The sensor ICs measure motion, speed, position and current, including "lossless" and galvanically isolated current sensors. The power ICs include high-temperature and high-voltage motor drivers, power management ICs, LED driver ICs and isolated gate drivers. The September 2022 acquisition of Heyday Integrated Circuits added a technology that integrates an isolated DC-DC converter and an isolated gate driver in one chip, aimed at electric vehicle power conversion and at gallium nitride and silicon carbide platforms. The company ships over 1.5 billion units a year.

Allegro serves more than 10,000 customers worldwide. Its customers include virtually all of the top automotive companies, and it is a preferred vendor to tier-one automotive suppliers. Its target markets are e-Mobility (hybrid and electric vehicles and advanced driver assistance systems, or ADAS), traditional automotive applications such as internal combustion powertrains, safety, comfort and infotainment, and industrial markets. The industrial markets cover clean energy (solar, energy storage, EV charging and data centers), factory automation and a broad industrial segment that includes two-wheelers, heavy equipment and telecom. It also serves consumer and computer applications such as smart home devices and PCs. The company works with customers early, over multi-year design cycles, and supports them through design and application centers in North America, South America, Asia and Europe. Its sales, distribution, technical and quality support network spans the U.S., Europe and Asia. Product life cycles average 10 years or more.

Since 2016 Allegro has moved to a fabless, asset-lite manufacturing model. It sold its wafer fab, Polar Semiconductor, LLC (PSL), in March 2020 and closed its Thailand facility (AMTC) in March 2021. It now relies on external wafer foundries, including PSL, United Microelectronics Corporation and Taiwan Semiconductor Manufacturing Company. Its main internal assembly and test facility is in Manila, Philippines, supplemented by third-party assembly and second-source manufacturers. The company is certified under IATF 16949:2016. It describes the semiconductor market as highly competitive and says it competes against both larger established competitors and new entrants.