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Increase 5% Sequentially to $413 Million

The quarter's diluted earnings per share were $0.04 under generally accepted accounting principles (GAAP), with the difference between pro forma and GAAP results due to $17 million of amortization of intangibles and other acquisition-related expenses and a $27 million nonrecurring charge this quarter primarily related to the transfer of production from older four-inch wafer fabs to our modern six-inch and eight-inch fabs.

"Stronger bookings throughout the second quarter led to revenues increasing 5% sequentially to $413 million," said Jerald G. Fishman, President and CEO. "Revenues from analog and DSP products both grew 5% sequentially, with analog products accounting for 77% of the quarter's total revenues. Revenues from every end market grew sequentially. The strongest growth was in consumer, computer and wireless communications, all applications that touch consumers. Revenues from OEMs and distributors also both grew sequentially. We were pleased to see renewed growth in the OEM channel, which has been the weakest channel during the downturn.

"We are particularly encouraged by our new product performance. The sequential increase in revenues from products introduced within the last 18 months accounted for virtually all of the second quarter's revenue increase. We are not only introducing record numbers of new products, but these products are also being rapidly accepted and deployed by our customers.

"Orders during the second quarter grew in every region of the world, with the strongest growth occurring in Southeast Asia and Japan," Mr. Fishman continued. "Overall, orders requested by customers for delivery within the next 13 weeks rose 40% sequentially, while orders requested for delivery within the next 26 weeks increased by more than 50% sequentially. Overall, our book-to-bill ratio increased to over 1.2. As a result, we began the third quarter with a 13-week backlog totaling $270 million, up 40% from the starting backlog for the second quarter, giving us markedly-improved visibility into the third quarter."

Commenting on the quarter's financial performance, Mr. Fishman said, "Gross margin increased 150 basis points sequentially to 53.4% of sales as production volume increased. Our operating margin improved 220 basis points to 14.2% of sales.

"Our balance sheet remains strong," he noted. "Given the signs of business recovery, we have begun increasing production levels and inventories increased slightly. Our cash balance increased slightly and currently exceeds $2.9 billion. Capital expenditures for the quarter were $15 million. We anticipate maintaining capital expenditures at low levels for the next several quarters, given our still low levels of manufacturing utilization.

"This quarter we finalized our plans to transition, over the next several quarters, analog products currently manufactured in 4-inch wafer sizes to 6- and 8-inch wafer sizes. This plan will extend the life cycles of our 4-inch analog products, thereby ensuring long-term availability of these products to our customers. We believe that when completed, this plan will reduce manufacturing costs by approximately $60 million annually and provide additional gross margin improvement in our analog business."

Regarding the near-term outlook, Mr. Fishman said, "Our significantly strengthened order rate during the second quarter and a much higher beginning backlog have led us to plan for approximately 8% sequential revenue growth in the third quarter to $445 million. This will require approximately 40% from 'turns', i.e. orders booked and shipped within the same quarter, down from 53% turns business in the second quarter. Gross margin is expected to improve to an estimated 54.5%. Operating expenses are expected to increase in the third quarter, primarily due to the restoration of salaries, which had been reduced during the down cycle. Operating margin is planned to approach 16% of sales which would result in pro forma diluted earnings per share increasing to $0.15."

Taking a longer view, he concluded, "We believe that high-performance analog and DSP are likely to be the highest growth categories in the semiconductor market as signal processing technology drives the highest growth end markets. Throughout the last up and down cycle we continued to build our technology and product portfolio, significantly strengthened our organization, reduced infrastructure costs throughout the company and produced very respectable margins. We believe we have picked up market share during this cycle, and as the end markets turn up -- and there is increasing evidence that they are doing so -- we are well positioned to continue outgrowing the market. We also believe that we can generate strong operating margin leverage on increasing sales."

Safe harbor statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, including our statements regarding revenues, earnings and operating margins, that are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections about the industry and markets in which Analog Devices operates. The statements contained in this release are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important factors that may affect future operating results include the effects of adverse changes in overall economic conditions, the timing and duration of market upturns and downturns, the growth or contraction of the markets we serve, demand for semiconductors generally and for our products in particular, the risk that our backlog could decline significantly, our ability to hire engineers and other qualified employees needed to meet the expected demands of our largest customers, reversals or slowdowns in the markets or customers served by our products, the adverse effects of building inventories to meet planned growth that fails to materialize, the occurrence and frequency of inventory and lead-time reduction cycles, raw material availability, availability of both internal and external manufacturing capacity, technological and product development risks, competitors' actions and technological innovations and other risk factors described in our most recent annual report on Form 10-K and quarterly report on Form 10-Q.

Analog Devices is a leading manufacturer of precision high-performance integrated circuits used in analog and digital signal processing applications. The company is headquartered in Norwood, Massachusetts and employs approximately 8,800 people worldwide. It has manufacturing facilities in Massachusetts, California, North Carolina, Ireland, the Philippines, Taiwan and the United Kingdom. Analog Devices' stock is listed on the New York Stock Exchange and the company is included in the S&P 500 Index.

               Analog Devices Supplemental Information
                    Second Quarter, Fiscal 2002

                 Sales/Earnings Summary (GAAP Basis)
         (In thousands of dollars, except per-share amounts)


                                    2Q02            2Q01          1Q02
   Three Months Ended         May 4, 2002     May 5, 2001   Feb 2, 2002

  Net Sales                      $413,368        $601,442      $392,974
  Cost of Sales                   192,537         258,635       189,177
  Gross Margin                    220,831         342,807       203,797
  Percent of Sales                  53.4%           57.0%         51.9%
  Operating Expenses
  R&D                             102,821         124,821       104,709
  Amortization of Intangibles      14,234          13,996        14,105
  Nonrecurring Charges             27,250               -             -
  Selling, Marketing and G&A       62,354          77,563        58,358
  Operating Income                 14,172         126,427        26,625
  Other (Income) Expense          (5,864)        (20,745)       (7,667)
  Income Before Tax                20,036         147,172        34,292
  Provision for Taxes               5,610          44,676         9,602
  Net Income                      $14,426        $102,496       $24,690

  Shares for EPS - Basic          364,545         358,739       363,147
  Shares for EPS - Diluted        383,455         380,777       383,471

  Earnings per Share - Basic        $0.04           $0.29         $0.07
  Earnings per Share - Diluted      $0.04           $0.27         $0.06


   Six Months Ended           May 4, 2002     May 5, 2001

  Net Sales                      $806,342      $1,373,716
  Cost of Sales                   381,714         578,655
  Gross Margin                    424,628         795,061
  Percent of Sales                  52.7%           57.9%
  Operating Expenses
  R&D                             207,530         246,531
  Amortization of Intangibles      28,339          24,302
  In-process R&D Write-off              -           9,500
  Nonrecurring Charges             27,250               -
  Selling, Marketing and G&A      120,712         163,116
  Operating Income                 40,797         351,612
  Other (Income) Expense         (13,531)        (73,240)
  Income Before Tax                54,328         424,852
  Provision for Taxes              15,212         131,979
  Net Income                      $39,116        $292,873

  Shares for EPS - Basic          363,846         357,905
  Shares for EPS - Diluted        383,463         382,084

  Earnings per Share - Basic        $0.11           $0.82
  Earnings per Share - Diluted      $0.10           $0.77

      Quarter-to-Date and Year-to-Date GAAP-to-Pro Forma Adjustments
           (In thousands of dollars, except per-share amounts)

Management believes that pro forma financial information provides a more meaningful comparison of trends in quarterly and annual results. Pro forma income information is prepared by beginning with the Consolidated Statements of Income, which comply with U.S. generally accepted accounting principles (GAAP), and then excludes amortization of intangibles, acquisition-related expenses, nonrecurring charges and realized gains on investments. The provi- sion for taxes has been adjusted, as appropriate, to reflect the tax effect of these items.

                           Adjustments to GAAP

                                    2Q02            2Q01          1Q02
   Three Months Ended         May 4, 2002     May 5, 2001   Feb 2, 2002

  Net Sales                             -               -             -
  Cost of Sales                         -               -             -

  Gross Margin                          -               -             -
  Operating Expenses
  R&D                             (3,058)         (3,999)       (6,259)
  Amortization of Intangibles    (14,234)        (13,996)      (14,105)
  Nonrecurring Charges           (27,250)               -             -
  Selling, Marketing and G&A            -               -             -
  Operating Income                 44,542          17,995        20,364
  Other (Income) Expense                -             705             -
  Income Before Tax                44,542          17,290        20,364
  Provision for Taxes              10,534           3,018         4,062
  Net Income                       34,008          14,272        16,302
  Earnings per Share - Diluted      $0.09           $0.04         $0.05


   Six Months Ended           May 4, 2002     May 5, 2001

  Net Sales                             -               -
  Cost of Sales                         -               -
  Gross Margin                          -               -
  Operating Expenses
  R&D                             (9,317)         (3,999)
  Amortization of Intangibles    (28,339)        (24,302)
  In-process R&D Write-off              -         (9,500)
  Nonrecurring Charges           (27,250)               -
  Selling, Marketing and G&A            -               -
  Operating Income                 64,906          37,801
  Other (Income) Expense                -          28,085
  Income Before Tax                64,906           9,716
  Provision for Taxes              14,596         (4,334)
  Net Income                      $50,310          14,050
  Earnings per Share - Diluted      $0.14           $0.04


                     Pro Forma Financial Information

                                    2Q02            2Q01          1Q02
   Three Months Ended         May 4, 2002     May 5, 2001   Feb 2, 2002
  Net Sales                      $413,368        $601,442      $392,974
   Y/Y Growth                        -31%              4%          -49%
   Q/Q Growth                          5%            -22%           -7%
  Cost of Sales                   192,537         258,635       189,177
  Gross Margin                    220,831         342,807       203,797
  Percent of Sales                  53.4%           57.0%         51.9%
  Operating Expenses
  R&D                              99,763         120,822        98,450
  Amortization of Intangibles           -               -             -
  Nonrecurring Charges                  -               -             -
  Selling, Marketing and G&A       62,354          77,563        58,358
  Operating Income                 58,714         144,422        46,989
  Percent of Sales                  14.2%           24.0%         12.0%
  Other (Income) Expense          (5,864)        (20,040)       (7,667)
  Income Before Tax                64,578         164,462        54,656
  Provision for Taxes              16,144          47,694        13,664
  Tax Rate                            25%             29%           25%
  Net Income                      $48,434        $116,768       $40,992
  Percent of Sales                    12%             19%           10%
  Earnings per Share - Diluted      $0.13           $0.31         $0.11


   Six Months Ended           May 4, 2002     May 5, 2001
  Net Sales                      $806,342      $1,373,716
   Y/Y Growth                        -41%             28%
  Cost of Sales                   381,714         578,655
  Gross Margin                    424,628         795,061
  Percent of Sales                  52.7%           57.9%
  Operating Expenses

  R&D                             198,213         242,532
  Amortization of Intangibles           -               -
  Nonrecurring Charges                  -               -
  In-process R&D write-off              -               -
  Selling, Marketing and G&A      120,712         163,116
  Operating Income                105,703         389,413
  Percent of Sales                  13.1%           28.3%
  Other (Income) Expense         (13,531)        (45,155)
  Income Before Tax               119,234         434,568
  Provision for Taxes              29,808         127,645
  Tax Rate                            25%             29%
  Net Income                      $89,426        $306,923
  Percent of Sales                    11%             22%
  Earnings per Share - Diluted      $0.24           $0.81


             Selected Balance Sheet Information (GAAP Basis)
                        (In thousands of dollars)

                              May 4, 2002     May 5, 2001   Feb 2, 2002

  Cash & Short-term
   Investments
              $2,908,964      $2,509,546    $2,894,622
  Accts Receivable, Net           221,524         343,848       197,596
  Inventories                     253,151         318,834       241,107
  Other Current Assets            182,596         151,237       164,003
  Total Current Assets          3,566,235       3,323,465     3,497,328
  PP&E, Net                       845,683         938,209       876,840
  Investments                     275,516         223,006       259,774
  Intangible Assets               203,455         256,271       217,817
  Other                            61,877          56,555        63,639
  Total Assets                 $4,952,766      $4,797,506    $4,915,398

  Total Current Liabilities      $523,660        $657,013      $510,325
  Long-term Debt                1,191,199       1,200,421     1,197,458
  Non-Current Lease Obligations     2,592           8,905         3,786
  Non-Current Liabilities         326,367         281,925       320,765
  Stockholders' Equity          2,908,948       2,649,242     2,883,064
  Total Liabilities & Equity   $4,952,766      $4,797,506    $4,915,398


                  Depreciation and Capital Expenditures
                        (In thousands of dollars)

                                    2Q02            2Q01          1Q02
   Three Months Ended         May 4, 2002     May 5, 2001   Feb 2, 2002

  Depreciation                    $44,718         $38,213       $42,497
  Capital Expenditures            $15,679         $95,900       $11,519

   Six Months Ended           May 4, 2002     May 5, 2001
  Depreciation                    $87,215         $76,486
  Capital Expenditures            $27,198        $234,845

CONTACT: James O. Fishbeck, Director of Corporate Communications at Analog Devices, 781-461-3282, or james.fishbeck@analog.com