Allegro Microsystems is like Infineon Technologies, but specialized in the magnetic sensors and motor control chips crucial for electric vehicles and industrial automation.

Allegro Microsystems is like a specialized Texas Instruments (TI), providing the 'brains' and 'senses' chips for electric motors and advanced automation systems.

• Magnetic Sensor ICs: These integrated circuits detect magnetic fields to measure position, speed, and current, crucial for automotive and industrial applications.
• Motor Driver ICs: These chips control and drive various types of electric motors, including BLDC, stepper, and brushed DC motors, found in automotive, industrial, and consumer electronics.
• Power Management ICs: These devices regulate and manage power distribution within electronic systems, including LED drivers and voltage regulators, for efficiency and reliability.

Allegro Microsystems (ALGM) sells primarily to other companies, making it a business-to-business (B2B) operation. As a global designer, developer, manufacturer, and marketer of sensor integrated circuits (ICs) and application-specific analog power ICs, Allegro's components are designed into a wide range of end products by other manufacturers. Due to the nature of component sales in the semiconductor industry, and as stated in their public filings, no single direct customer accounted for more than 10% of their net sales for recent fiscal years. Therefore, specific "major customer companies" by name are not typically disclosed in financial reports.

However, Allegro's major customers can be broadly categorized by the types of companies and industries that integrate Allegro's technology into their products. Allegro often engages in direct design-in relationships with these companies or reaches them through its network of global distributors.

Allegro's major customers fall into the following categories:

• Automotive Tier 1 Suppliers and Original Equipment Manufacturers (OEMs): These companies design and manufacture complex systems and modules for the automotive industry, including advanced driver-assistance systems (ADAS), electric vehicle (EV) powertrains, body and chassis controls, and infotainment systems. Allegro's sensors and power ICs are critical components in these applications.
  Examples of such companies whose products may incorporate Allegro's components:
  • Aptiv PLC (APTV)
  • Continental AG (CON.DE)
  • Magna International Inc. (MGA)
  • Bosch (private)
  • Denso Corporation (6902.T)
• Industrial Equipment Manufacturers: These companies incorporate Allegro's ICs into a broad array of industrial applications, including factory automation, robotics, data center power supplies, renewable energy (solar inverters, wind power), power tools, and building automation.
  Examples of such companies whose products may incorporate Allegro's components:
  • Siemens AG (SIE.DE)
  • Eaton Corporation plc (ETN)
  • ABB Ltd (ABBN.SW)
  • Schneider Electric SE (SU.PA)
• Global Electronics Distributors: Allegro also sells a significant portion of its products through global distributors, who then supply a vast network of smaller and medium-sized manufacturers across various industries. While these are direct customers of Allegro, they act as an intermediary for many end-users of Allegro's components.
  Examples of major distributors:
  • Arrow Electronics, Inc. (ARW)
  • Future Electronics Inc. (private)
  • TTI, Inc. (private, a subsidiary of Berkshire Hathaway Inc.)

Taiwan Semiconductor Manufacturing Company Limited (TSM)
United Microelectronics Corporation (UMC)
Amkor Technology, Inc. (AMKR)
ASE Technology Holding Co., Ltd. (ASX)

Michael Doogue, President and Chief Executive Officer

Michael Doogue was appointed President and Chief Executive Officer of Allegro MicroSystems in February 2025. He has a tenure of 27 years with Allegro MicroSystems, having held various leadership roles throughout his career at the company. Prior to his appointment as CEO, he served as Executive Vice President and the company's first Chief Technology Officer (CTO), leading technology development and worldwide operations. Mr. Doogue has been instrumental in shaping Allegro's technology and product strategies and holds 75 semiconductor-related U.S. patents.

Derek D'Antilio, Executive Vice President, Chief Financial Officer and Treasurer

Derek D'Antilio joined Allegro MicroSystems in January 2022, bringing with him over 20 years of financial and operating experience in semiconductor and high technology companies. Before joining Allegro, he served as Chief Financial Officer for a Summit Partners Portfolio Company, where he was involved in leading its sale and recapitalization. Mr. D'Antilio also previously served as Chief Financial Officer of IDEX Biometrics, a publicly traded global fabless semiconductor company, and played an instrumental role in its Nasdaq listing. His career also includes eight years at MKS Instruments, a global equipment and service provider, where he held various leadership roles including Vice President & Corporate Controller. Earlier in his career, he was a CPA in public accounting and an audit manager at PwC.

Rick Madormo, Senior Vice President, Worldwide Sales

Troy Coleman, Senior Vice President, General Manager, Products

Sharon Briansky, Senior Vice President, General Counsel

Key Risks to Allegro Microsystems (ALGM)

1. Cyclicality of End Markets: Allegro MicroSystems' business is highly dependent on the automotive (approximately 60% of revenue) and industrial/data center (approximately 20% of revenue) sectors, both of which are cyclical. Downturns or volatility in these markets can lead to significant revenue fluctuations, margin pressure, and negatively impact the company's valuation.
2. Intense Competition and Pricing Pressure: The semiconductor industry is intensely competitive, marked by rapid technological advancements and continuous declines in average selling prices. Allegro MicroSystems faces significant competition from larger industry players with greater financial and technical resources, which could lead to reduced market share and profitability.
3. Supply Chain Vulnerabilities and Geopolitical Risks: Allegro MicroSystems relies on a limited number of third-party wafer fabrication facilities and suppliers. Disruptions in the global supply chain, including export restrictions on critical materials or increased geopolitical tensions (particularly between the U.S. and China), could adversely affect production capabilities and financial performance.

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Allegro MicroSystems (ALGM) operates in several significant addressable markets for its sensor integrated circuits (ICs) and application-specific analog power ICs.

Allegro MicroSystems estimates its serviceable addressable market (SAM) to be approximately USD 15 billion globally through 2029, with more than half of this market driven by growth in electric vehicles (EVs), advanced driver-assistance systems (ADAS), and green technology.

Broken down by the broader product categories Allegro's solutions address:

• For **Automotive Sensors**, the global market size was valued at approximately USD 37 billion to USD 40.86 billion in 2023-2024. This market is projected to grow to a range of USD 51.6 billion to USD 86.16 billion by 2029-2032.
• For **Industrial Sensors**, the global market size was approximately USD 26.5 billion to USD 27.5 billion in 2024-2025. Projections show this market reaching USD 42.9 billion to USD 56.48 billion by 2030-2033.
• For **Power Management ICs (PMICs)**, the global market size stood at roughly USD 35.5 billion to USD 41.66 billion in 2024-2025, with forecasts indicating growth to between USD 59.1 billion and USD 79.11 billion by 2030-2034.

Allegro's products are primarily utilized in applications such as e-Mobility, ADAS, factory automation, data centers, and clean energy solutions, contributing to these broader market segments.

Allegro MicroSystems (ALGM) is poised for future revenue growth over the next 2-3 years, driven by several key factors in its target markets and product innovations.

Here are the expected drivers of future revenue growth:

1. E-Mobility Growth and Increased Automotive Content: Allegro MicroSystems is experiencing strong momentum in the e-Mobility sector, which includes electric vehicles (EVs) and hybrid vehicles. The company's solutions, such as magnetic sensors and power ICs, are critical components in these vehicles. Allegro's CEO noted an increased dollar content opportunity in XEVs (hybrid and electric vehicles) compared to internal combustion engine cars, with content per XEV targeting $100, up from approximately $40 in an internal combustion engine car. This expanded content opportunity, coupled with the ongoing electrification of the automotive industry, is a significant driver. Sales to automotive customers increased by 12% year-over-year in Q2 FY26, with e-Mobility solutions specifically growing by 21%.
2. Expansion in Data Center and Robotics Applications: The company is strategically expanding its footprint in high-growth industrial applications, particularly within data centers and robotics. Allegro has seen continued strong performance in the data center market, and their products are becoming increasingly important in AI server applications, with a reported data center content opportunity increasing to $425 per AI server. This segment contributed to a 23% year-over-year growth in industrial and other sales in Q2 FY26.
3. New Product Innovation, particularly TMR Sensors: Allegro MicroSystems is focused on innovation, with new product introductions serving as a growth catalyst. A notable example is the launch of the industry's first production-ready 10 MHz TMR (Tunneling Magnetoresistance) current sensor. These advanced sensors are crucial for optimal protection and control of wide bandgap power electronics, addressing emerging needs in its key markets and offering new revenue streams.
4. Automotive ADAS and Safety Features: Beyond e-Mobility, Allegro's sensing and power management solutions are integral to advanced driver-assistance systems (ADAS) and other automotive safety features. The increasing adoption of ADAS and the continuous demand for enhanced safety in vehicles worldwide contribute to the growth of Allegro's automotive sensor business.

Share Repurchases

• Allegro MicroSystems completed a repurchase of 39 million shares from Sanken Electric in July 2024 for approximately $903.24 million, at $23.16 per share.
• This transaction reduced Sanken Electric's ownership in Allegro MicroSystems from approximately 50.8% to 32.5%.
• The company anticipates a reduction in the diluted share count to approximately 184 million shares in fiscal Q3 2025.

Share Issuance

• Allegro MicroSystems completed its Initial Public Offering (IPO) on November 2, 2020, issuing 28,750,000 shares at $14.00 per share and generating approximately $320.8 million in net proceeds.
• In July 2024, approximately 29 million shares were issued, raising $666 million in net proceeds, which financed the first portion of the share repurchase from Sanken Electric.
• Shares outstanding declined by 3.58% in 2025 to 0.188 billion, following increases of 0.51% in 2024 and 0.98% in 2023.

Inbound Investments

• The company's IPO in November 2020 raised approximately $320.8 million, serving as a significant inbound investment for debt repayment and general corporate purposes.

Outbound Investments

• In August 2023, Allegro MicroSystems agreed to acquire Crocus Technology for $420 million in cash; this acquisition was completed by the end of calendar year 2023.
• The acquisition of Crocus Technology aimed to accelerate innovation in Tunnel Magnetoresistance (TMR) sensing technology.
• This strategic investment sought to strengthen Allegro's position in the magnetic sensing market, particularly for high-growth applications in e-Mobility, Clean Energy, and Automation.

Capital Expenditures

• Capital expenditures were $39.96 million in fiscal year 2025, $124.77 million in fiscal year 2024, and $79.78 million in fiscal year 2023.
• The primary focus of capital expenditures includes strategic investments in power and sensor integrated circuits (ICs).
• Investments also targeted improvements in proprietary manufacturing and test yield, specifically for TMR sensor ICs.