The following discussion and analysis should be read in conjunction with our
Consolidated Financial Statements and notes thereto included in Part IV,
Item 15(a), the risk factors included in Part I, Item 1A, and the
"forward-looking statements" and other risks described herein and elsewhere in
this Annual Report.

The ADI Merger

The completion of the ADI Merger under the ADI Merger Agreement is subject to
customary closing conditions, including, among others, the approval of Maxim
Integrated's stockholders, and the approval of Analog Devices' shareholders,
which were obtained on October 8, 2020, and the receipt of various regulatory
approvals. Subject to the satisfaction or (to the extent permissible) waiver of
such conditions, the ADI Merger is expected to close in the summer of 2021. On
July 12, 2021, the outside date following which the ADI Merger Agreement may be
terminated (subject to certain limitations) was automatically extended from July
12, 2021 to October 12, 2021 due to pendency of certain required regulatory
approvals. For additional information on the ADI Merger Agreement and the ADI
Merger, please refer to the Company's Current Report on Form 8-K, filed with the
SEC on July 13, 2020. The Company cannot guarantee that the ADI Merger will be
completed on a timely basis or at all or that, if completed, it will be
completed on the terms set forth in the ADI Merger Agreement.

Overview

We are a global company with manufacturing facilities in the United States, the
Philippines and Thailand, and sales offices and design centers throughout the
world. We design, develop, manufacture and market linear and mixed-signal
integrated circuits, commonly referred to as analog circuits, for a large number
of customers in diverse geographical locations. The analog market is fragmented
and characterized by diverse applications, a great number of product variations
and, with respect to many circuit types, relatively long product life cycles.
The major end-markets in which we sell our products are the automotive,
communications and data center, consumer, and industrial markets. We are
incorporated in the State of Delaware.

Critical accounting policies

The methods, estimates and judgments we use in applying our most critical
accounting policies have a significant impact on the results we report in our
financial statements. The Securities and Exchange Commission ("SEC") has defined
the most critical accounting policies as the ones that are most important to the
presentation of our financial condition and results of operations, and that
require us to make our most difficult and subjective accounting judgments, often
as a result of the need to make estimates of matters that are inherently
uncertain. Based on this definition, our most critical accounting policies
include valuation of inventories, accounting for income taxes, and assessment of
litigation and contingencies. These policies and the estimates and judgments
involved are discussed further below. We have other significant accounting
policies that either do not generally require estimates and judgments that are
as difficult or subjective, or it is less likely that such accounting policies
would have a material impact on our reported results of operations for a given
period. Our significant accounting policies are described in Note 2 to the
Consolidated Financial Statements included in this Annual Report.

Inventories

Inventories are stated at the lower of (i) standard cost, which approximates
actual cost on a first-in-first-out basis, or (ii) net realizable value. Our
standard cost revision policy is to monitor manufacturing variances and revise
standard costs on a periodic basis. At each reporting period, we assess our
ending inventories for excess quantities and obsolescence based on our projected
sales outlook. This assessment includes analysis of projections of future
demand. Because of the cyclical nature of the market, inventory levels,
obsolescence of technology, and product life cycles, we generally write-down
inventories to net realizable value based on this forecasted product demand
analysis. Actual demand and market conditions may be lower than those projected
by us. This difference could have a material adverse effect on our gross margin
should inventory write-downs beyond those initially recorded become necessary.
Alternatively, should actual demand and market conditions be more favorable than
those estimated by us, gross margin could be favorably impacted as we release
these reserves upon the ultimate product shipment. During fiscal years 2021 and
2020, we had net inventory write-downs of $14.3 million and $16.5 million,
respectively.

Accounting for income taxes

We must make certain estimates and judgments in the calculation of income tax
expense, determination of uncertain tax positions, and in the determination of
whether deferred tax assets are more likely than not to be realized. The
calculation of our
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Income tax expense and tax liabilities involve dealing with uncertainties in the application of complex tax laws and regulations.

ASC No. 740-10, Income Taxes ("ASC 740-10"), prescribes a recognition threshold
and measurement framework for financial statement reporting and disclosure of
tax positions taken or expected to be taken on a tax return. Under ASC 740-10, a
tax position is recognized in the financial statements when it is more likely
than not, based on the technical merits, that the position will be sustained
upon examination, including resolution of any related appeals or litigation
processes. A tax position that meets the recognition threshold is then measured
to determine the largest amount of the benefit that has a greater than 50%
likelihood of being realized upon settlement. Although we believe that our
computation of tax benefits to be recognized and realized are reasonable, no
assurance can be given that the final outcome will not be different from what
was reflected in our income tax provisions and accruals. Such differences could
have a material impact on our net income and operating results in the period in
which such determination is made. See Note 17: "Income Taxes" in the Notes to
Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual
Report for further information related to ASC 740-10.

We evaluate our deferred tax asset balance and record a valuation allowance to
reduce the net deferred tax assets to the amount that is more likely than not to
be realized. In the event it is determined that the deferred tax assets to be
realized in the future would be in excess of the net recorded amount, an
adjustment to the deferred tax asset valuation allowance would be recorded. This
adjustment would increase income in the period such determination was made.
Likewise, should it be determined that all or part of the net deferred tax asset
would not be realized in the future, an adjustment to increase the deferred tax
asset valuation allowance would be charged to income in the period such
determination is made. In assessing the need for a valuation allowance,
historical levels of income, expectations and risks associated with estimates of
future taxable income and ongoing prudent and practicable tax planning
strategies are considered. Realization of our deferred tax asset is dependent
primarily upon future taxable income in the U.S. and certain foreign
jurisdictions. Our judgments regarding future profitability may change due to
future market conditions, changes in U.S. or international tax laws and other
factors. These changes, if any, may require material adjustments to the net
deferred tax asset and an accompanying reduction or increase in net income in
the period in which such determinations are made.

Litigation and contingencies

From time to time, we receive notices that our products or manufacturing
processes may be infringing the patent or other intellectual property rights of
others, notices of stockholder litigation or other lawsuits or claims against
us. We periodically assess each matter in order to determine if a contingent
liability in accordance with ASC No. 450, Contingencies ("ASC 450"), should be
recorded. In making this determination, management may, depending on the nature
of the matter, consult with internal and external legal counsel and technical
experts. We expense legal fees associated with consultations and defense of
lawsuits as incurred. Based on the information obtained, combined with
management's judgment regarding all of the facts and circumstances of each
matter, we determine whether a contingent loss is probable and whether the
amount of such loss can be estimated. Should a loss be probable and estimable,
we record a contingent loss. In determining the amount of a contingent loss, we
take into consideration advice received from experts in the specific matter, the
current status of legal proceedings, settlement negotiations which may be
ongoing, prior case history and other factors. Should the judgments and
estimates made by management be incorrect, we may need to record additional
contingent losses that could materially adversely impact our results of
operations. Alternatively, if the judgments and estimates made by management are
incorrect and a particular contingent loss does not occur, the contingent loss
recorded would be reversed, thereby favorably impacting our results of
operations.

Impact of COVID-19 on Our Business
The ongoing COVID-19 pandemic has impacted and will continue to impact the
Company's operations, employees, customers, and suppliers, due to
shelter-in-place orders, mandated quarantines, reduced facility operations, and
travel bans and restrictions. While the operating results for the first quarter
of fiscal year 2022 and thereafter may be impacted by COVID-19, the extent and
form of such impact to our business is uncertain and cannot be estimated with
any degree of certainty.
Employee Health and Safety
During the second half of fiscal year 2020 and the full fiscal year 2021, the
Company's facilities and offices were either operating at reduced capacity or
temporarily closed for non-essential operations. In an effort to protect the
health and safety of our employees, we implemented safety measures such as
work-from-home practices, travel restrictions, extensive cleaning protocols, and
social distancing when engaging in essential activities.

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Focus on Customers
We continue to work with our sales, supplier, and customer design and
engineering teams to meet current demand. Teams meet remotely, through
telephonic or video conferences and by leveraging available technology, to
continue the design and engineering process that would normally take place at
physical customer locations.
Manufacturing and Operations
We will continue to actively monitor this evolving situation and implement
changes to protect employee health. In addition to our actions, we will continue
to implement government-placed orders in all our locations. While COVID-19
related disruptions have impacted our manufacturing operations, we continue to
leverage our manufacturing flexibility to reduce the negative effects of such
disruptions.
For a further discussion of the uncertainties and business risks associated with
the COVID-19 pandemic, see Part I, Item 1A - Risk Factors of this Annual Report.
Results of Operations
The following table sets forth certain Consolidated Statements of Income data
expressed as a percentage of net revenues for the periods indicated:
                                                             For the Year Ended
                                                    June 26,          June 27,      June 29,
                                                      2021              2020          2019
    Net revenues                                         100.0  %      100.0  %      100.0  %
    Cost of goods sold                                    33.1  %       34.6  %       35.2  %
    Gross margin                                          66.9  %       65.4  %       64.8  %
    Operating expenses:
    Research and development                              17.3  %       20.1  %       18.8  %
    Selling, general and administrative                   12.2  %       

13.5% 13.3%

    Intangible asset amortization                          0.1  %        

0.1% 0.1%

    Impairment of long-lived assets                          -  %          -  %            -%

    Severance and restructuring expenses                   0.5  %        

0.2% 0.2%

    Other operating expenses (income), net                 0.9  %          -  %            -%
    Total operating expenses                              30.9  %       

34.1% 32.6%

    Operating income                                      35.9  %       

31.3% 32.3%

    Interest and other income (expense), net              (0.6) %       

(0.4)% 0.3%

    Income before taxes                                   35.3  %       

30.9% 32.6%

    Provision (benefit) for income taxes                   3.9  %        1.1  %       (3.2) %
    Net income                                            31.4  %       29.9  %       35.8  %


The following table presents the pre-tax stock-based compensation included in the items of the consolidated statements of earnings presented above as a percentage of net income for the periods indicated:

                                                          For the Year Ended
                                                 June 26,          June 27,      June 29,
                                                   2021              2020          2019
      Cost of goods sold                                0.5  %        0.6  %        0.4  %
      Research and development                          1.7  %        2.0  %        1.8  %
      Selling, general and administrative               1.8  %        1.8  %        1.5  %
                                                        4.0  %        4.4  %        3.7  %



A review of our fiscal year 2021 performance compared to fiscal year 2020
performance appears below. A review of our fiscal year 2020 performance compared
to fiscal year 2019 performance is set forth in Part II, Item 7 of the Form 10-K
for the fiscal year ended June 27, 2020 under the caption "Results of
Operations".

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Net income

We reported net revenues of $2.6 billion and $2.2 billion in fiscal years 2021
and 2020, respectively. Our net revenues in fiscal year 2021 increased by 20%
compared to our net revenues in fiscal year 2020.

Revenue from consumer products was up 21% due to higher demand in cell phone and
handheld computer products. Revenue from industrial products was up 22% due to
higher demand in control and automation, automatic test equipment, and medical
products. Revenue from automotive products was up 38% due to higher demand in
auto infotainment, safety and security, and powertrain products. The Company has
updated the year ended June 27, 2020 market revenue to conform to the current
period presentation of Major End-Market estimates, due to a change in product
classification.

Approximately 90% and 89% of our net revenues in fiscal years 2021 and 2020,
respectively, were derived from shipments to customers located outside the
United States, primarily in Asia and Europe. Less than 1% of our sales are
denominated in currencies other than U.S. dollars. The impact of changes in
foreign exchange rates on net revenues and our results of operations for fiscal
years 2021 and 2020 were immaterial.

Gross margin

Our gross margin as a percentage of net revenue was 66.9% in fiscal year 2021
compared to 65.4% in fiscal year 2020. Gross margins as a percentage of net
revenue in fiscal year 2021 compared to fiscal year 2020 was higher primarily
due to higher revenues, increased factory utilization and lower inventory
reserves.

Research and development

Research and development expenses were $454.3 million and $440.2 million for
fiscal years 2021 and 2020, respectively, which represented 17.3% and 20.1% of
net revenues, respectively. The $14.1 million increase in research and
development expenses was primarily due to higher salaries and other personnel
related costs, partially offset by lower travel expenses.

The level of research and development expenditures as a percentage of net
revenues will vary from period to period depending, in part, on the level of net
revenues and on our success in recruiting the technical personnel needed for our
new product introductions and process development. We view research and
development expenditures as critical to maintaining a high level of new product
introductions, which in turn are critical to our plans for future growth.

Selling, general and administrative expenses

Selling, general and administrative expenses were $320.7 million and $296.7
million in fiscal years 2021 and 2020, respectively, which represented 12.2% and
13.5% of net revenues, respectively. The $24.0 million increase in selling,
general and administrative expenses was primarily due to higher salaries and
other personnel costs, including stock-based compensation for accelerated
vesting of certain restricted stock awards and restricted stock units.

The level of selling, general and administrative expenditures as a percentage of
net revenues will vary from period to period, depending on the level of net
revenues and our success in recruiting sales and administrative personnel needed
to support our operations.

Severance and restructuring

Severance and restructuring expenses were $13.4 million and $5.4 million in
fiscal years 2021 and 2020, respectively, which represented 0.5% and 0.2% of net
revenues for each respective period. The $8.0 million increase was due to
increased restructuring activities which, as a result of the pending ADI Merger,
now include change in control related benefits.

Other net operating expenses (income)

Other operating expenses (income), net were $22.6 million and $0.9 million in
fiscal years 2021 and 2020, respectively, which represented 0.9% and less than
0.1% of net revenues for each respective period. The $21.7 million increase was
primarily due to expenses such as legal and professional services related to the
pending ADI Merger and an increase in fair value of contingent consideration
related to a prior acquisition. We expect to incur additional merger-related
expenses as we approach the expected transaction close date.
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Interest and other income (expenses), net

Interest and other income (expense), net were $(16.0) million and $(8.3) million
in fiscal years 2021 and 2020, respectively, which represented (0.6)% and (0.4)%
of net revenues, respectively. Interest income in fiscal year 2021 compared to
fiscal year 2020 decreased by $25.4 million due to lower investment yields from
cash equivalents and decrease in short-term investments portfolio. Other income
in fiscal year 2021 compared to fiscal year 2020 increased by $17.7 million
primarily due to fair value adjustments in privately-held companies and receipt
of previously impaired notes receivable.

Provision (benefit) for income taxes

Our annual income tax expense was $102.5 million and $23.4 million for fiscal
years 2021 and 2020, respectively. The effective tax rate was 11.0% and 3.5% for
fiscal years 2021 and 2020, respectively.

In fiscal year 2020, we reversed $40.5 million of uncertain tax position
reserves and $10.7 million of related interest reserves, net of federal and
state benefits, primarily due to the fiscal fourth quarter settlement of an
audit of our fiscal year 2012 through fiscal year 2014 federal corporate income
tax returns. The reversal of uncertain tax position reserves for intercompany
transfer pricing issues increased accumulated unremitted foreign earnings, which
resulted in an additional Internal Revenue Code Section 965 transition tax
("Transition Tax") charge of $6.5 million in the fiscal fourth quarter.

Our federal statutory tax rate is 21%. Our fiscal year 2021 effective tax rate
was lower than the statutory tax rate primarily due to earnings of foreign
subsidiaries, generated by our international operations managed in Ireland, that
were taxed at lower rates and a $13.2 million reversal of uncertain tax position
and related interest reserves. These impacts were partially offset by tax
generated by Global Intangible Low-Taxed Income ("GILTI") provisions.

Our fiscal year 2020 effective tax rate was lower than the statutory tax rate
primarily due to the $51.2 million reversal of uncertain tax position and
related interest reserves, and earnings of foreign subsidiaries, generated by
our international operations managed in Ireland, that were taxed at lower rates.
These impacts were partially offset by tax generated by GILTI provisions and a
$6.5 million Transition Tax charge.

We have various entities domiciled within and outside the United States. The
following is a breakout of our U.S. and foreign income (loss) before income
taxes:
                                      For the Year Ended
                            June 26,       June 27,       June 29,
                              2021           2020           2019
                                        (in thousands)
Domestic pre-tax income    $  69,061      $  72,854      $ 103,016
Foreign pre-tax income       860,675        605,242        651,405
Total                      $ 929,736      $ 678,096      $ 754,421



A relative increase in earnings in lower tax jurisdictions, such as Ireland, may
lower our consolidated effective tax rate, while a relative increase in earnings
in higher tax jurisdictions, such as the United States, may increase our
consolidated effective tax rate. However, after fiscal year 2018 the
consolidated effective tax rate impact of earnings changes in various tax
jurisdictions is not as significant due to the reduction of the federal
statutory tax rate from 35% to 21% and GILTI provisions, which effectively
subject income earned by our foreign subsidiaries to current U.S. tax at a rate
of 10.5%, less foreign tax credits.

Recently published accounting position papers

Refer to our analysis of recently published accounting pronouncements, as included in Part IV, Item 15. Attachments and Tables to Financial Statements, Note 2: “Summary of Significant Accounting Policies”.

Financial situation, liquidity and capital resources

Financial condition

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Cash flows were as follows:

                                                                          For the Year Ended
                                                          June 26,           June 27,             June 29,
                                                            2021               2020                 2019
                                                                            (in thousands)
Net cash provided by operating activities               $ 924,260          $  800,855          $    875,840
Net cash provided by (used in) investing activities       (30,511)            (32,049)              856,911

Net cash provided by (used in) financing activities (187,765)

  (940,720)           (1,518,893)
Net increase (decrease) in cash, cash equivalents and
restricted cash                                         $ 705,984          $ (171,914)         $    213,858



Operating Activities

Cash flow from operating activities corresponds to net income adjusted for certain non-cash items and changes in certain assets and liabilities.

Cash provided by operating activities was $924.3 million in fiscal year 2021, an
increase of $123.4 million compared with fiscal year 2020. This increase was
primarily caused by an increase in net income of $172.6 million and changes in
working capital. Changes in working capital were driven by increases in other
assets and other liabilities, partially offset by decreases in accounts
receivable and price adjustment and other revenue reserves.

Investment activities

Cash flow from investing activities consists primarily of capital expenditures, purchases and maturities net of investments and acquisitions.

Cash used in investing activities was $30.5 million in fiscal year 2021, a
decrease of $1.5 million compared with fiscal year 2020. The change was due to a
$70.4 million decrease in maturities of available-for-sale securities. The
Company also paid $69.3 million, net of cash acquired, for an acquisition during
fiscal year 2020.

Financing Activities

Financing cash flows consist primarily of new borrowings, repurchases of common
stock, issuance and repayment of notes payables, payment of dividends to
stockholders, proceeds from stock option exercises and employee stock purchase
plan and withholding tax payments associated with net share settlements of
equity awards.

Net cash used in financing activities was $187.8 million in fiscal year 2021, a
decrease of $753.0 million compared with fiscal year 2020. Cash used in
financing activities was lower due to a decrease in repurchases of common stock
of $431.6 million and dividend payments of $389.0 million, offset by an increase
in net issuance of restricted stock units and awards of $26.0 million and
proceeds from the Employee Stock Purchase Plan ("ESPP") of $23.8 million.

Liquidity and capital resources

Our primary source of liquidity is our cash flow from operating activities resulting from net income and working capital management.

From June 26, 2021, our available funds consisted of $ 2.3 billion in cash and cash equivalents.

On October 30, 2018, we were authorized to repurchase up to $1.5 billion of the
Company's common stock. During the fiscal years ended June 26, 2021 and June 27,
2020, we repurchased an aggregate of $9.2 million and $440.8 million,
respectively, of the Company's common stock. Pursuant to the terms of the ADI
Merger Agreement, the Company suspended its repurchase program on July 13, 2020,
the date we announced our planned merger with ADI.

We paid cash dividends of $ 0.48 per common share totaling $ 128.1 million during fiscal year 2021. The Company terminated its dividend program effective during the first quarter of fiscal year 2021, as provided for in the ADI merger agreement.

We anticipate that the available funds and cash generated from operations will
be sufficient to meet cash and working capital requirements, including the
anticipated level of capital expenditures and debt repayments for at least the
next twelve months.
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Contractual obligations

The following table summarizes our main contractual obligations at
June 26, 2021, and the effect these obligations are expected to have on our liquidity and cash flow in future periods:

                                                                                              Payment due by period
                                                                                 Less than 1                                               More than 5
                                                               Total                year             1-3 years          4-5 years             years
                                                                                                  (in thousands)
Outstanding debt obligations (1)                           $ 1,000,000      

$ – $ 500,000 $ – $ 500,000
Purchase obligations related to stocks (2)

                     299,552              47,055             87,850             72,980              91,667
Transition tax (3)                                             237,160              26,927             77,416            132,817                   -

Interest payments related to debt securities (4) 132 312

        34,125             47,156             34,500              16,531
Operating lease obligations (5)                                 56,900              12,444             18,707             13,533              12,216
Contingent liability                                            10,000              10,000                  -                  -                   -
Total                                                      $ 1,735,924          $  130,551          $ 731,129          $ 253,830          $  620,414



(1) Outstanding debt represents amounts due for our long-term notes.
(2) We order materials and supplies in advance or with minimum purchase
quantities. We are obligated to pay for the materials and supplies when
received.
(3) Internal Revenue Code Section 965 transition tax on accumulated unremitted
earnings of foreign subsidiaries at December 31, 2017, paid in eight
interest-free installments beginning in September 2018.
(4) Interest payments calculated based on contractual payment requirements under
the debt agreements.
(5) We lease facilities under non-cancelable operating lease agreements that
expire at various dates through fiscal year 2031.

Purchase orders for the purchase of the majority of our raw materials and other
goods and services are not included above. Our purchase orders generally allow
for cancellation without significant penalties. We do not have significant
agreements for the purchase of raw materials or other goods specifying minimum
quantities or set prices that exceed our expected short-term requirements.

As of June 26, 2021, our gross unrecognized income tax benefits were $171.7
million which excludes $29.5 million of accrued interest. We are unable to make
a reasonably reliable estimate of the timing of payments of these amounts, if
any, in individual years due to uncertainties in the timing or outcomes of
either actual or anticipated tax audits. As a result, these amounts are not
included in the table above.

Off-balance sheet provisions

From June 26, 2021, we did not have any material off-balance sheet arrangements, as defined in Section 303 (a) (4) (ii) of the SEC Regulation SK.

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