Furthermore, quotes like the following should be subjected an application critical thinking skills...

"As we move forward, there are three primary things that I believe will materially boost not only ADI's gross profit margins, but its operating profit margin and bottom line earnings as well:

1. Improved economy of scale - as revenues go up, fixed costs are more efficiently absorbed
2. Lower capital spending will lead to lower depreciation charges
3. Improved mix of products that more strongly favors higher relative margin product categories"

First, economies of scale pertain to volume price breaks and the efficiencies of mass production and have nothing to do with the management of fixed costs through revenue cycles. Management of fixed and variable costs through revenue cycles is a distinct fundamental business problem encountered on all scales. The first point is high-sounding gibberish.

Second, lowering capital spending may look good on the books to Wall Street for the short term but its not necessarily good for business. Shall we neglect equipment maintenance, replacement and upgrades, and let manufacturing facilities run down? Will the net results of capital reduction be a lot of R&D engineers running around in circles, unable to do their work for want of meters and oscilloscopes?

Third, in semiconductors there are no static high margin product categories; There are product categories where a company has maintained a competitive edge and high margins, and there are product categories where the company has failed. The existence of high margins creates market tensions that draw increased competition with a tendency to bring margins down. Thus, "high margin" is a moving target.