Bright and early this morning, semiconductor firm Analog Devices (NYSE:ADI) put itself back in the news yet again by announcing a re-up of its existing stock repurchase program. Adding $1 billion to the buyback kitty, the firm now boasts a $1.4 billion authorization to take its shares off the market.

Of course, companies buy back shares all the time. Why spotlight this one? For one thing, Analog has been in the news an awful lot lately. A day or so ago, it landed an interview with the Wall Street Journal, discussing the plethora of applications for its Micro-Electro-Mechanical Systems ("MEMS," motion-sensing semiconductors used in products ranging from car airbags to Nintendo's Wii controller). About a month ago, the Journal featured the company as a leader in MEMS technology, competing with semi-big names like Bosch and STMicroelectronics (NYSE:STM).

When a company is (a) getting a lot of press for making a product with expanding market potential, and (b) spending freely to buy back its own shares, it gets my attention. Those factors tell me that there may be more to this story than just a lone journalist considering the technology "interesting." It also tells me the company may think it's not just interesting, but profitable -- and that it wants to keep as much of those profits as possible to itself.

In addition, the buyback's hardly a new development. Turning to the details of the buyback, we learn that Analog has already spent "approximately $2.6 billion" to buy back "approximately 20%" of its shares outstanding over the last couple of years. If we take the latest buyback announcement to its logical conclusion, the firm appears ready to buy back a further 12%.

How likely is that?
Pretty likely, I'd say. For one thing, Analog's stock has lagged the S&P 500 by about nine percentage points over the last year, underperforming rivals Texas Instruments (NYSE:TXN) and STMicro. That gives Analog management good reason to consider its shares unappreciated and undervalued. For another, the company isn't exactly hurting for cash. With $1.8 billion in the bank and no long-term debt, it could do the entire buyback tomorrow, were it so inclined.

This is a much better-than-average semiconductor firm, with margins far superior to the industry average. That said, it's also true that as of today, the shares still don't look value-priced. With a 22 trailing P/E ratio, and long-term profit growth projected at 15% per year, I'd say by that rough measure, at least, there's still plenty of room for these shares to fall. Personally, were I an investor in the company, I'd hope that management keeps its powder dry for even better prices.

Then again, if the MEMS market booms as soundly as the Journal and Analog seem to think it will, those better prices may never arrive.

And who else looks likely to prosper from the burgeoning MEMS market? I recently posed this question to the Fool's in-house expert on all things semi, TMFPlatoish. He pointed out to me that one of our recommendations at Motley Fool Hidden Gems, FormFactor (NASDAQ:FORM), is particularly well positioned in this industry. Read all about the company, and why we like it, when you claim a 30-day free trial of the service.

Fool contributor Rich Smith does not own shares of any company named above. Nintendo is a Stock Advisor pick. The Fool's disclosure policy always knows exactly where it is.