Key Takeaways:
- Microchip Technology Inc. expects net sales for the third quarter of fiscal 2026 to be approximately $1,185 million, exceeding original guidance.
- The company is experiencing a broad-based recovery in most of its end markets, driven by progress in inventory correction and new customer designs.
- Microchip has made substantial progress on its nine-point recovery plan and strategic initiatives, including reducing internal inventory and preparing to ramp up factory production.
- The company looks forward to a strong calendar year 2026, with benefits from its recovery plan expected to materialize.
- Microchip will announce its fiscal third quarter 2026 financial results on February 5, 2026.
Introduction to Microchip Technology Inc.
Microchip Technology Inc. is a leading provider of smart, connected, and secure embedded control solutions. The company recently commented on its expected net sales for the third quarter of fiscal 2026, which ended on December 31, 2025. According to the company, net sales are expected to be approximately $1,185 million, well above the original guidance of $1,109 million to $1,149 million provided on November 6, 2025. This revised guidance is also higher than the subsequent revised guidance provided on December 2, 2025, which indicated that net sales would be on the high end of the original guidance.
Recovery Plan Progress
Steve Sanghi, Microchip’s CEO and President, stated that the company is experiencing a fairly broad-based recovery in most of its end markets. This recovery is driven by progress made in inventory correction in distribution as well as direct customers, and with new customer designs turning to production. Sanghi also noted that bookings activity was very strong in the December quarter, despite the holiday season. Additionally, the company’s March quarter starting backlog started out much better than that for the December quarter. Microchip has made substantial progress on most elements of its nine-point recovery plan, as well as its strategic initiatives.
Inventory Management and Factory Production
The company has seen a substantial reduction in its internal inventory, which will begin to lower its level of inventory write-offs. Microchip is also preparing to ramp up its factories in the March quarter, which will begin to lower the amount of under-utilization charges. This is a significant development, as it indicates that the company is taking steps to optimize its production and reduce costs. By reducing inventory and increasing factory production, Microchip is positioning itself for future growth and improved profitability.
Future Outlook
Sanghi concluded that the company looks forward to a very good calendar year 2026, as it reaps the benefits from the success of its nine-point recovery plan. This optimism is based on the progress made in the third quarter and the company’s expectations for continued growth in its end markets. Microchip will announce its fiscal third quarter 2026 financial results on February 5, 2026, which will provide further insight into the company’s performance and future prospects.
Cautionary Statement
The statements made in the press release regarding net sales, recovery, and future prospects are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause the company’s actual results to differ materially. Factors that could impact the company’s results include uncertainty, fluctuations, or weakness in the U.S. and world economies, changes in demand or market acceptance of its products, and the company’s ability to respond to increases or decreases in market demand.
About Microchip Technology Inc.
Microchip Technology Inc. is a broadline supplier of semiconductors committed to making innovative design easier through total system solutions. The company offers a comprehensive product portfolio and easy-to-use development tools that support customers throughout the design process. Headquartered in Chandler, Arizona, Microchip provides outstanding technical support and delivers solutions across various markets, including industrial, automotive, consumer, aerospace and defense, communications, and computing. For more information, visit the Microchip website at www.microchip.com. Investor relations contact information is also available for those seeking further information about the company’s financial performance and future prospects.
