Microchip Tech Warns: Q3 Revenue Drop Exceeds 22%

Microchip Technology, a prominent U.S.-based chip manufacturer, has issued a cautionary statement regarding its anticipated financial performance in the third quarter. The company attributes the potential revenue decline to the challenging economic landscape.

In its preliminary financial report released on January 8 for the third quarter ending on December 31, Microchip Technology disclosed a notable 22% decrease in quarterly revenue. This figure surpasses the company's initial projected decline of 15% to 20% and falls short of Wall Street's anticipated 17% downturn.

CEO Ganesh Moorthy explained, "Given the subdued economic conditions this quarter, our response to reduced demand from both customers and distributors involves scaling back shipment volumes to proactively manage inventory risks."

Microchip Technology has committed to providing more comprehensive details about its third-quarter performance during the earnings report scheduled for February 1.

The company, known for supplying fundamental chips utilized in a wide array of industries, serves a vast customer base exceeding 125,000 across industrial, automotive, consumer, defense, communication, and computer markets.

It is noteworthy that Microchip Technology is not the sole chip manufacturer to share disheartening news this month. On January 5, Mobileye reported a projected 50% decline in first-quarter revenue compared to the corresponding period last year, leading to a substantial 25% drop in stock value. Mobileye attributes the surge in its EyeQ chip inventory to a reduction in orders from automotive manufacturers employing its semiconductors.