Microchip Technology, Inc.

Financial Performance Decline: Microchip Technology Incorporated reported net sales of $1.026 billion for the December quarter, marking an 11.8% sequential decline and a significant 41.9% decrease year-over-year. This reflects broader challenges in the semiconductor industry due to a post-COVID inventory correction.

Inventory Management Focus: The company's inventory was reported at 266 days, up from 247 days in the previous quarter, with a target reduction plan that aims to lower inventory by approximately $250 million by the end of fiscal year 2026. The focus on inventory reduction is critical to freeing up cash flow.

Guidance for March Quarter: The outlook for the March quarter anticipates net sales between $920 million and $1 billion, with non-GAAP gross margins projected between 54% and 55%. Despite a low visibility environment, hopes for a rebound depend on inventory depletion among customers and increased design wins.