Microchip Technology, Inc.

Financial Performance and Guidance: Microchip reported Q4 net sales of $970.5 million, down 5.4% sequentially and 26.8% year-over-year. For Q1 FY2026, they forecast net sales guidance of $1.045 billion, indicating a potential recovery as inventory destocking occurs across customers and distributors.

Inventory Reduction Strategy: The company aims to reduce inventory from 251 days in Q4 FY2025 to between 215-225 days by Q1 FY2026, and has a goal to decrease total inventory by over $350 million during FY2026. Successful execution of this strategy is critical to improving cash flow and profitability.

Operational Efficiency Measures: Microchip has completed restructuring efforts, including closing Tempe Fab 2 and reducing the workforce by 10%. The company expects to save approximately $90-100 million in operating expenses as a result, which will enhance margins in the coming quarters.