Microchip Technology posted F3Q 2023 earnings report with record net sales of $2.169 billion, marking the 9th consecutive revenue growth quarter. Microcontrollers are a significant element of computing systems, and Microchip’s strong presence in the microcontroller market is pivotal to the company’s future success. Besides, Microchip’s MCU product portfolio ranges from 8-bit products to higher-performance 16-bit and 32-bit products, making the company a solid performer in the semiconductor sector. Seeking Alpha’s Quant is a Strong Buy for only MCHP and IFNNY. Microchip’s Board of Directors approved a 41.5% year-over-year increase in its dividend to 35.8 cents per share, representing 82 consecutive quarters of dividend payments. Finally, the top microcontroller companies, Microchip included, have comparable days of inventory to Texas Instruments and Infineon, but higher than NXP Semiconductors, Renesas, and STMicroelectronics.
Microchip Technology (NASDAQ:MCHP) posted its F3Q 2023 earnings report on February 2, 2023, indicating record net sales of $2.169 billion, up 4.6% sequentially and up 23.4% YoY. This marks the 9th consecutive revenue growth quarter for the company. Notably, Microchip’s strong presence in the microcontroller market is pivotal to the company’s future success, with microcontroller revenues for MCHP increasing 25.6% QoQ on top of 21.1% for analog. Moreover, microcontroller share of total revenues increased to 56.3% in Q3 2022 compared to a 55.3% share for the year-ago quarter, whereas analog share decreased to 28.0% in Q3 2022 from 28.5% YoY.
Microcontrollers are an essential element of computing systems, comprising all major components of a computing system on a single semiconductor device. They provide the digital logic, or intelligence, for electronic applications, controlling electronic equipment, or analyzing sensor inputs. Microchip’s MCU product portfolio ranges from 8-bit products to higher-performance 16-bit and 32-bit products. Based on the market share by type, Microchip leads the 8-bit market with a 29% share of the $5.4 billion market. In the 16-bit market, Microchip holds an 11% share of the $2.8 billion market, with Renesas leading. Finally, in the 32-bit market, Microchip holds a 7% share of the $10.0 billion market, led by Renesas.
In the semiconductor sector standardized by the WSTS consortium, microcontrollers demonstrated the best performance. Chart 1 shows Microcontroller Unit Shipments and ASPs (average selling prices) for the period July 2019 to January 2023. Based on the trendlines, both units and ASPs increased over this period. Moreover, the analog chip sector makes up 28% of MCHP’s revenues, and Chart 2 shows that it also demonstrated positive unit shipments and ASPs over the period.
In conclusion, Microchip Technology’s microcontroller market presence is crucial to the company’s future success. The company’s microcontroller product portfolio ranges from 8-bit products to higher-performance 16-bit and 32-bit products, and based on the market share by type, Microchip leads the 8-bit market with a 29% share of the $5.4 billion market. Furthermore, the semiconductor sector standardized by the WSTS consortium demonstrated that microcontrollers performed the best. Microchip’s strong Q3 2022 earnings report, along with the company’s leading microcontroller market position, makes it a solid performer in the semiconductor sector.
In 2022, 28.3 billion microcontrollers were sold, resulting in revenues of $24.7 billion and an average selling price (ASP) of $0.87. However, Chart 4 shows that Microchip’s days of inventory at 139 days is higher than NXP Semiconductors, Renesas, and STMicroelectronics. Nonetheless, Seeking Alpha’s Quant is a Strong Buy for only MCHP and IFNNY, as shown in Chart 5. Besides, Microchip’s Board of Directors approved a 41.5% year-over-year increase in its dividend to 35.8 cents per share, which represents 82 consecutive quarters of dividend payments for Microchip.
Don’t miss interesting posts on Famousbio
