Microchip announced that it is on track to meet its previously announced Q3 fiscal year 2023 revenue guidance: With consolidated net sales expected to be in the range of $2.135 billion to $2.177 billion, equivalent to an annual increase of 22.7% at the midpoint ($2.156 billion), Microchip expects revenue growth despite ongoing supply chain constraints that are still affecting the company's operations.

Microchip: Order backlogs are strong


Microchip reiterated that revenue will grow again in Q4, which ends in March 2023.


Microchip is on track to post its ninth straight quarter of record revenue this quarter, the CEO said, adding that order backlogs remain strong and end-markets remain resilient.


According to the company's earlier earnings release, revenue for the second quarter of fiscal year 2023 was $2.073 billion, up 5.6% quarter-over-quarter and 25.7% year-over-year. Net income of $546.2 million; The above results are record highs, above previous expectations. In the second quarter, 57% of revenue came from MCU, up from 54% in the first quarter, while analogIC's share fell to 28% from 30%.


It is worth noting that Microchip's gross margin reached an all-time high of 67.7% in the second quarter and a pro forma gross margin of 67.8-68.0% for the quarter.

Increase in price at the beginning of the year and increase production at the end of the year


In 2022, the MCU market was mostly in price hikes and out of stock.


At the beginning of the year, Microchip issued a price hike letter to its agents, announcing that it would raise prices on March 1.


On the shortage front, Microchip said in January that it would spend $40 million to upgrade its semiconductor plant in Colorado Springs. The facility will be upgraded to produce 6-inch wafers to 8-inch wafers and will double its capacity by adding 50-75 employees over the next six months. By October, Microchip had news of the expansion. It plans to build a second fab in Gresham, Ore., which could cost as much as $3 billion.


It is worth noting that the shortage of automotive chips has eased recently. But that conclusion has not been accepted by industry insiders.


Sources said that the demand for automotive chips is different, and at present, high-order MCU, ADAS and automotive DDI are still in short supply.


According to the latest statistical forecast of Qunzhi consulting, starting from the second half of 2022, automotive MCU shortage phenomenon is more obvious than other chips! In the third quarter, the market price of vehicle-used MCU increased by about 5-10%, and the shortage of vehicle-used MCU will gradually ease after 2023.