Microchip Still Sees Chip Shortages and Is Striving to Catch Up to Demand; Maintain $83 FVE

Wide-moat Microchip Technology reported strong fiscal 2023 second-quarter results and bucked the trend among analog and mixed-signal chipmakers by providing investors with upbeat guidance for the December quarter, ahead of FactSet consensus estimates. Minimal exposure to PCs and smartphones has helped the firm dodge headwinds in the near term, while it is still benefiting from the global chip shortage and robust demand across its core end markets. We maintain our $83 fair value estimate; the shares were up in after-hours trading but are still undervalued, in our opinion.