Skip to Content

Microchip Technology Inc MCHP

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Microchip Remains Capacity Constrained Like Its Peers, but Foresees Solid Growth; $150 FVE

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Wide-moat Microchip reported solid fiscal fourth-quarter results and provided investors with an upbeat outlook for the June quarter as the company is seeing robust demand for chips used in a variety of end markets. We raise our fair value estimate to $150 per share from $140, mostly due to the time value of money as we roll our valuation model. Similar to its peers, Microchip is seeing a semiconductor shortage and chip demand far exceeding supply, but this exemplary management team continues to navigate the supply challenges well, including the firm’s Preferred Supply Program, or PSP, which has improved its customer order visibility. We view shares as fairly valued.

Read Full Analysis

Company Profile

Business Description

Microchip became an independent company in 1989 when it was spun off from General Instrument. More than half of revenue comes from MCUs, which are used in a wide array of electronic devices from remote controls to garage door openers to power windows in autos. The company's strength lies in lower-end 8-bit MCUs that are suitable for a wider range of less technologically advanced devices, but the firm has expanded its presence in higher-end MCUs and analog chips as well.

Contact
2355 West Chandler Boulevard
Chandler, AZ, 85224-6199
T +1 480 792-7200
Sector Technology
Industry Semiconductors
Most Recent Earnings Dec 31, 2020
Fiscal Year End Mar 31, 2021
Stock Type Cyclical
Employees 18,000

Related

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.