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Microchip Tech expects weak revenue as customers try to clear excess inventory

Economic Times · 3m

Microchip Technology has predicted lower-than-expected net sales for the second quarter due to weak demand from customers trying to clear excess inventory accumulated during the pandemic. This announcement caused the company's shares to drop by over 5%. The slowdown in the demand for electric vehicles, combined with customers' efforts to reduce semiconductor inventory, has negatively impacted Microchip and other companies in the industry. CEO Ganesh Moorthy mentioned that the expected recovery hasn't been as strong as anticipated, particularly in the industrial and automotive markets in Europe and the Americas. NXP Semiconductors also recently forecasted lower revenues due to similar challenges. Microchip expects second-quarter net sales between $1.12 billion and $1.18 billion, below analysts' average estimate of $1.31 billion.