Microchip reported a very strong June quarter with record bookings, guiding revenue up 8% sequentially with margins above the long-term model. The growth is led by data center and aerospace/defense, while industrial and automotive are recovering. Supply chain constraints in foundry and OSAT capacity are a key challenge and an early-cycle signal. Guides $1.6bn revenue for Sept-qtr (8% up Q/Q) and 66.5% GM, above long-term model (65%).
Microchip reported a very strong June quarter with record bookings, guiding revenue up 8% sequentially with margins above the long-term model. The growth is led by data center and aerospace/defense, while industrial and automotive are recovering. Supply chain constraints in foundry and OSAT capacity are a key challenge and an early-cycle signal. Guides $1.6bn revenue for Sept-qtr (8% up Q/Q) and 66.5% GM, above long-term model (65%).
Microchip reported a very strong June quarter with record bookings, guiding revenue up 8% sequentially with margins above the long-term model. The growth is led by data center and aerospace/defense, while industrial and automotive are recovering. Supply chain constraints in…
Management reported strong demand signals: bookings in the June quarter were the strongest in about four years, book-to-bill was well above 1, and distribution sell-through grew 17% sequentially. They see demand broadening across end markets, with data center and…
Reported gross margin was 63.24%, reinforcing the quarter's better-than-guided profitability.
Data center (17.1% of sales) is a primary growth driver, with total DC exposure expected to grow ~69% in 2026.
Management highlighted significant and accelerating growth in data center revenue, driven by broad product exposure and new design wins in PCIe Gen 6 switches and retimers. They expect continued substantial growth in 2027 from these design wins entering production, with data center becoming a major end market at 17.1% of June quarter sales.
Management reported strong demand signals: bookings in the June quarter were the strongest in about four years, book-to-bill was well above 1, and distribution sell-through grew 17% sequentially. They see demand broadening across end markets, with data center and aerospace/defense leading, and industrial/automotive recovering.
Capital expenditures are expected to remain modest at about $100 million for fiscal year 2027. While internal capacity is not the main constraint, management noted challenges from foundry and OSAT (subcontractor) capacity, and they are bringing some testing internal to mitigate.
Management exuded confidence with record bookings, broad-based growth, and raised guidance, while also acknowledging supply chain constraints.
This limits Microchip's ability to fully meet demand and could cap near-term upside, though they do expect incremental capacity each quarter.
“We are running into challenges on certain kind of substrates, subcontracting capacity, and foundry constraints on multiple nodes.”
“The challenges in subcontracted capacity and Test Capacity are also stressing our lead times from products built by our own fabs.”
“The price adjustments we discussed in the early June have now been successfully implemented in the marketplace. Most pricing is effective between mid-August to early September,”
“There are a lot of packages we don't do internally. We don't do PGAs internally, we don't do many of these packages that require substrates and advanced packaging and multi-chip and other we do outside and AI is crowding out a lot of that…”
“And the distributors are frustrated that their customers aren't listening and giving them longer-term orders... Customers don't move until they get in trouble.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2027 Q2 | $0.91–$0.95 | $0.93 | GUIDED |
| Gross margin | FY2027 Q2 | 66%–67% | 66.5% | GUIDED |
| Op margin | FY2027 Q2 | 38.5%–39.5% | 39% | GUIDED |
| Revenue | FY2027 Q2 | $1.586B–$1.619B | $1.6025B | MAINTAINED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2026 Q4 | EPS | FY2027 Q1 | $0.67–$0.71 | $0.76 | Met / beat |
| FY2026 Q4 | Gross margin | FY2027 Q1 | 62.25%–63.25% | 63.24% | Met / beat |
| FY2026 Q4 | Op margin | FY2027 Q1 | 33%–34.5% | 22.68% | Missed |
| FY2026 Q4 | Revenue | FY2027 Q1 | $1.55B–$1.57B | $1.4847B | Missed |
| FY2026 Q3 | EPS | FY2026 Q4 | $0.48–$0.52 | $0.57 | Met / beat |
| FY2026 Q3 | Gross margin | FY2026 Q4 | 60.5%–61.5% | 60.98% | Met / beat |
| FY2026 Q3 | Op margin | FY2026 Q4 | 28.8%–30.2% | 16.1% | Missed |
| FY2026 Q3 | Revenue | FY2026 Q4 | $1.24B–$1.28B | $1.3112B | Met / beat |
| FY2026 Q2 | EPS | FY2026 Q3 | $0.34–$0.40 | $0.44 | Met / beat |
Microchip highlights significant constraints in foundry and OSAT (advanced packaging/test) capacity due to AI crowding out, impacting lead times for its products. — Indicates a broad-based supply chain bottleneck for components outside the AI accelerator itself, potentially diverting capacity and impacting other semiconductor companies.
Microchip has implemented across-the-board price increases, capturing prior cost inflation from foundries and OSATs, and expects full-quarter benefit in December.
… customer requests for expedited shipments have increased significantly from a few quarters ago. We are receiving a large number of orders for requests inside the lead time and many times are going unsupported in the quarter. We are advising our customers to give us longer-term backlog to match at least our lead times and preferably matching our manufacturing cycle times. I also wanted to give you an update on the pricing. The price adjustments we discussed in the early June have now been successfully implemented in the marketplace. Most pricing is effective between mid-August to early September, making a small impact to the September quarter. Taking all of these factors into account, we expect our net sales for the September quarter to be up 8% sequentially, plus or minus 1%. This at the midpoint will be up 40.6% from the year-ago quarter. We expect our non-GAAP gross margin to be between 66% to 67% of sales. We expect our non-GAAP operating expenses to be about 27.5% of sales. We expect our non-GAAP operating profit to be between 38.5% and 39.5% of sales. We expect our non-GAAP diluted earnings per share to be between $0.91 and $0.95 per share. At the midpoint, non-GAAP …
Microchip sees third-party OSAT capacity constrained by AI demand, prompting it to bring more assembly/test internally, but it lacks advanced packaging (substrates) capability, which remains a bottleneck.