Summary

  • Microchip Technology Incorporated is a leading provider of smart, connected and secure embedded control solutions.
  • The company's microcontroller product line represents the largest component of its total net sales.
  • The company's synergistic product portfolio includes 5G, data centers, artificial intelligence and machine learning, Internet of Things (IoT) and edge computing, advanced driver assist systems (ADAS) and autonomous driving

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Microchip Technology (Nasdaq: MCHP, LSE:0K19) Incorporated is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduces risk while lowering total system cost and time to market. The company's solutions serve more than 120,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality.

Financial Highlights

Financial results for Third Quarter ended December 31, 2022 of fiscal year 20231

Net sales for the third quarter of fiscal 2023 were a record $2.169 billion, up 23.4%from net sales of $1.758 billion in the prior year's third fiscal quarter.

GAAP net income for the third quarter of fiscal 2023 was $580.3 million, or $1.04 per diluted share, up from GAAP net income of $352.8 million, or $0.62per diluted share, in the prior year's third fiscal quarter. For the third quarters of fiscal 2023 and fiscal 2022, GAAP net income was adversely impacted by amortization of acquired intangible assets associated with its previous acquisitions.

Non-GAAP net income for the third quarter of fiscal 2023was a record at $863.7 million, or $1.56per diluted share, up from non-GAAP net income of $681.7 million, or $1.20per diluted share, in the prior year's third fiscal quarter.

Microchip announced today that its Board of Directors declared a record quarterly cash dividend on its common stock of 35.8 cents per share, up 9.1% from the cash dividend paid last quarter and up 41.5% from the year ago quarter. The quarterly dividend is payable on March 7, 2023to stockholders of record on February 21, 2023.

Net sales for the fiscal year ended March 31, 2022 were a record $6.821 billion, an increase of 25.4% from net sales of $5.438 billion in the prior fiscal year.

GAAP net income for the fiscal year ended March 31, 2022 was $1.286 billion, or $2.27 per diluted share, an increase of 267.9% from net income of $349.4 million, or $0.65 per diluted share in the prior fiscal year. Fiscal 2022 and fiscal 2021 GAAP net income were significantly adversely impacted by amortization of acquired intangible assets associated with its previous acquisitions and loss on debt settlement associated with its debt refinancing activities.

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Business Segments

Microcontrollers

The company's microcontroller product line represents the largest component of its total net sales. Microcontrollers and associated application development systems accounted for approximately 56.0% and 54.5% of its net sales in fiscal 2022 and fiscal 2021, respectively.2

Net sales of its microcontroller products increased approximately 28.8% in fiscal 2022 compared to fiscal 2021. The increase in net sales was due primarily to strength in demand for its microcontroller products in end markets that the company serve and its price increases.

Analog

The company's analog product line includes analog, interface, mixed signal and timing products. The company's analog product line accounted for approximately 28.4% and 27.9% of its net sales in fiscal 2022 and fiscal 2021, respectively.

Net sales from its analog product line increased approximately 27.6% in fiscal 2022 compared to fiscal 2021. The increase in net sales was primarily due to strength in demand for its analog products in end markets that the company serve and its price increases.

Other

The company's other product line includes FPGA products, royalties associated with licenses for the use of its SuperFlash and other technologies, sales of its intellectual property, fees for engineering services, memory products, timing systems, manufacturing services (wafer foundry and assembly and test subcontracting), legacy application specific integrated circuits, and certain products for aerospace applications. Revenue from these services and products accounted for approximately 15.6% and 17.6% of its net sales in fiscal 2022 and fiscal 2021, respectively.

Net sales related to these products and services increased approximately 11.4% in fiscal 2022 compared to fiscal 2021. The increase in net sales was primarily due to strength in demand for its products in end markets that the company serve and its price increases.

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Company Overview

Microchip Technology develop, manufacture and sell smart, connected and secure embedded control solutions used by its customers for a wide variety of applications. With over 30 years of technology leadership, its broad product portfolio is a Total System Solution (TSS) for its customers that can provide a large portion of the silicon requirements in their applications. TSS is a combination of hardware, software and services which help its customers increase their revenue, reduce their costs and manage their risks compared to other solutions.

The company's synergistic product portfolio empowers disruptive growth trends, including 5G, data centers, artificial intelligence and machine learning, Internet of Things (IoT) and edge computing, advanced driver assist systems (ADAS) and autonomous driving, and electric vehicles, in key end markets such as automotive, aerospace and defense, communications, consumer appliances, data centers and computing, and industrial.

Products

Microchip Technology is a leading provider of smart, connected and secure embedded control solutions.3

  • Microcontrollers and Microprocessors
  • Analog
  • Amplifiers and Linear ICs
  • Clock and Timing
  • Data Converters
  • Embedded Controllers and Super I/O
  • FPGAs and PLDs
  • High-Speed Networking and Video
  • Interface and Connectivity
  • LED Drivers and Backlighting
  • Memory Products
  • Power Discretes
  • Power Management
  • Power over Ethernet
  • RF and Microwave
  • Security Products
  • Sensors and Motor Drive

Services

  • Smart Energy/Metering
  • Storage
  • Touch and Gesture
  • Wireless Connectivity

Manufacturing

The company's manufacturing operations include wafer fabrication, wafer probe, assembly and test.

LocationApprox Sq. FtPrincipal Operations
Gresham, Oregon826,500Wafer fabrication (Fab 4), R&D center, warehousing and administrative offices
Chandler, Arizona687000

Executive and administrative offices, wafer probe, R&D center, sales and marketing, and computer and service functions

Lamesa, Calamba, Philippines

610,300Assembly and test, warehousing and administrative offices
Chacherngsao, Thailand498,100

Assembly and test, wafer probe, sample center, warehousing and administrative offices

Colorado Springs, Colorado480,000Wafer fabrication (Fab 5), test and R&D

Canlubang, Calamba, Philippines

460,000Wafer probe, test, warehousing and administrative offices
Tempe, Arizona388,100Wafer fabrication (Fab 2), R&D center, warehousing and administrative offices
Bangalore, India294,000R&D center, sales and marketing support and administrative offices
Chacherngsao, Thailand267,100Assembly and test, warehousing and administrative offices
Chennai, India187,000R&D center
Lawrence, Massachusetts160,000Manufacturing and administrative offices
Rousset, France144,500Test, R&D and administrative offices

Mount Holly Springs, Pennsylvania

100,000Manufacturing, R&D and administrative offices
Garden Grove, California98,100Manufacturing, R&D and administrative offices
San Jose, California98,000R&D and administrative offices

Neckarbischofsheim, Germany

83,800Manufacturing and administrative offices
Nantes, France77,000Wafer probe, test, R&D, warehousing and administrative offices
San Jose, California71,000R&D and administrative offices
San Jose, California57,000R&D and administrative offices
Beverly, Massachusetts52,100Manufacturing
Heilbronn, Germany48,000R&D and administrative offices
Karlsruhe, Germany46,000R&D and administrative offices
Ennis County, Ireland40,000Manufacturing, R&D and administrative offices
Simsbury, Connecticut32,500Manufacturing, R&D and administrative offices
Shanghai, China21,000R&D, sales and marketing support and administrative offices
Hsinchu, Taiwan15,000R&D and administrative offices

References

  1. ^ https://ww1.microchip.com/downloads/aemDocuments/documents/investor/press-release/MCHP_Announces_Record_Financial_Results_for_Q3FY23.020223.pdf
  2. ^ https://fintel.io/doc/sec-microchip-technology-inc-827054-10k-2022-may-20-19132-7260
  3. ^ https://www.microchip.com/en-us/products
Created by Asif Farooqui on 2023/02/13 18:09
     
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