Microchip Technology Forecasts Q4 Profit Below Expectations Amid Supply Crunch
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 06 2026
0mins
Should l Buy MCHP?
Source: Newsfilter
- Earnings Downgrade: Microchip Technology forecasts adjusted earnings of approximately 40 cents per share for Q4, falling short of Wall Street's average estimate of 48 cents, indicating a negative impact on profitability due to memory supply constraints.
- Sales Outlook: The company anticipates net sales between $1.24 billion and $1.28 billion for Q4, slightly above the $1.23 billion estimate, suggesting some market demand despite ongoing challenges.
- Stock Reaction: Shares of Microchip fell over 5% in after-hours trading, reflecting investor concerns regarding the lowered profit expectations, which may affect future investment confidence.
- Industry Impact: The global memory supply shortage has severely impacted the personal electronics sector, forcing smartphone and PC manufacturers to cut back on orders, thereby affecting the performance of suppliers like Microchip Technology.
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Analyst Views on MCHP
Wall Street analysts forecast MCHP stock price to fall
18 Analyst Rating
13 Buy
5 Hold
0 Sell
Moderate Buy
Current: 78.920
Low
60.00
Averages
77.47
High
95.00
Current: 78.920
Low
60.00
Averages
77.47
High
95.00
About MCHP
Microchip Technology Incorporated is a provider of smart, connected, and secure embedded control solutions. The Company’s semiconductor products segment designs, develops, manufactures and markets mixed-signal microcontrollers, development tools and analog, interface, mixed-signal, timing, wired and wireless connectivity devices, and memory products. The Company's technology licensing segment includes sales and licensing of the Company's intellectual property. Its products include PIC64 Microprocessors, FPGAs, myMicrochip, MPLAB X IDE, Analog, and Microcontrollers. Its development tools include Atmel START and MPLAB Discover. Its manufacturing operations include wafer fabrication, wafer probe, assembly, and test. The Company’s solutions serve customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. The Company markets and sells its products worldwide primarily through a network of direct sales personnel and distributors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Employment Data Impact: Initial US jobless claims fell by 5,000 to 227,000, reflecting a slightly weaker labor market, which could influence the Federal Reserve's monetary policy decisions and lower market expectations for future rate cuts.
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- Transaction Arrangements: Microchip entered into privately negotiated capped call transactions with initial purchasers and other financial institutions, which is expected to provide additional financial flexibility and help manage future equity dilution risks.
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