Microchip Technology Forecasts Weaker Q4 Profit Amid Memory Shortages
Microchip Technology (NASDAQ: MCHP) shares fell over 5% in after-hours trading after the chipmaker projected lower-than-expected fourth-quarter profits. The Arizona-based company cited persistent global memory shortages as the primary culprit, disrupting orders from major smartphone and PC manufacturers.
Adjusted earnings are now forecast at roughly 40 cents per share, missing analyst estimates of 48 cents. Revenue projections of $1.2 billion to $1.3 billion narrowly exceed expectations. The memory crunch, expected to linger through 2025, has squeezed margins across the electronics sector.
Microchip is pivoting toward AI data centers and automotive markets for long-term growth, while pausing share buybacks to reduce debt. The company's third-quarter performance—$1.2 billion in sales and 44 cents adjusted EPS—had slightly surpassed forecasts, but supply chain headwinds now dominate the narrative.
