Skip to Content
Stock Strategist

This Chipmaker's Prospects Are Anything but Micro

We view Microchip as one of the best-run companies in the microcontroller market.

Mentioned:

We view wide-moat  Microchip Technology (MCHP) as one of the highest-quality semiconductor companies that we cover. Its pending acquisition of Microsemi remains on track, with management expecting the deal to close in June. We believe that this acquisition will be nicely accretive to Microchip and that management might even be conservative about the potential synergies from the deal. In the off chance the Microsemi deal were to unexpectedly fall apart, our $112 fair value estimate would probably revert to around $97, which was our valuation before the merger announcement. Thus, we think Microchip is undervalued even on a stand-alone basis.

Microchip is a leading supplier of microcontrollers, or MCUs, which are semiconductors that act as the brains in a wide variety of common electronic devices, from garage door openers to electric razors and many products in between. We view Microchip as one of the best-run companies in the MCU market and especially like its focus on higher-margin chip opportunities across a wide array of end markets.

Brian Colello does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.