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Microchip Technology Inc MCHP

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Microchip Remains Capacity Constrained Like Its Peers, but Foresees Solid Growth; $165 FVE

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Wide-moat Microchip Technology reported strong fiscal first-quarter results and its expectations for the rest of fiscal 2022 (ending March 2022) were ahead of our prior expectations, as the company’s backlog of orders continues to expand because of tremendous near-term demand. We will raise our fair value estimate to $165 from $150. Shares were up only modestly after hours to $150, so we now view shares as modestly undervalued.

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Company Profile

Business Description

Microchip became an independent company in 1989 when it was spun off from General Instrument. More than half of revenue comes from MCUs, which are used in a wide array of electronic devices from remote controls to garage door openers to power windows in autos. The company's strength lies in lower-end 8-bit MCUs that are suitable for a wider range of less technologically advanced devices, but the firm has expanded its presence in higher-end MCUs and analog chips as well.

Contact
2355 West Chandler Boulevard
Chandler, AZ, 85224-6199
T +1 480 792-7200
Sector Technology
Industry Semiconductors
Most Recent Earnings Jun 30, 2021
Fiscal Year End Mar 31, 2022
Stock Type Cyclical
Employees 19,500

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