Microchip (MCHP) Cantor Fitzgerald Global Technology & Industrial Growth Conference summary

Bookings, backlog, and inventory trends

• Bookings in January and February were the strongest since early fiscal 2023, with broad-based demand across markets and geographies.

• Backlog is building, providing visibility into the June quarter and supporting confidence in near-term performance.

• Distribution channel inventory is normalized at 28 days, while direct customer inventory is gradually depleting, leading to increased sell-through and new bookings from returning customers.

• Inventory normalization is expected to continue over the next few quarters as customers align purchases with end demand.

Market and segment performance

• Industrial, including aerospace and defense, represents about 48% of revenue, with aerospace and defense showing steady, high-margin growth due to global conflicts and strong demand.

• Industry 4.0, factory automation, robotics, and medical segments are performing well, with increasing industrial content and edge IoT activity.

• In aerospace and defense, defense is the largest contributor, with commercial aviation and space also showing strong activity and content growth.

Product innovation and growth drivers

• Two major platform-level products are ramping for 2026–2027: automotive Ethernet (10BASE-T1S) and Gen 6 PCIe switches on 3nm, both expected to drive multi-year growth.

• 10BASE-T1S targets a multi-decade transition in automotive networking, with initial wins at Hyundai and other OEMs, ramping revenue from 2027 onward.

• Gen 6 PCIe switches offer 15–20% better power efficiency, with significant design wins and a strong competitive position; Gen 7 is expected within 12 months.

• Retimer products, complementary to switches, are launching soon and expected to address a $2 billion TAM by 2030.