Microchip (MCHP) Mizuho Technology Conference 2025 summary

Market trends and demand outlook

• Book-to-bill ratio improved to 1.07 in March, with May bookings at multi-year highs, signaling demand recovery across all markets including automotive and industrial.

• Distribution inventory stabilized at 33 days, within the typical 28-35 day range, and direct customer inventory has also come down, indicating inventory normalization and restocking.

• Demand improvement is broad-based geographically, with both China and the U.S. showing signs of bottoming and recovery.

Manufacturing and operational strategy

• Manufacturing footprint remains 60% foundry and 40% in-house, but assembly and test operations have shifted significantly in-house, now at 80-90%.

• In-house assembly and test enhance capacity control and are accretive, especially as market conditions improve.

Product diversification and technology roadmap

• FPGA business, especially PolarFire, is growing in industrial control, medical, and communications, with revenue more than doubling since acquisition.

• PCIe switch and retimer products are advancing to PCIe 6, focusing on low power and targeting data center, automotive, and industrial markets; company competes directly with Broadcom and Astera.

• Ethernet products initially targeted automotive but have seen first major design wins in industrial control, with automotive adoption following.