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Microchip Technology: Microcontrollers, Analog Strength & Connectivity Expansion—A Resilient Growth Blueprint!

Microchip Technology Inc. has delivered its financial performance for the third quarter of fiscal year 2026, showing overall positive trends with some areas of caution. Key financials for the December quarter included net sales of $1.186 billion, marking a 4% sequential increase and exceeding prior guidance. Gross margins on a non-GAAP basis stood at 60.5%, despite underutilization charges of $51.7 million and new inventory reserve charges of $58.4 million, which may pose ongoing challenges. Operating expenses accounted for 32% of sales, translating into an operating income of 28.5% of sales. Non-GAAP net income was reported at $252.8 million, reflecting earnings per share of $0.44, which was higher than the initial forecast. On a GAAP basis, gross margins were slightly lower at 59.6% with total operating expenses hitting $555.2 million, pointing towards notable spending in areas including acquisition-related activities and share-based compensation.