Jan 5 (Reuters) – Microchip Technology raised its expectations for third-quarter net sales on Monday, helped by recovery across end markets and strong bookings, sending shares up 5.6% in after-hours trading.
The chipmaker is experiencing a recovery as clients finish working through excess chip stockpiles accumulated during the pandemic that had hammered demand.
The company now expects net sales to be about $1.19 billion for the third quarter of fiscal 2026, above its original forecast range of $1.11 billion to $1.15 billion provided in November.
Early in December, the company said it expected quarterly net sales to be at the high end of that range.
“Our bookings activity was very strong in the December quarter despite a holiday filled quarter. Our March quarter starting backlog started out much better than that for the December quarter,” said CEO Steve Sanghi.
The company said it has significantly reduced internal inventory, which will begin to lower write-offs. It is also preparing to ramp up factory production in the March quarter to reduce under-utilization charges.
Microchip will report fiscal third-quarter results on February 5.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Alan Barona)
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