- Microchip is seeing record lead times for key product categories like MCUs and is implementing a new Preferred Supply Program to prioritize customers willing to make long-term order commitments.
- The entire chip industry faces a challenging "dismount" from record lead times, as double-ordering is obscuring real end-user demand and capex needs ahead of some major long-term growth opportunities.
- Given capacity/supply constraints and record lead times, I'm not sure what drives beat-and-raise quarters or further re-rating now. I like the long-term outlook for Microchip, but the valuation seems stretched.
For further details see:
Microchip Technology Trying To Manage Unprecedented Near-Term Demand Ahead Of Attractive Long-Term Growth Opportunities