QUOTE AND NEWS
Market Intelligence Center  11 hrs ago  Comment 
For a hedged play on Microchip Technology Inc (MCHP) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Oct. '14 $47.00 covered call for a net debit in the $46.02 area. That is also the break-even stock price for the...
Market Intelligence Center  Aug 6  Comment 
The patented option trade-picking algorithms behind MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered call trade on Microchip Technology Inc (MCHP) that includes 3.25% downside protection. Sell one contract of...
SeekingAlpha  Aug 5  Comment 
By William Meyers: The word "microchip" has become a generic term for very small semiconductor devices. The company Microchip (NASDAQ:MCHP) specializes in microcontrollers. These tiny computers typically monitor sensors and then send output...
Market Intelligence Center  Aug 4  Comment 
For a hedged play on Microchip Technology Inc (MCHP) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Oct. '14 $46.00 covered call for a net debit in the $44.54 area. That is also the break-even stock price for the...
SeekingAlpha  Aug 1  Comment 
Microchip Technology (NASDAQ:MCHP) Q1 2015 Earnings Call July 31, 2014 5:00 pm ET Executives James Eric Bjornholt - Chief Financial Officer, Principal Accounting Officer and Vice President of Finance Ganesh Moorthy - Chief Operating...
newratings.com  Jul 31  Comment 
CHANDLER (dpa-AFX) - Microchip Technology Inc. (MCHP) reported net income for the first quarter of $89.9 million or 40 cents per share, compared to net income of $78.6 million or 37 cents per share for the year-ago quarter. Excluding items,...
Forbes  Jul 30  Comment 
Optimism surrounds Microchip Technology, as it gets ready to report its first quarter results on Thursday, July 31, 2014. Analysts are expecting the company to book a profit of 62 cents a share, up from 51 cents a year ago.The consensus estimate...
Market Intelligence Center  Jul 21  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artifical Intelligence Center found a trading opportunity with Microchip Technology Inc (MCHP) that should provide a 2.92% return in just 89 days. Sell one Oct....
newratings.com  Jul 14  Comment 
CHANDLER (dpa-AFX) - Microchip Technology Inc (MCHP), Monday announced the successful completion of its tender offer to acquire the outstanding shares of Taiwan-based ISSC Technologies Corp. As of the expiration date of the tender offer on July...
Forbes  Jul 11  Comment 
The most recent short interest data has been released by the NASDAQ for the 06/30/2014 settlement date, and we here at Dividend Channel like to sift through this fresh data and order the underlying components of the S&P 500 by "days to cover."...




 

Microchip Technology (NASDAQ: MCHP) makes analog microcontrollers, memory, and other electronic components for embedded systems, which are small, low-power computers designed to perform specific tasks. The company primarily competes in the microcontroller market.

MCHP primarily competes with STMicroelectronics and Atmel.[1] In April 2009, Microchip Technology acquired R&E International, a privately-held developer of integrated circuits. [2]

Business Overview

Business & Financial Metrics[3]

In FY2010, MCHP generated a net income of $217 million on revenues of $947.7 million. This represents an 11.6% decrease in net income and a 4.9% increase in total sales from FY2009, when the company earned $245.6 million on $903. million in total revenues.

Business Segments[4]

MCHP operates through one reportable segment that engages in the design, development, manufacture, and marketing of semiconductors.

Microcontrollers (81.0% of FY2010 sales)

Microcontrollers are essentially computers condensed to a single chip, containing a processor, memory, and a input/output interface. MCHP produces microcontrollers under its PIC brand name. PIC microcontrollers are designed for high performance, low power and cost effectiveness. MCHP microcontrollers use a dual-bus architecture, which has separate pathways for data and instruction, making them faster than the majority of other microcontroller products on the market that tend to use single-bus architectures. MCHP manufactures products in the 8-bit, 16-bit, and 32-bit microcontroller markets and has the largest market share in the 8-bit market.[5] The 8-bit microcontroller is the smallest and most popular of the three, as an estimated 55% of all computers use 8-bit microcontrollers.[6] The 16-bit and 32-bit microcontrollers are more computationally powerful and physically bigger.

MCHP also makes the Development Tools that system designers use to program PIC microcontrollers. These tools are hardware products that let these designers program MCHP's microcontrollers and other electronics products.

Memory Products (8.5% of FY2010 sales)

Memory products consist of Serial EEPROMs (Electrically Erasable Programmable Read-Only Memory), which are useful in embedded devices because they do not require power to keep data stored. MCHP is the largest manufacturer of EEPROMs.

Analog and Interface Products (10,5% of FY2010 sales)

Analog and Interface Products consist of MCHP's power management, linear, mixed-signal, thermal management and interface products, which number over 500. Its line of mixed-signal products primarily includes data converters that convert data from analog to digital or vice versa. Linear products refer to Microchip's products that transfer either analog or digital data, without any conversions.[7]

IMAGE:MCHP-Segments2009.jpg[4]

Key Trends and Forces

Microchip's business has suffered from decreasing demand for its products

Products in the semiconductor industry tend to have short shelf lives, with their selling prices decreasing rapidly over the course of their existence. In the case of Microchip, the average selling prices of its microcontroller and analog and interface products remained relatively constant, but average selling prices of its memory products and non-proprietary analog and interface products have decreased.

Weak U.S. Dollar benefits Microchip's international sales

Because MCHP reports its revenues in U.S. dollars but most of its business is international, it is affected by exchange rates. When the value of the dollar depreciates, MCHP's international sales grow in dollar terms. From 2006-2008, the dollar depreciated relative to the Euro and Japanese Yen.[8][9]

Competitors

  • Atmel (ATML) competes with all three of MCHP's segments and is most notably successful for its business in the smart card market.[10][11]
  • STMicroelectronics (STM) manufactures a wide variety of products in its 3 segments: application specific product group, industrial and multi-segment group, and flash memory group. In the application specific product group, STM competes with Microchip in the production of mixed signal and power technologies. STM's industrial and multi-segment group, on the other hand, competes with MCHP in the production of microcontrollers and memory products.[12][13]

References

  1. MCHP Press Release, 8 Apr 2090
  2. MCHP 2009 10-K pg. F-3  
  3. 4.0 4.1 MCHP 2009 10-K pg. 31  
  4. Wikipedia: 8-bit
  5. EUR to USD Exchange Rates
  6. USD to JPY Exchange Rates
  7. Wikinvest: Atmel
  8. Atmel: Products
  9. Wikinvest: STMicroelectronics
  10. STMicroelectronics: Company Profile
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