Microchip Technology posts record sales in Q4

For the year ending March 31, 2021, the company reported record net sales of $5.438bn

"Our March quarter results were strong by every key metric, closing out a tumultuous fiscal year on a very positive note, which was otherwise dominated by the effects of the COVID-19 pandemic," said Ganesh Moorthy, President and Chief Executive Officer (pictured). "March quarter revenue, non-GAAP gross margin, non-GAAP operating margin, non-GAAP EPS and EBITDA were all records, as every aspect of our business over-performed. Our journey towards our long-term operating model of 65% non-GAAP gross margin and 42% non-GAAP operating margin is off to a good start."

Moorthy added, "Business conditions remained exceptionally strong through the March quarter with record bookings and backlog for product to be shipped over multiple quarters. Demand outpaced the capacity improvements we implemented, resulting in lead times continuing to extend out. In my 40 years in the semiconductor industry, I cannot recall a time when the imbalance between supply and demand has been more acute.”

“In response, we launched our Preferred Supply Program (PSP) to provide customers with supply priority beginning 6 months after their order in exchange for at least 12 months of non-cancellable orders,” Moorthy continued. “Customer response to the program has exceeded our expectations with direct customers and distributors alike. About 44% of our backlog is now in the PSP category, although it is almost 100% of our backlog in some of the most constrained capacity areas. This gives us a solid foundation to enable us to prudently acquire constrained raw materials, invest in expanding factory capacity, and hire employees to support our factory ramps."

Moorthy concluded, "Our backlog for the June quarter is very strong. In addition, we have considerable backlog requested by customers in the June quarter that currently cannot be fulfilled until later quarters despite us growing capacity from the last quarter. This is because the entire semiconductor supply chain remains constrained. Given this backdrop, we expect our net sales in the June quarter to be up between 3.5% and 7.5% sequentially."