Microchip Technology to Suffer Continued Declines, Analysts Expect Late 2025 Rebound

Microchip Technology (NASDAQ: MCHP) is expected to see further revenue declines in fiscal 2025, continuing a downward trajectory that began in the fiscal third quarter of 2024. The analog chipmaker reported a sharp decline in its latest fourth-quarter results, with a year-over-year (non-GAAP) sales drop of -41% and a net income decline of -66%.

For the full fiscal year 2024, Microchip Technology experienced a -10% year-over-year decline in sales (non-GAAP). Analysts forecast a more pronounced drop in 2025, with sales anticipated to fall by -28% to $5.5 billion. Net income (non-GAAP) is also expected to suffer, with a projected decrease of -48% to $1.4 billion.

Looking ahead to the first quarter of 2025, the outlook is expected to remain bleak. Sales (non-GAAP) are projected to decrease by -46% year over year, while net income (non-GAAP) is expected to fall by -69%. The ongoing downturn is attributed to continued challenges within the semiconductor industry and weakened demand across the company’s end markets. Additionally, the company faces order deferrals and cancellations as customers seek to normalize inventories amid softening demand conditions. However, there is optimism for the latter part of the fiscal year, with analysts estimating a rebound in the fourth quarter of 2025, forecasting a +14% increase in sales and a +38% rise in net income.

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