Quality Investor

Microchip Technology Incorporated

Rank #356Capital Return

MCHPP · Nasdaq · Technology

Microchip Technology Incorporated (MCHPP) — Rank #356 by gross profitability (GP/assets 0.19) · ROE 3.6% · Piotroski F-Score 6 / 9.

As-of 2026-09-28 · CIK 0000827054 · all metrics point-in-time as of the filing date.

About

Microchip Technology Incorporated develops, manufactures, and sells smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia.

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It operates in two segments, Semiconductor Products and Technology Licensing. The company offers general-purpose 8-bit, 16-bit, 32-bit, and 64-bit mixed-signal microcontrollers; 32-bit and 64-bit embedded mixed-signal microprocessors; and specialized mixed-signal microcontrollers for automotive, industrial, computing, communications, lighting, power supplies, motor control, human-machine interface, security, wired connectivity, and wireless connectivity applications. It also provides analog products, including power management, linear, mixed-signal, high voltage, thermal management, discrete diodes and MOSFETs, radio frequency (RF), gate drivers, safety, security, timing, application-specific standard products, USB, Ethernet, wireless, and other interface products; field-programmable gate array (FPGA) products; and application development tools that enable system designers to program mixed-signal microcontroller, FPGA, and microprocessor products. In addition, the company offers memory products consisting of serial electrically erasable programmable read-only memory, serial flash memories, parallel flash memories, serial static random-access memory, and electrically erasable random-access memory for footprint devices. Further, it licenses its SuperFlash embedded flash and non-volatile memory technologies to foundries, integrated device manufacturers, and design partners for use in the manufacture of microcontroller products, gate arrays, RF, analog, and neuromorphic compute products. Additionally, the company offers engineering services; wafer foundry, assembly, and test subcontracting manufacturing services; and timing systems, application-specific integrated circuits, and products for aerospace applications.

The company was incorporated in 1989 and is headquartered in Chandler, Arizona.

Industry
Semiconductors
Sector
Technology
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
March 31

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

17,900

Industry

Semiconductors

Exchange

Nasdaq

Signal Flags

3 green
Revenue growth acceleratingGrowth rate increasing year over year
Operating leverage expandingOperating income growing faster than revenue
Sequential beat (rev + EPS)Both revenue and EPS exceeded prior quarter — 1-quarter streak

Quality Profile

Profitability

1/1 pass
GP / assets
0.19
Return on equity
3.6%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
1.23
Current ratio
1.92×
Net cash
-$5.09B

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
5.4%

Growth

2/2 pass
Revenue growth
7.1%
Piotroski F-Score
6 / 9
Share dilution
1.5%

Terry Smith quality gate

Passes 2/5 Terry Smith thresholds

1 of 5 threshold not computable from filed data.

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Gross profitability (GP / assets)

0.19

Primary signal (Novy-Marx).

20th pctl of 21 SIC 3674 peers

Return on equity

3.6%

Gross margin

57.7%

85th pctl of 21 SIC 3674 peers

Revenue growth (YoY)

7.1%

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2023202420252026
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

-17.6%

Revenue CAGR (5Y)

-2.8%

Earnings CAGR (3Y)

-53.2%

FCF CAGR (3Y)

-36.9%

Anti-fragile safety

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

1.23

21st pctl of 20 SIC 3674 peers (best = lowest)

Current ratio

1.92×

20th pctl of 21 SIC 3674 peers

Quick ratio

0.96×

Net cash

-$5.09B

Cash & equivalents minus total debt.

Recession resistance

Revenue through recessions

Worst single-year YoY revenue decline, 19 years of history

Weak
2008-2009 (GFC)
-12.8%Significant decline
2020 (COVID)
-1.4%Mild decline
Worst year on record(any fiscal year, not recession-limited)
-42.3%Significant decline

Cash-flow health

Free cash flow

$760.20M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

2.31

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

5.4%

Stock-based comp intensity.

Dividend safety

Composite score

0.8 / 5

Weak
Payout ratio
427.8%0/5 Weak
FCF coverage
0.77×1/5 Weak
Dividend growth streak
2 yr1/5 Weak
Balance-sheet health
D/E 1.23 · IC N/A1/5 Weak

Piotroski F-Score

F-Score

6 / 9

Fundamental-strength score (0-9).

Lifecycle Phase History

20212026
Value
Hypergrowth
Decline
Capital Return