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Microchip (MCHP) Boosts Portfolio With The Launch of PIC64

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Microchip Technology (MCHP - Free Report) recently announced the launch of its PIC64 portfolio, catering to the increasing demands for power efficiency, hardware-level security and high reliability in real-time, compute-intensive applications such as smart embedded vision and Machine Learning (ML).

Positioned as a single-vendor solution provider for microprocessors (MPUs), Microchip’s new PIC64 family is designed to support various end markets, including industrial, automotive, communications, IoT, aerospace and defense, by integrating 64-bit heterogeneous compute solutions with asymmetric processing capabilities.

The PIC64GX MPUs leverage the 64-bit RISC-V quad-core processor to deliver intelligent edge designs with asymmetric multiprocessing (AMP) and deterministic latencies while offering pin-compatibility with Microchip’s PolarFire SoC FPGA devices for flexible development.

With the recent launch, Microchip underscores its commitment to providing comprehensive embedded solutions, encompassing a full spectrum of 8,16,32, and 64-bit microcontrollers (MCUs) and MPUs, ensuring faster design, debugging and verification processes for embedded designers.

Microchip’s Strong Portfolio Aids Prospect

The latest move bodes well with MCHP’s commitment to strengthening its overall portfolio to boost customer momentum across various end markets.

Microchip’s expanding portfolio in the space domain has been a major growth driver. The company launched the PIC64 High-Performance Spaceflight Computing (PIC64-HPSC) microprocessors, featuring radiation- and fault-tolerant RISC-V CPUs with AI/ML capabilities tailored for autonomous and deep-space missions alongside a robust ecosystem for integrated space system solutions.

MCHP’s consistent strength in its microcontroller business is noteworthy. In the fourth quarter of fiscal 2024, Microchip released the PIC16F13145 family of MCUs, featuring a Configurable Logic Block (CLB) module to provide customized hardware solutions and reduce reliance on external logic components.

In June, MCHP launched MPLAB Extensions for VS Code, integrating MPLAB X IDE capabilities into Microsoft Visual Studio Code and enhancing embedded development with Microchip microcontrollers and DSPs while expanding compatibility and functionality for developers.

MCHP Suffers From Persistent Headwinds

Despite MCHP’s robust portfolio across various end markets, persistent inflationary pressures and high interest rates have resulted in a weak macro environment.

Microchip experienced a significant inventory correction, which resulted in a 40.6% year-over-year decline in the top line to $1.33 billion in the fiscal fourth quarter. The distribution channels also reduced their inventory levels, which have negatively impacted the company’s top line.

These factors have hurt MCHP’s performance in the year-to-date period, with shares returning 2.4% against the Zacks Computer & Technology sector’s surge of 29.6%.

Microchip expects net sales to be $1.22-$1.26 billion for first-quarter fiscal 2025. Non-GAAP earnings are anticipated between 48 cents per share and 56 cents.

The Zacks Consensus Estimate for revenues is pegged at $1.24 billion, indicating a 45.75% year-over-year decline. The consensus mark for earnings remained unchanged at 52 cents in the past 30 days.

Zacks Rank & Stocks to Consider

Currently, Microchip carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Amphenol (APH - Free Report) , Camtek (CAMT - Free Report) and Dell Technologies (DELL - Free Report) , each sporting a Zacks Rank #1(Strong Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here

Amphenol’s shares have gained 38.5% in the year-to-date period. The long-term earnings growth rate for APH is pegged at 12.69%. 

Camtek’s shares have surged 97.1% in the year-to-date period. The long-term earnings growth rate for CAMT is currently projected at 19.8%. 

Shares of Dell Technologies have declined 90.5% in the year-to-date period. The long-term earnings growth rate for DELL is pegged at 11.79%.

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