Despite Strong Bookings, Microchip Sees Uncertainty in Business

- Advertisement -
  • Microchip expects that its capital expenditures for fiscal 2021 will be reduced to about $50 million to $70 million
  • The company said that the strong bookings may be a result of customer concerns about supply chain disruptions due to the COVID-19 virus

Microchip Technology Incorporated, a provider of smart, connected and secure embedded control solutions, has provided an update on its expected March 2020 quarter net sales and the current business environment. Microchip announced that its net sales for the
quarter ending 31 March 2020 is expected to be up about three per cent sequentially versus its revised guidance provided on second March 2020 of about flat sequentially.

“With millions of job losses, customer factories shutting down and weakening economic activity, we are taking actions to reduce expenses and capital expenditures to prepare for these conditions,” stated Steve Sanghi, Microchip’s CEO.

Bookings may be a result of customer concerns

The company informed that it has received record bookings for the March 2020 quarter and that its backlog for the June 2020 quarter is up about nine per cent from the March 2020 quarter backlog at the same point in time. However, the company believes that the strength in bookings may be a result of customer concerns about supply chain disruptions due to the COVID-19 virus.

- Advertisement -

“With economies around the world contracting rapidly, with millions of people getting laid off and with customer factory closures due to “shelter in place” ordinances in various countries, we believe that product demand is likely to weaken significantly,” read Microchip’s official statement.

“While we see strong bookings and backlog right now, we also see a very high degree of uncertainly in our business due to the impact of the COVID-19 virus,” added Sanghi.

Cuts in salary as measures

Microchip is proactively taking a series of actions to lower its cost structure. Microchip’s CEO, president and other executive staff members will take a 20 per cent salary cut effective on 20 April 2020 while the rest of the non-factory employees in the company will take a 10 per cent salary cut.

The salary cuts will be in addition to the reduction of cash bonuses and other discretionary expenses. The cost reduction actions in our U.S. factories will vary with some employees taking salary cuts and others taking rotating time off depending on the factory loading levels for various locations.

“Cost reduction actions in our non-U.S. locations will depend on local law requirements including obtaining works council approval in certain jurisdictions and employee consent for salary cuts in other jurisdictions. The Microchip board of directors will also take a 20 per cent cut in their cash compensation,” read Microchip’s official statement.

- Advertisement -

Most Popular Articles

Mukul Yudhveer Singh
Mukul Yudhveer Singh
Mukul Yudhveer Singh is an Editor at EFY. He’s an experienced business journalist who is both an enthusiast and a cynic of technology. Believes in data, as well as hunch-based journalism. He defines journalism as- reporting facts which help the audience take their own decisions, not ones that influence them!

Infineon, Stellantis Partner To Advance Next-Gen Vehicle Power

0
With a dedicated Joint Power Lab and secured supply agreements, the partnership is set to drive transformative advancements in EV performance, cost-effectiveness, and the...

Audi Launches New EV Brand In China, Drops 4-Ring Logo

0
On Thursday, Audi introduced a new electric vehicle brand in China, branding the cars solely with the name 'AUDI' instead of its traditional four-ring...
IIT Bhubaneswar

IIT Bhubaneswar Partners MOSart Labs To Boost Engineering Skills In Chip Industry

0
The aim is to help students with essential skills in areas such as very-large-scale integration (VLSI), semiconductor technology, analog and digital design, validation, and...
Jaguar concept EV

JLR Highlights Its Biggest Reinvention With The Concept Car Jaguar Design Vision

0
The four-door GT is anticipated to be Jaguar's most powerful model to date. Its targeted range is approximately 430 miles (700 kilometers), and its...

ISE Labs Expands With New OSAT Facility In Mexico

0
Turbocharging its growth in North America’s tech hub, ISE Labs is set to build an OSAT semiconductor facility in Jalisco, Mexico, eyeing to create...

“Adoption Of IoT-Enabled SMT Machines Is Still In Early Phases” – Pradeep Tandon, Director...

0
While electronics are becoming smarter through the Internet of Things, is electronics manufacturing following suit? Pradeep Tandon, Director for India, Middle East, and SAARC...
Dr Yashodhan P. Gokhale, Vice President for Battery Technology, JSW Energy

Charge Forward: High-Voltage Batteries And MSMEs Can Fuel India’s EV Revolution

0
A nuanced explanation of low- and high-voltage EV batteries by Dr Gokhale, Vice President for Battery Technology at JSW Energy, illuminates their advancements and...
Sanjay Gupta, CDO & Global Head of Engineering, L&T Semiconductor Technologies

Can MSMEs Contribute And Profit From The Semicon Boom?

0
Semiconductor manufacturing often requires significant investment, typically feasible only for governments or large corporations. But are there opportunities for MSMEs as well? We spoke...
N.P. Ramesh, COO and Co-Founder, Orb Energy

“We Ensured Customers’ Monthly EMI Would Be Equal To Or Less Than Their Electricity...

0
In a conversation with Nitisha from EFY, N.P. Ramesh of Orb Energy outlines the early financing challenges customers faced. He explains how Orb Energy’s...

“Government Policy Should Equitably Address All Electric Vehicles: Extend Subsidies To Retrofits Or Remove...

0
Aryaman Raghuvanshi from EFY engages with Pramod Narendra, Head of Brand Management and Retail Network at Starya Mobility, to explore the overlooked potential of...

Wireless Light-Based Communication With Velmenni’s Technology

0
Velmenni is at the forefront of wireless communication innovation with its pioneering light-based technologies, Li-Fi and LC Link. Founded by Deepak Solanki in October 2014...

Harnessing AI Technology For Efficient Pest Management

0
AI-Genix, an agri-tech startup, is transforming pest management for farmers through advanced AI-enabled systems that precisely target harmful pests. In an industry where pesticides and...

One Charger To Charge All Your Devices

0
Now, there is no need to carry different chargers for different products. This Bhubaneswar startup has launched a universal 65W charger using GaN technology...

Karnataka Government Initiative Promises ₹5M To Tech Startups

0
Boosting innovation and entrepreneurship across the state’s vibrant ecosystem, Karnataka launched Elevate 2024 and KAN, offering grants up to ₹5 million for startups. On Tuesday,...

CastNX Tech Startup Secures ₹232M For Power Electronics Growth

0
Eyeing to boost R&D and produce 100,000 variable frequency drives by 2026, Indian power electronics startup CastNX has secured ₹232.2 million from Plutus Investments. CastNX...

Industry's Buzz

Learn From Leaders

Startups