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Microchip reports return to revenue growth and strengthening book-to-bill ratio
Friday, February 6, 2026 at 08:08 AM
Microchip reported December quarter revenue of $1.186 billion, marking a 4% sequential increase and the first year-over-year growth after eight quarters of decline. The company signaled a recovery in the semiconductor supply chain with a book-to-bill ratio significantly above 1 and positive backlog strength extending through late 2026.
Context
Microchip Technology has officially pivoted toward recovery, reporting its first year-over-year revenue growth after eight consecutive quarters of decline. For the quarter ending December 2026, the company posted revenue of $1.186 billion, representing a 4% sequential increase and a 15.6% year-over-year gain that exceeded high-end guidance. Although total revenue remains 48% below its previous historical peak, the bottoming process that began in early 2025 appears complete, supported by a resilient 60.5% gross margin.
The forward-looking outlook is bolstered by a book-to-bill ratio that moved well above 1 during the quarter, indicating that new orders are now significantly outpacing shipments. Management highlighted strengthening inventory trends and a backlog that extends through December 2026, providing clear visibility into the coming year. As the semiconductor supply chain moves past a protracted destocking phase, Microchip Technology expects continued sequential growth in the March quarter, signaling a sustained return to demand-driven expansion.
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