Company Profile
Introduction
Microchip Technology (ticker: MCHP) is an American microcontroller, memory and analog chip manufacturer.
History
In 1969, General Instrument (ticker: VSH) spun off its microelectronics division and established a wholly owned parent company. In 1989, the subsidiary was acquired by a group of venture investors and Microchip Technology became an independent company.
Areas of Expertise
Microchip Technology develops, manufactures and markets smart, connected and secure embedded control solutions in the Americas, Europe and Asia.
Initial Public Offering
Microchip Technology went public on March 19, 1993. It is up more than 500% for the year and has a market cap of more than $1 billion. The company’s initial public offering (IPO) was named one of the best performing companies of the year by Fortune magazine.
Operations
Revenue Sources
Microchip Technology’s revenue includes its Technology Licensing segment, which had revenue of $103.9 million, and its Semiconductor Products segment, which had revenue of $5.39 billion.
Key Products
Its products include microcontrollers (PIC microcontrollers, dsPIC / PIC24, PIC32), serial EEPROM, serial SRAM, KEELOQ components, radio frequency (RF) components, thermal components, power and battery management analog components, and linear , interfaces and mixed-signal components. Other interface components include USB, ZigBee/MiWi, CANbus and Ethernet.
Competitors
The main competitors are Analog Devices, Infineon Technologies, NXP Semiconductors, Renesas Electronics, STMicroelectronics and Texas Instruments.
Key acquisitions
- In April 2010, Microchip Technology acquired Silicon Storage Technology (SST).
- In May 2015, Micrel was acquired for $14.00 per share.
- In January 2016, Microchip Technology announced the acquisition of Atmel for US$3.56 billion.
- In March 2018, Microchip Technology announced that it would acquire Microsemi for US$8.35 billion. Together with Microsemi’s debts and investments, the total acquisition price reached US$10.15 billion.
- In October 2020, it announced the acquisition of New Zealand-based Tekron International Limited. Founded in 2002, Tekron specializes in manufacturing GPS and precision timekeeping devices.
Cpital market performance
Market cap
As of December 24, 2024, the company’s market value is approximately US$31.45 billion, which is considered a medium-sized listed company in the U.S. stock market.
Market Valuation
As of December 24, 2024, the company’s price-to-earnings ratio was 40.84, which is not cheap.
Cash dividend rate
As of December 24, 2024, the company’s cash dividend yield was 3.11%, which is considered a very high cash dividend distribution company in the U.S. stock market.
Stock price performance
As of December 24, 2024:
- The company’s shares have fallen 35.87% over the past year.
- The company’s stock price has only risen 11.04% in the past five years.
- The company’s stock price has risen by 17,645.45% since its listing.
Intrinsic Value
Microchip Technology Inc.’s stock was trading at $58.56 on December 24, 2024, which is well below its estimated fair value of $113.09, indicating that the company’s stock price may be undervalued based on a discounted cash flow analysis.
Financial health
Despite high debt levels and a decline in profit margins from 28.1% to 14.2%, earnings are expected to grow at an annual rate of 31.6%, beating the U.S. market’s expected growth of 15.3%. The latest product innovations in touch controllers and FPGA solutions highlight strategic advancements in key technology areas.
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