CHANDLER, Ariz. - Microchip Technology Inc . (NASDAQ:MCHP) has broadened its collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) to establish a specialized 40 nanometer (nm) manufacturing capacity at Japan Advanced Semiconductor Manufacturing, Inc. (JASM), TSMC’s subsidiary in Japan. This move is a strategic effort by Microchip to enhance the resilience of its supply chain amid global market uncertainties.
The initiative is part of a series of actions by Microchip to mitigate potential supply disruptions. These actions include increasing internal manufacturing capabilities, diversifying geographic locations, and adding redundancy through partnerships with wafer fabrication, foundry, assembly, test, and Outsourced Semiconductor Assembly and Test (OSAT) providers.
Michael Finley, Microchip's senior vice president of worldwide manufacturing and technology, emphasized the company's commitment to supply management, stating that the partnership with TSMC will bolster customers' confidence in integrating Microchip's products into their applications.
The additional wafer capacity from JASM is expected to strengthen Microchip’s ability to serve its global customer base in various markets, such as automotive, industrial, and networking applications. Rose Castanares, senior vice president of business management at TSMC North America, echoed this sentiment, highlighting the collaboration as a testament to TSMC's dedication to customer growth and innovation.
The partnership is also designed to provide a buffer against the impact of changing business conditions and natural disasters, which can disrupt supply chains.
Microchip Technology, headquartered in Chandler, Arizona, serves around 125,000 customers across diverse markets with its embedded control solutions. The company is known for its robust technical support, reliable delivery, and quality products.
The information regarding this partnership is based on a press release statement from Microchip Technology Inc.
InvestingPro Insights
In the wake of Microchip Technology Inc.'s (NASDAQ:MCHP) strategic move to strengthen its supply chain resilience through expanding its partnership with TSMC, the company's financials and market performance provide additional context for investors. With a robust market capitalization of 47.32 billion USD, Microchip showcases its substantial presence in the semiconductor industry.
One of the notable InvestingPro Tips highlights Microchip's commitment to shareholder returns, as the company has raised its dividend for 12 consecutive years, signaling confidence in its financial health and commitment to investors. Moreover, Microchip has maintained dividend payments for an impressive 23 consecutive years, underscoring its stability and reliability as an investment. These aspects are particularly relevant for investors seeking companies with a track record of consistent dividend growth.
However, investors should be aware of the challenges ahead. Analysts have revised their earnings downwards for the upcoming period, and they anticipate a sales decline in the current year. This is reflected in the company's recent performance metrics, with a quarterly revenue growth showing a decrease of 18.6%. Despite these concerns, Microchip's P/E ratio stands at 20.18, which, along with a Price / Book multiple of 6.68, suggests that the market values the company's future growth prospects.
For those looking to dive deeper into Microchip's financials and performance, additional insights are available on InvestingPro. There are 19 more InvestingPro Tips that provide a comprehensive analysis of Microchip's market position and future outlook, which can be accessed at: https://www.investing.com/pro/MCHP. To enrich your investment strategies further, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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