MCHP

Microchip designs and manufactures 8-, 16- and 32-bit microcontrollers alongside analog semiconductors that control everything from automotive systems to industrial equipment. The company owns the entire value chain from wafer fabrication to final test, giving it better gross margins and supply chain control than fabless competitors during chip shortages. Management expects the current inventory correction in industrial and automotive end markets to bottom in Q2 2024, setting up for a recovery cycle as customers rebuild depleted channel inventory. Trading at 29.6x forward earnings with 55% gross margins, MCHP offers leverage to the embedded processing recovery while maintaining pricing power through its integrated manufacturing model.