‘No Line of Sight’ Toward Chip Shortages' End: Microchip CEO
Demand "far outpaced" the capacity improvements and increased shipments that Microchip Technology achieved in fiscal Q3 ended Dec. 31, said CEO Ganesh Moorthy on a quarterly call Thursday. Microchip draws most of its revenue from sales of microcontrollers for a…
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wide range of consumer and industrial tech applications. Its “unsupported backlog,” defined as undeliverable orders from customers unprotected by long-term supply agreements climbed significantly, compared with the unsupported backlog exiting the September quarter, he said. Despite 30% year-over-year revenue growth to $1.76 billion, “we exited the December quarter with the highest unsupported backlog ever,” said Moorthy: “We continue to experience constraints in all our internal and external factories and their related manufacturing supply chains. ... We continue to ramp our internal factories as fast as possible, and we are working closely with our supply chain partners to provide wafer foundry, assembly, test and materials to secure additional capacity wherever possible.” But judging from the magnitude of the current demand-supply imbalance, plus “the rate at which we are able to bring on new capacity, we continue to expect that we will remain supply-constrained throughout 2022 and possibly beyond that,” said the CEO. After five quarters of the semiconductor crunch and now into the sixth, “there is really no line of sight to having demand/supply coming back into some form of equilibrium,” he said.