Microchip Technology raised its third-quarter sales forecast on Monday, citing stronger-than-expected bookings and improving demand across markets, sending shares up 4% in premarket trading.
The company said it now expects net sales of approximately $1.19 billion for the quarter ending in December, above its prior guidance of $1.11 billion to $1.15 billion issued in November.
In early December, Microchip had projected sales near the high end of that range. The updated forecast comes as customers continue to reduce chip inventories built up during the pandemic.
“Our bookings activity was very strong in the December quarter despite a holiday filled quarter. Our March quarter starting backlog started out much better than that for the December quarter,” CEO Steve Sanghi said.
Microchip reported that it has significantly lowered internal inventory levels, a move expected to reduce write-off expenses. The company also plans to ramp up factory production in the March quarter to lessen under-utilization costs.
