You can’t own MicroChip Technology (MCHP) for industrial HPA like performance with organic growth, singular focus on share gains in large markets, and innovation cureves that continue to prove out.
The organic share gains are done, the second biggest revenue category is a creation of Analog Frankenstein that doesn’t grow much, and Microsemi Corp (MSCC), now at ~30% of revenue, will be dilutive to the growth rate of the entire entity. The long game of fixing vertical analog product inside a general purpose company isn’t a no brainer fix and maybe hasn’t really been done successfully in the past. Investing, healing, and re-growing individual product lines wrapped up in the MSCC mess will take some time In addition, capital intensity and taxes seem to remain as surprise factors.
Microchip Technology(MCHP) just ended a long streak of volume growth. The Question for forward-thinking semi’s analysts and PMs today; will this downturn be a shallow one and rip higher like the price actions occurring in June ’15 -or- is the long period of higher highs since ’12 coming to an end? (implying a steeper unit through-shallow recover) and lower GM% across the forward horizon as utilizations fall?