Microchip Boosts Aerospace Portfolio With New Launch

Microchip Technology MCHP is expanding its footprint in the aerospace and defense industry by introducing the SAMD21RT, a radiation-tolerant 32-bit microcontroller (MCU) based on the Arm Cortex-M0+ architecture.
Designed to meet the stringent requirements of space missions, SAMD21RT is available in a compact 10 mm x 10 mm 64-pin ceramic and plastic package featuring 128 KB Flash and 16 KB SRAM.
This high-speed microcontroller runs at up to 48 MHz and integrates multiple analog functions, including a 20-channel Analog-to-Digital Converter, a Digital-to-Analog Converter and analog comparators.
The SAMD21RT has a broad temperature range from -40°C to 125°C, offers Total Ionizing Dose (TID) capability up to 50 krad and provides Single Event Latch-up (SEL) immunity up to 78 MeV.cm/mg. It also has low-power features like idle and standby sleep modes, ensuring compatibility with existing SAMD21 MCUs.

As part of Microchip's space system solution, the SAMD21RT also contributes to missions like the Artemis program, Space Launch System, Orion Spacecraft, Lunar Gateway, Lunar Lander and next-generation spacesuits, solidifying Microchip's position in space exploration.

Microchip's Strong Portfolio Aids Prospect

The latest move bodes well with MCHP's commitment to strengthen its overall portfolio to boost its customer momentum across various end markets.
Further expanding its portfolio in the space domain, Microchip recently introduced a new family of Radiation-Tolerant LE50-28 isolated DC-DC 50W power converters to meet the growing demands of the Low-Earth Orbit market for reliable, cost-effective and configurable space-grade solutions.
Microchip also introduced the RT PolarFire SoC FPGA, featuring real-time Linux capability and RISC-V-based microprocessor subsystem, transforming space electronics with enhanced performance, reliability, and power efficiency.
Expanding MCHP's Trust Portfolio platform has been noteworthy. In fourth-quarter fiscal 2024, Microchip expanded its TrustFLEX family with CEC1736 real-time platform root of trust devices, offering simplified enablement from concept to production across diverse applications using the Trust Platform Design Suite tool.
Despite MCHP's robust portfolio, persistent inflationary pressures and high interest rates have resulted in a weak macro environment.
Microchip also experienced a significant inventory correction, which resulted in a 40.6% year-over-year decline in the top line to $1.33 billion in the fiscal fourth quarter. The distribution channels also reduced their inventory levels, which have negatively impacted the company's top line.
Microchip expects net sales to be $1.22-$1.26 billion for the first quarter of fiscal 2025. Non-GAAP earnings are anticipated between 48 cents per share and 56 cents.
The Zacks Consensus Estimate for revenues is pegged at $1.24 billion, indicating a 45.74% year-over-year decline. The consensus mark for earnings is pegged at 53 cents per share, suggesting a 67.68% year-over-year decline.

Zacks Rank & Stocks to Consider

Currently, Microchip carries a Zacks Rank #3 (Hold). 

The company's shares have increased 4.5% year to date compared with the Zacks Computer & Technology sector's rise of 15.8%.
Some better-ranked stocks in the broader technology sector are Salesforce CRM, CrowdStrike CRWD and Intuit INTU, each carrying a Zacks Rank #2 (Buy) at present.

Shares of Salesforce have gained 8.2% in the year-to-date period. The long-term earnings growth rate for CRM is 17.45%. 

Shares of CrowdStrike have gained 32.8% in the year-to-date period. The long-term earnings growth rate for CRWD is currently projected at 22.31%. 

Shares of Intuit have gained 4.8% in the year-to-date period. The long-term earnings growth rate for INTU is 14.57%

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