U.S. semiconductor maker Microchip Technology raised its forecast for third-quarter net sales on Monday, citing strong customer bookings and a broad-based recovery across end markets, sending its shares up 5.6% in after-hours trading.
The company said it now expects net sales of about $1.19 billion for the third quarter of fiscal 2026, exceeding its previous forecast range of $1.11 billion to $1.15 billion issued in November. In early December, Microchip had already indicated that sales were likely to come in at the upper end of that range.
Microchip has been benefiting from a gradual rebound in demand as customers work through excess semiconductor inventories accumulated during the pandemic, which had weighed heavily on orders in recent quarters.
“Our bookings activity was very strong in the December quarter despite a holiday-filled period,” Chief Executive Steve Sanghi said. He added that the company’s backlog for the March quarter started at a significantly higher level than the December quarter, signaling improved visibility for future demand.
The company also said it has made progress in reducing internal inventory levels, a move expected to lower inventory-related write-offs. At the same time, Microchip is preparing to ramp up factory production in the March quarter to reduce under-utilization charges as demand improves.
Microchip Technology is scheduled to report its fiscal third-quarter results on February 5.