Microchip Technology to Close Plant, Revises Quarterly Outlook
MICROCHIP Technology, a maker of chips for cars, consumer devices and other products, said it would close a plant in Tempe, Arizona, affecting about 500 employees.
Plant Shutdown and Job Impacts
The company also said that orders have been slower than anticipated and it was revising the December quarter’s outlook to near the low end of its original forecast of about US$1.03 billion.
Reason for Plant Shutdown
Steve Sanghi, board chairman and interim chief executive officer, said on Monday (Dec 2) that the Tempe plant would be shut down in the September 2025 quarter because “inventory levels are high and the company has ample capacity in place and the ability to expand capacity in the other facilities in the future”.
Company Performance
Microchip, based in Chandler, Arizona, has been mired in a deep sales slump, with revenue projected to plunge 40 per cent this year. Sanghi, a company veteran who had previously served as CEO, returned last month to the top post, replacing Ganesh Moorthy.
CEO’s Commitment
“I want to clarify for investors that I plan to stay in this role, even though the title is interim, for as long as it is necessary, so there is no definitive timeline for my successor,” Sanghi said.
Conclusion
The closure of the Tempe plant and revision of the quarterly outlook suggest that Microchip Technology is facing significant challenges in the current market. The company’s deep sales slump and high inventory levels have led to the decision to shut down the plant, affecting 500 employees. The CEO’s commitment to staying in the role for the time being adds uncertainty to the company’s future prospects.
FAQs
Q: Why is Microchip Technology closing its plant in Tempe, Arizona?
A: The company is closing the plant due to slower-than-expected orders and high inventory levels.
Q: How many employees will be affected by the plant shutdown?
A: About 500 employees will be affected.
Q: What is Microchip Technology’s current financial outlook?
A: The company’s revenue is projected to plunge 40 per cent this year, and it has revised its quarterly outlook to near the low end of its original forecast of about US$1.03 billion.
Q: What is the future outlook for Microchip Technology?
A: The company’s deep sales slump and the plant shutdown suggest a challenging future ahead, with the CEO’s commitment to staying in the role for the time being adding to the uncertainty.
