Overview
- Microchip reported a roughly 98% year-over-year increase in data-center revenue in its most recent quarter as overall net sales rose to $1.485 billion.
- The company told investors it expects about $1 billion in total data-center revenue for calendar 2026, a large jump from last year’s data-center base.
- Shipments of PCIe Gen 6 switches and CXL 3.1 retimers were the primary drivers of the surge because they solve high-bandwidth connectivity bottlenecks inside AI-scale data centers.
- By quarter end the firm had expanded its set of PCIe Gen 6 connectivity programs to 12 and reported stronger bookings than shipments, which helped drive a sharp profit recovery.
- If adoption continues, Microchip’s scale-up could raise margins and reshape the company’s profile, but growth will depend on hyperscaler spending and competition in high-speed connectivity.