Chip shortage returns as AI demand overwhelms Microchip's supply chain, delaying shipments and pressuring margins.

Microchip Technology exceeded its shipment forecast in Q3 2026 but reported renewed chip shortages due to AI customers dominating supplier factories, causing longer lead times and backlog growth. CEO Steve Sanghi highlighted that AI demand has pushed other customers aside, with some supply fixes taking up to six months. Despite strong sales growth, the company lowered its December quarter guidance amid rising supplier costs and expects margin pressure to continue temporarily. Analysts have cut price targets, but the backlog and future orders suggest the supply crunch may ease by the March quarter.

Microchip Technology shares dropped 10.02% to USD 58.35 on Pluang as of Nov 07, 2026 21:02 WIB. Despite the recent price decline, the stock remains above its 52-week low of USD 49.02. Investors show strong interest with 80% buy orders and a typical hold time of 65 days on the platform.