February 11, 2025 /SemiMedia/ — Microchip Technology said it expects fourth-quarter revenue and profit to fall short of expectations, as automotive customers continue to reduce excess inventory amid weak demand.

Automakers stockpiled chips during the pandemic to mitigate supply chain disruptions but are now facing prolonged inventory adjustments due to slowing end-market demand. Analysts anticipate the weakness in the automotive chip sector to persist through the first half of the year.

"While customers and channel partners have been aggressively cutting inventory, we believe the correction cycle is not yet complete," CEO Steve Sanghi said. "We are conducting a comprehensive business review and implementing necessary measures to strengthen our competitive position."

For the third quarter ended Dec. 31, 2024, Microchip reported revenue of $1.03 billion, down 42% year-over-year. The company expects fourth-quarter revenue to be between $920 million and $1 billion.