10 Most Oversold Semiconductor Stocks in 2024

5. Microchip Technology, Inc. (NASDAQ:MCHP)

Share price return in 2024: -34%

Number of Hedge Fund Holders: 44

Microchip Technology, Inc. (NASDAQ:MCHP) specializes in manufacturing embedded control solutions, including microcontrollers, mixed-signal, analog, and Flash-IP integrated circuits. The company generates approximately 18%-20% of its revenue from the Data Center & Computing end market. It offers a comprehensive portfolio of data center solutions designed to enhance server storage performance, reliability, and security, while also reducing overall power consumption. These solutions include Flashtec NVMe controllers, 24G SAS technology-based SmartRoc products for storage, and PCIe Gen 5 technology products for high bandwidth and flexibility in data centers.

In 2024, Microchip Technology, Inc. (NASDAQ:MCHP) experienced a 34% decline in its share price, mainly due to continued revenue growth pressures. The company faced weaker demand across its end markets, particularly in the industrial and automotive sectors. It also dealt with inventory build-up at customers, as they remained cautious amid a weak macro environment for manufacturing, high interest rates, very short lead times, and an uncertain business outlook.

At the beginning of December 2024, Microchip Technology, Inc. (NASDAQ:MCHP) announced a restructuring plan and updated its guidance in response to the excess inventory and overcapacity situation. While the company now expects its December 2024 quarter revenue to be at the lower end of their guidance, they also announced the closure of their Tempe wafer fabrication facility (fab) by September 2025. Although this move will result in $90 million in annual cash savings, it is overall negative for the near-term outlook due to the pressure on the business and the time required to ramp up capacity during recovery periods. The company has seen its share price rise by around 11% so far in 2025.