Did Microchip’s (MCHP) New IGBT7 Power Modules Just Shift Its High-Power Market Strategy?

• On September 16, 2025, Microchip Technology announced a new family of DualPack 3 power modules featuring advanced IGBT7 technology in six high-current variants for industrial drives, renewables, traction, energy storage, and agricultural vehicles.
• This launch positions Microchip as a direct alternative to existing industry-standard packages, offering up to 15-20% reduction in power losses and boosting supply chain flexibility for demanding high-power applications.
• We’ll explore how the advanced IGBT7 technology in Microchip’s new DualPack 3 modules could shape the company’s future trajectory.

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Microchip Technology Investment Narrative Recap

To back Microchip Technology as a shareholder, you need conviction in its ability to regain growth as industrial and electrification trends rebound, while managing through an uneven recovery and persistently high inventory. The unveiling of DualPack 3 power modules using IGBT7 technology is a product development, but does not materially change the most important near-term catalyst, normalizing inventory levels to restore gross margins, or reduce the main risk around elevated factory underutilization and debt-related pressures.

Of recent company announcements, management’s Q1 FY2026 earnings report is most relevant, highlighting the ongoing struggle with revenue declines and negative earnings. These results underscore that, while innovation like the DP3 module adds to the portfolio, significant financial constraints persist and must be addressed before product-driven upside can accelerate.

However, investors should also be mindful of Microchip’s continued high financial leverage and the impact this could have on future capital allocation...

Read the full narrative on Microchip Technology (it's free!)

Microchip Technology's outlook anticipates $6.6 billion in revenue and $1.4 billion in earnings by 2028. This is based on analysts' assumptions of 15.9% annual revenue growth and an earnings increase of $1.58 billion from current earnings of -$178.4 million.

Uncover how Microchip Technology's forecasts yield a $76.92 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Seven fair value estimates from the Simply Wall St Community range from US$22.39 to US$90 per share, spanning a wide spectrum of expectations for Microchip Technology’s worth. While some see opportunity, ongoing elevated inventory and factory underutilization charges could weigh on profitability, prompting you to compare several viewpoints before making decisions.

Explore 7 other fair value estimates on Microchip Technology - why the stock might be worth as much as 40% more than the current price!

Build Your Own Microchip Technology Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Microchip Technology research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Microchip Technology research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Microchip Technology's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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