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MCHP, Microchip Technology Incorporated

Semiconductors asset-light Cyclical

With over 35 years of technology leadership, our broad product portfolio offers a Total System Solution for our customers that can provide a large portion of the silicon requirements in their applications.

We develop, manufacture and sell smart, connected and secure embedded control solutions used by our customers for a wide variety of applications.

FPGAs are programmable integrated circuits that are used to implement complex logic functions and can be re-programmed at any time, allowing for multiple implementations and revisions during or after the customer system is manufactured.

Latest annual: FY2026 10-K

MCHP · Microchip Technology Incorporated

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2026

$4.7B

+7.1% YoY · −3% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $4.7B 5-yr avg $6.4B

Gross margin 58% 5-yr avg 62%

Operating margin 10.4% 5-yr avg 23.0%

ROIC 4% 5-yr avg 10%

Owner-earnings margin 18% 5-yr avg 29%

Free cash flow margin 18% 5-yr avg 29%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Mixed-signal Microcontrollers (50%), Analog (28%) and Other (22%).
Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 61% and operating margin about 13% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The margin is cyclical, swinging between 6.7% and 37% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. Inventory runs near 13% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on process leadership and the capex cycle. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 7%, above 15% in 2 of 8 years). The steadier read is owner earnings: roughly 31% of revenue reaches owners as cash, consistently. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 3 lines, the largest Mixed-signal Microcontrollers at 50%.

Revenue by product line, FY2026

Mixed-signal Microcontrollers50%$2.4B
Analog28%$1.3B
Other22%$1.0B

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2026

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	2026’26	TTMTTMMar 2026
											Income statement
$3.4B	$4.0B	$5.3B	$5.3B	$5.4B	$6.8B	$8.4B	$7.6B	$4.4B	$4.7B	$4.7B	RevenueRevenue
52%	61%	55%	61%	62%	65%	68%	65%	56%	58%	58%	Gross marginGross mgn
15%	11%	13%	13%	11%	11%	9%	10%	14%	14%	14%	SG&A / revenueSG&A/rev
16%	13%	15%	17%	15%	15%	13%	14%	22%	23%	23%	R&D / revenueR&D/rev
$276M	$936M	$714M	$647M	$998M	$1.8B	$3.1B	$2.6B	$296M	$490M	$490M	Operating incomeOp. inc.
8.1%	23.5%	13.4%	12.3%	18.4%	27.1%	36.9%	33.7%	6.7%	10.4%	10.4%	Operating marginOp. mgn
$165M	$255M	$356M	$571M	$349M	$1.3B	$2.2B	$1.9B	($500K)	$230M	$230M	Net incomeNet inc.
—	—	—	—	-3%	13%	23%	19%	—	16%	16%	Effective tax rateTax rate
											Cash flow & returns
$1.1B	$1.4B	$1.7B	$1.5B	$1.9B	$2.8B	$3.6B	$2.9B	$898M	$962M	$962M	Operating cash flowOp. cash
$469M	$616M	$876M	$1.2B	$1.2B	$1.1B	$998M	$880M	$750M	$689M	$689M	DepreciationDeprec.
$298M	$455M	$276M	($413M)	$216M	$204M	$215M	($71M)	($32M)	($213M)	($213M)	Working capital & otherWC & other
$10M	$207M	$229M	$68M	$93M	$370M	$486M	$285M	$126M	$91M	$91M	CapexCapex
0.3%	5.2%	4.3%	1.3%	1.7%	5.4%	5.8%	3.7%	2.9%	1.9%	1.9%	Capex / revenueCapex/rev
$1.0B	$1.2B	$1.4B	$1.5B	$1.8B	$2.5B	$3.1B	$2.6B	$772M	$871M	$871M	Owner earningsOwner earn.
30.8%	30.5%	27.0%	28.0%	33.5%	36.3%	37.1%	34.2%	17.5%	18.5%	18.5%	Owner earnings marginOE mgn
$1.0B	$1.2B	$1.4B	$1.5B	$1.8B	$2.5B	$3.1B	$2.6B	$772M	$871M	$871M	Free cash flowFCF
30.8%	30.5%	27.0%	28.0%	33.5%	36.3%	37.1%	34.2%	17.5%	18.5%	18.5%	Free cash flow marginFCF mgn
$0	$0	$7.9B	$0	$0	—	—	—	—	—	$0	AcquisitionsAcquis.
—	—	—	—	—	—	—	$912M	$976M	$984M	$984M	Dividends paidDiv. paid
$0	$0	—	$0	$0	$426M	$946M	$982M	$97M	$0	—	BuybacksBuybacks
—	9%	5%	4%	—	12%	19%	17%	1%	4%	4%	ROICROIC
5%	8%	7%	10%	7%	22%	34%	29%	-0%	4%	4%	Return on equityROE
—	—	—	—	—	—	—	15%	−14%	−12%	−12%	Retained to equityRetained/eq
											Balance sheet
$1.3B	$2.2B	$431M	$403M	$282M	$319M	$234M	$320M	$772M	$240M	$246M	Cash & investmentsCash+inv
$478M	$564M	$881M	$934M	$998M	$1.1B	$1.3B	$1.1B	$690M	$895M	$895M	ReceivablesReceiv.
$417M	$476M	$712M	$686M	$665M	$854M	$1.3B	$1.3B	$1.3B	$1.0B	$1.0B	InventoryInvent.
$149M	$144M	$226M	$247M	$292M	$345M	$397M	$213M	$161M	$206M	$206M	Accounts payablePayables
$746M	$896M	$1.4B	$1.4B	$1.4B	$1.6B	$2.2B	$2.2B	$1.8B	$1.7B	$1.7B	Operating working capitalOper. WC
$2.3B	$3.4B	$2.2B	$2.2B	$2.1B	$2.5B	$3.1B	$3.0B	$3.0B	$2.4B	$2.4B	Current assetsCur. assets
$705M	$2.0B	$2.4B	$1.6B	$2.4B	$1.4B	$3.1B	$2.5B	$1.2B	$1.1B	$1.1B	Current liabilitiesCur. liab.
3.3×	1.7×	0.9×	1.4×	0.9×	1.8×	1.0×	1.2×	2.6×	2.1×	2.1×	Current ratioCurr. ratio
$2.3B	$2.3B	$6.7B	$6.7B	$6.7B	$6.7B	$6.7B	$6.7B	$6.7B	$6.7B	$6.7B	GoodwillGoodwill
$7.7B	$8.3B	$18.4B	$17.4B	$16.5B	$16.2B	$16.4B	$15.9B	$15.4B	$14.4B	$14.4B	Total assetsAssets
$3.0B	$3.1B	$10.3B	$9.5B	$8.9B	$7.7B	$6.4B	$6.0B	$5.6B	$5.5B	$5.5B	Total debtDebt
$1.6B	$872M	$9.9B	$9.1B	$8.6B	$7.4B	$6.2B	$5.7B	$4.9B	$5.3B	$5.3B	Net debt / (cash)Net debt
1.9×	4.7×	1.4×	1.3×	2.8×	7.2×	15.3×	13.0×	1.1×	2.2×	2.2×	Interest coverageInt. cov.
$3.3B	$3.3B	$5.3B	$5.6B	$5.3B	$5.9B	$6.5B	$6.7B	$7.1B	$6.4B	$6.4B	Shareholders’ equityEquity
3.8%	2.3%	3.1%	3.2%	3.6%	3.1%	2.0%	2.3%	4.1%	5.4%	5.4%	Stock comp / revenueSBC/rev
											Per share
470M	498M	500M	512M	541M	566M	557M	548M	537M	545M	545M	Shares out (diluted)Shares
$7.26	$8.00	$10.70	$10.29	$10.05	$12.05	$15.14	$13.93	$8.19	$8.64	$8.64	Revenue / shareRev/sh
$0.35	$0.51	$0.71	$1.11	$0.65	$2.27	$4.02	$3.48	$-0.00	$0.42	$0.42	EPS (diluted)EPS
$2.23	$2.44	$2.89	$2.88	$3.37	$4.37	$5.62	$4.76	$1.44	$1.60	$1.60	Owner earnings / shareOE/sh
$2.23	$2.44	$2.89	$2.88	$3.37	$4.37	$5.62	$4.76	$1.44	$1.60	$1.60	Free cash flow / shareFCF/sh
—	—	—	—	—	—	—	$1.66	$1.82	$1.80	$1.80	Dividends / shareDiv/sh
$0.02	$0.42	$0.46	$0.13	$0.17	$0.65	$0.87	$0.52	$0.23	$0.17	$0.17	Cap. spending / shareCapex/sh
$6.96	$6.59	$10.58	$10.90	$9.86	$10.42	$11.69	$12.15	$13.17	$11.80	$11.80	Book value / shareBVPS

Share counts before 2020 are restated ×2 for a stock split, so per-share figures sit on one basis.

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+2.0%/yr	−3.0%/yr
Owner earnings / share	−3.7%/yr	−13.9%/yr
EPS	+2.1%/yr	−8.2%/yr
Dividends / share	+4.2%/yr (2-yr)	+4.2%/yr (2-yr)
Capital spending / share	+25.4%/yr	−0.5%/yr
Book value / share	+6.0%/yr	+3.7%/yr

The record, charted

FY2017–2026

Each measure over its full record; the current point and the worst year marked. Share counts on the current split basis.

Share count

545Mpeak FY2022

ROIC

4%low FY2025

Gross margin

58%low FY2017

Net debt ÷ owner earnings

6.0×peak FY2019

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$871Mowner earningsvs.$230Mnet incomelow FY2025

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2026

Owner-earnings bridge

FY2022–FY2026cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business turned $230M of profit into $871M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$230M

Owner earnings$871M · 18% of revenue

	FY2026	FY2025	FY2024	FY2023	FY2022
Reported net income	$230M	($500K)	$1.9B	$2.2B	$1.3B
Depreciation & amortizationnon-cash charge added back	+$689M	+$750M	+$880M	+$998M	+$1.1B
Stock-based compensationreal costnon-cash, but a real cost	+$255M	+$180M	+$178M	+$170M	+$210M
Working capital & othertiming of cash in and out, other non-cash items	−$213M	−$32M	−$71M	+$215M	+$204M
Cash from operations	$962M	$898M	$2.9B	$3.6B	$2.8B
Capital expenditurecash put back in to keep running and to grow	−$91M	−$126M	−$285M	−$486M	−$370M
Owner earnings	$871M	$772M	$2.6B	$3.1B	$2.5B
Owner-earnings marginowner earnings ÷ revenue	18%	18%	34%	37%	36%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $255M), owner earnings is nearer $616M.

Much of fiscal 2026's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2026 10-K · source on SEC EDGAR →

Material weakness in financial controls

“We have in the past identified a material weakness in our internal controls related to accounting for income taxes and we also identified a material weakness in our internal controls related to IT system access.”

The figures below are only as sound as the controls that produced them. read the note →

Will it survive?

Can it pay its interest? 2.2×

Adequate

Operating income $490M ÷ interest expense $221M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $5.3B · 10.7× operating profit

Heavy net debt

Cash $240M − debt $5.5B

What this means
Netting $240M of cash and short-term investments against $5.5B of debt leaves $5.3B owed, about 10.7× a year's operating profit (11.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 221d

Long (60+ days)

DSO 69 + DIO 190 − DPO 38 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 5%

Below average through the cycle

8-yr median, range 1%–19%; 4% latest = NOPAT $412M ÷ invested capital $11.7B

Industry peers: median 14%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years (it ran 4% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 30%

High through the cycle

10-yr median margin, range 18%–37%; latest $871M = operating cash $962M − maintenance capex $91M

Industry peers: median 19%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 18% of revenue this year, a 30% median across 10 years. Treating stock comp as the real expense it is (less $255M of SBC) leaves $616M.
Are earnings backed by cash? 4.18×

Cash-backed

Cash from ops $962M ÷ net income $230M

In the filing’s words The filing discloses a material weakness in its financial controls — the reported numbers here, and the record built on them, are only as reliable as the controls that produced them.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 113%

Returned more than it generated

Dividends + buybacks $984M ÷ Owner Earnings $871M

What this means
The company returned more than it generated: against $871M of Owner Earnings, $984M (113%) went back to shareholders, $984M dividends, $0 buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.13×

Harvesting

Capex $91M ÷ depreciation $689M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $4.7B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.09×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $5.5B vs $1.2B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Near

A profit every year (10-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 3 of 10 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +175%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.31/share (latest year $0.42), the averaged base the calculator's gate runs on, and book value is $11.87/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2026

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 10

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 2 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 15% → 17% (3-yr avg ends)

In the filing’s words The margin has held, but the filing names price competition — the pressure is present even where the margin has absorbed it so far.

What this means
Through the cycle the operating margin held roughly steady — about 15% early, 17% lately, median 13%.
Reinvestment, incremental ROIC 12%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth −3%/yr

What this means
Owner earnings shrank about 3% a year over the record.
Worst year 2025 · 6.7% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2026 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Our ability to design, develop and timely introduce competitive products and processes - including those implementing new technologies such as AI, or complying with new governmental restrictions regarding implementation of new technologies - may be affected by how quickly we and our customers adapt to market changes dr…”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of fiscal year-end, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$2.4B

Cash & short-term investments$240M
Receivables$895M
Inventory$1.0B
Other current assets$207M

Current liabilities$1.1B

Accounts payable$206M
Other current liabilities$931M

Current ratio2.09×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.18×stricter: inventory excluded

Cash ratio0.21×strictest: cash alone against what's due

Working capital$1.2Bthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+15.6%the freshest read on whether the business is still growing

Current ratio, recent quarters1.9× → 2.1×

Deeper floors

Tangible book value($2.3B)equity stripped of goodwill & intangibles

Debt incl. operating leases$5.6B$146M of it operating leases

Deferred revenue$179Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'27$387M

'28$1.0B

'29$1.0B

'30$1.9B

'31$1.3B

Bars scaled to the largest single year.

Due in the next 12 months$387Mthe first rung: what must be repaid or rolled over within the year

Within two years$1.4Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$1.9Bin 2030the lumpiest maturity, where a refinancing, if needed, is largest

Due over the next five years$5.5Bthe near slice; the balance sheet carries $5.5B of debt in all

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$240M

One year of owner earnings (FY2026)$871M

Together, against $387M due next year2.9×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $1.1B against the $387M due in the twelve months after the Mar 31, 2026 schedule: 2.9 times it.

Maturity schedule extracted from the company’s Mar 31, 2026 annual report and reconciled to the balance-sheet debt.

How the cash was used, 2017–2026

Over the record, the business generated $18.8B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$2.0B · 10%
Dividends$2.9B · 15%
Buybacks$2.5B · 13%
Retained (debt / cash)$11.5B · 61%

Returned to owners$5.3B
32% of the owner earnings the business produced over the span, $2.9B as dividends and $2.5B as buybacks.
Average price paid for buybacks$78.03
Across the years where the filing reports a share count, 31M shares were bought for $2.5B, about $78.03 each. Year to year the price paid ranged from $73.32 (2023) to $96.50 (2025); its heaviest year, 2024, paid $82.53 ($982M).
Net change in share count16.1%
The diluted count rose from 470M to 545M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$1.80/sh
Paid in 3 of the years on record, the per-share dividend growing about 4% a year. It was never cut over the span.
Return on what it retained9%
Of the earnings it kept rather than paid out ($2.0B over the span), annual owner earnings (first three years vs last three) grew $181M, so each retained $1 added about 0.09 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$8.7B61% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$7.9Bover 10 years buying other businesses, against $2.0B of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2022	$12.8M	$9.9M	$2.5B
2023	$12.3M	$18.1M	$3.1B
2024	$9.9M	$9.0M	$2.6B
2025	$5.5M	−$15.3M	$772M
2025	$21.4M	$9.6M	$772M
2026	$40.5M	$47.2M	$871M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio698:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$255M
The slice of the business handed to employees in shares this year, 5% of revenue, equal to 52% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Microchip Technology Incorporated is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2026.

5 of the 6 tests turned up something to look into; the other 1 came back clean.

Look hereIs it less profitable than it was?23.4% vs 29.4%
The owner-earnings margin averaged 29.4% early in the record and 23.4% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid the share count rise anyway?16.1%
Diluted shares grew 16.1% over 2017–2026, even as the company spent $2.5B on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereDid debt outgrow the business?$3.0B → $5.5B
Debt rose from $3.0B to $5.5B while owner earnings went from about $1.2B to $1.4B — about 2.4 years of owner earnings in debt then, about 3.9 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereDid receivables and inventory outpace sales?26% → 41% of sales
Receivables and inventory grew from $896M to $1.9B while revenue grew 38%: working capital is climbing faster than sales (26% of revenue then, 41% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.
Look hereAre "one-time" charges a yearly habit?5 of 10 years
Management took an impairment or write-down in 5 of the last 10 years, $19M in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Semiconductors

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
MRVLMarvell Technology Inc.	$8.2B	50%	-8.7%	-2%	19%
ONON Semiconductor Corporation	$6.0B	37%	13.4%	14%	15%
QQnity Electronics Inc.	$4.8B	46%	20.1%	7%	20%
MCHPMicrochip Technology Incorporated	$4.7B	61%	15.9%	7%	31%
SWKSSkyworks Solutions Inc.	$4.1B	47%	27.8%	23%	28%
QRVOQorvo Inc.	$3.7B	40%	6.1%	3%	19%
NXTNextpower Inc.	$3.6B	26%	16.4%	59%	11%
MPWRMonolithic Power Systems Inc.	$2.8B	55%	20.6%	23%	27%
Group median	—	47%	16.1%	11%	19%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Microchip Technology Incorporated has delivered.

Today’s price $

Through the cycle, Microchip Technology Incorporated earns about $1.4B on its 30.6% median owner-earnings margin. This year’s 18.5% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.4B) Net of stock comp (−$255M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’22→’26−26%/yr

Owner-earnings growth · ’17→’26−3%/yr

Owner-earnings yield—

P/E (3-yr earnings ’24–’26)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $871M on 542M shares outstanding, per the 10-K cover, as of 2026-05-14; net debt $5.3B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh MCHP against another business →

The owners of MCHP: the meeting and the votes →

Cite: Owner Scorecard, "Microchip Technology Incorporated (MCHP), the owner's record," https://ownerscorecard.com/c/MCHP, data as of 2026-07-09.

Manual order: ← MCHB its page in the Manual MCHPP →

Industry order: ← LWLG the Semiconductors chapter MCHPP →