Fourteen Days, Then a Fab Closed

The Form 8-K that Microchip Technology filed on November 20, 2024 covered an event two days earlier and ran to a single paragraph of substance. Ganesh Moorthy had retired as chief executive, president and director. In his place the board had elected the company's former chief executive, Steve Sanghi, age 69, to serve as interim chief executive and president, effective immediately. He was already chair. The board then shrank itself from seven directors to six.

The word doing the work in that filing is interim.

Sanghi had run Microchip as chief executive from October 1991 until March 1, 2021 - nearly thirty years - and as president from August 1990 to February 2016. He handed the job to Moorthy in a planned succession, moved to executive chair, and took a 40 percent pay cut to $483,556.82 to do it. In August 2024 he stepped back again, from executive chair to plain chair. Three months later the board undid all of it.

The numbers explain why. Microchip's June 2023 quarter produced net sales of $2.289 billion. The June 2024 quarter produced $1.241 billion, down 45.8 percent year over year. By the December 2024 quarter - the first Sanghi owned - sales were $1.026 billion and the company posted a GAAP net loss of $53.6 million.

Inventory stood at 266 days.

Fourteen Days To A Closure

He did not wait for a quarter to end. On December 2, 2024, fourteen days after the board handed him the company, Microchip announced it was closing manufacturing at Fab 2, its wafer fabrication plant in Tempe, Arizona. The filing's reasoning is unsentimental: inventory was high, and the Oregon and Colorado factories already ran many of the same process technologies with clean-room space to expand.

That was an opening move, not a plan. The plan landed on March 3, 2025, and it was much larger than one fab. Microchip disclosed that Fab 2 would shut in May 2025, several months earlier than announced, and that it was simultaneously cutting headcount at Fab 4 in Gresham, Oregon, Fab 5 in Colorado Springs and its back-end plant in the Philippines, plus business units and support groups. The total came to approximately 2,000 employees and $30 million to $40 million in severance and related costs.

Weeks later the company went to the market with a mandatory convertible preferred offering and cut net debt by roughly $1.30 billion. The price of that repair shows up every quarter since as a $27.8 million preferred dividend standing ahead of the common.

What He Said At The Bottom

Executives rarely name a bottom while they are standing in it. Sanghi did, and the filings record both the flinch and the call.

In February 2025 he was still describing the ground rather than the horizon: "Our December quarter performance reflects the need for the decisive steps we are taking to realign our business, as revenue declined to $1.026 billion and inventory levels reached 266 days." He listed what had already started - manufacturing footprint, channel strategy, customer engagement - and set the tempo - "we are taking a methodical yet urgent approach to evaluating all aspects of our business" - before guiding the March quarter to between $920.0 million and $1.000 billion.

That is a chief executive telling shareholders the next quarter would be worse than the one he had just apologised for.

It was. March 2025 net sales came in at $970.5 million, with a GAAP operating loss of $100.3 million and a net loss attributable to common stockholders of $156.8 million. Fiscal 2025 closed at $4.402 billion, down 42.3 percent.

Three months after that, on May 8, 2025, he put a stake in the ground: "Our March quarter revenue of $970.5 million exceeded the midpoint of our guidance, and we believe marks the bottom of this prolonged industry down cycle for Microchip." The evidence he offered for the biggest call of his second tenure was a single ratio. In the March quarter, he said, "we achieved our first positive book-to-bill ratio in nearly three years" - and April bookings, he added, ran higher than any month inside that quarter.

Book-to-bill is a thin plank to stand a company on. The quarters since have not broken it.

The Numbers That Followed

June 2025: net sales of $1.0755 billion, up 10.8 percent sequentially and ahead of guidance that had already been revised once. Inventory dollars down $124.4 million in three months; balance-sheet inventory days down to 214 from the 266 of two quarters earlier. His framing was that Microchip was "emerging from the prolonged industry downturn with enhanced operational capabilities and a strengthened financial position."

June 2026: net sales of $1.485 billion, up 38.0 percent year over year and 13.2 percent sequentially, above the high end of guidance. GAAP earnings of $0.37 per diluted share against a loss of $0.09 a year before. Non-GAAP gross margin of 63.8 percent against 52.0 percent in the trough quarter. Inventory days at 175. Another $170 million of net debt gone.

He also disclosed a number that has nothing to do with the cycle and everything to do with what Microchip sells next: PCIe Gen6 connectivity design wins doubled sequentially, "from six programs at the end of the March quarter to 12 programs exiting the June quarter" - momentum, he said, in data center and connectivity applications.

Twelve programs is not a business. It is a claim on one.

The Bill For The Recovery

The recovery has an itemised cost and the filings do not hide it. Two thousand jobs. A fab in Tempe listed as available for sale. A preferred instrument that permanently outranks the common dividend. Sanghi's own base salary was set at $957,443 on his return, then reduced 20 percent under the executive salary reduction programme he was imposing on everyone else.

The proxy statement filed on July 6, 2026 lists him as chair of the board, chief executive and president from November 2024 to present, age 70, a director since August 1990. Its education entries are an M.S. in electrical and computer engineering from the University of Massachusetts and a B.S. in electronics and communication from Punjab University. He sits on Intel's board and chairs Impinj's.

At the annual meeting on August 18, 2026, 407,175,970 shares were voted for his re-election and 37,235,300 against - not a revolt, but the third-thinnest margin of support among the seven directors on the ballot.

The word interim has quietly left the releases. What has not left is the question the November 2024 filing reopened. Microchip found its way from $970.5 million a quarter back to $1.485 billion with a 70-year-old in the chair he first occupied in 1991, running a nine-point plan he wrote himself. The company has not said who runs it next.