Microchip Technology’s Aviation Push and AI Deal Propel Shares Higher
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Microchip Technology’s Aviation Push and AI Deal Propel Shares Higher

Microchip Technology stock rallies on new electric aircraft power solution and AI acquisition.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Microchip Technology Inc. (NASDAQ: MCHP) is seeing its stock rally in pre-market trading Wednesday, up 3.49% at $89.20, following the announcement of a new integrated actuation power solution for electric aircraft and following the recent acquisition of Neuronix AI Labs. The company closed Tuesday at $86.19, up 3.18%.

Microchip Develops New Power Solution for Electric Aircraft Systems

The new power solution, meticulously designed for electric actuation systems in aircraft, shows Microchip’s commitment to innovation. It includes companion gate driver boards and Hybrid Power Drive (HPD) modules in silicon carbide (SiC) and silicon.

With its consistent footprint across different power outputs (5kVA to 20kVA), the solution offers a simplified integration into various aircraft systems, including flight controls, braking, and landing gear. This plug-and-play power solution bypasses the complex design and development of drive circuitry. It significantly reduces design time, resources, and costs, painting a promising future for Microchip in the aviation industry.

The devices are tested to DO-160 standards, which are environmental conditions and test procedures for airborne equipment. Features include shoot-through detection, short circuit, desaturation protection, Undervoltage Lockout (UVLO), and active miller clamping.

The gate driver boards use Low Voltage Differential Signaling (LVDS) for low electromagnetic interference (EMI) and good noise immunity, improving the reliability and efficiency of the actuation systems. The solution is well-suited for aviation applications and is designed to operate in harsh environments with a temperature range of -55°C to 110°C.

Microchip Recently Acquired an AI Startup

In addition to the new power solution, Microchip announced the acquisition of Neuronix AI Labs on April 15, 2024. Neuronix specializes in neural network sparsity optimization technology that enhances power efficiency and reduces the size and complexity of calculations needed for AI tasks like image classification, object detection, and semantic segmentation.

Integrating Neuronix’s technology is expected to significantly increase neural network performance efficiency and improve performance per watt in Microchip’s PolarFire FPGAs and SoCs.

The recent acquisition of Neuronix AI Labs is a strategic move that positions Microchip as a leader in power-efficient, AI-enabled edge solutions. This acquisition sets industry standards in a rapidly growing field, demonstrating Microchip’s foresight and adaptability.

Integrating Neuronix’s technology is expected to enable cost-effective, large-scale deployments of AI and ML applications in edge devices, expanding the potential market for Microchip’s products.

Microchip Technology (MHCP) Stock Price Brief

Microchip Technology has demonstrated robust performance in recent years, boasting a market capitalization of $46.58 billion and an enterprise value of $52.02 billion.

The company’s profit margin is impressive at 27.59%, with a return on assets (TTM) of 12.29% and a return on equity (TTM) of 35.19%. Microchip’s stock has consistently outperformed the S&P 500 over five years, delivering a return of 91.10%.

These strong financial indicators, coupled with analysts’ price targets ranging from $77.00 to $106, provide a solid foundation for investors to consider Microchip a potential investment.

Do you see potential in Microchip as a growth stock? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.