Tech Finance - Microchip CEO sees uncertainty amid U.S.-China trade warDate:2019-05-09 13:59:07 Posted by:franklin View:111
With no settlement on trade talks between the U.S. and China, Microchip Technology Inc. (Nasdaq: MCHP) is expecting “weaker-than-seasonal” business conditions down the road, as it reported record sales for fiscal 2019.
Steve Sanghi, Microchip’s chairman and CEO, said in recent days the rhetoric he has seen has turned more negative with 25% duties on $200 billion of Chinese goods expected to go into effect this Friday.
“Therefore, the uncertainty related to U.S.-China trade relations continues,” Sanghi said in Wednesday’s analyst call. “We continue to operate our business prudently for long-term shareholder value, and we believe that the end-market demand will continue to be stronger than the GAAP sell-in revenue in the June quarter, and that channel and customer inventory will continue to decrease.”
Sanghi said the hints he’s hearing out of Washington regarding trade talks continue to oscillate between positive and negative. Despite this, Sanghi said it’s not all bad news.
“While there is no guarantee that talks will end successfully with a settlement, we believe that any finality of such talks will remove some of the uncertainty and will have positive effects on the business,” Sanghi said. “We have seen some strength in our China business from the bottom in the March quarter and expect more strength to pick up in the second half of calendar 2019.”