Source: Microchip
By Bolaji Ojo
Microchip Technology has put an end to months of speculation about its leadership, announcing Thursday that Steve Sanghi will remain as president and CEO on a permanent basis.
The decision, detailed in a company press release, marks a pivotal moment for the Chandler, Arizona-based microcontroller giant, which has been grappling with severe financial headwinds and leadership instability since late last year.
Sanghi’s return to the top job, after previously retiring in 2021 following nearly three decades at the helm, is seen as a bid to restore stability and confidence among customers, employees, suppliers, and investors.
Sanghi’s leadership tenure at Microchip is the stuff of semiconductor industry legend. He first took the reins in 1991, guiding the company from a struggling spinoff into one of the world’s leading suppliers of embedded control solutions. Under his stewardship, Microchip’s market capitalization soared from just $10 million to $44 billion, and the company posted an extraordinary 121 consecutive profitable quarters. Sanghi stepped down as CEO in 2021, handing the role to Ganesh Moorthy, but was called back in November 2024 as interim CEO following Moorthy’s abrupt departure amid mounting operational and financial pressures.
The decision to make Sanghi’s role permanent was announced in a press release Thursday, in which Sanghi expressed both his sense of duty and optimism for the company’s future. “I have been a leader of Microchip for over 30 years and look forward to continuing to serve the company on a long-term basis,” Sanghi said. “I am honored to continue as Microchip’s CEO and President on a permanent basis.”
The company’s board echoed this sentiment, with lead independent director Matthew Chapman stating: “The Board is delighted that Steve has agreed to continue as CEO and president on a permanent basis. We believe his deep knowledge of the company, proven leadership, and industry expertise will provide the stability and strategic focus Microchip needs at this critical juncture.”
Financial challenges
The context for this leadership decision is stark. Microchip’s financial results for fiscal 2025 paint a sobering picture of the challenges facing the company. Net sales for the year plunged 42.3 percent year-over-year, to $4.4 billion, down from $7.6 billion, in the previous year. The fourth quarter alone saw a 26.8 percent drop in sales, to $970.5 million, from the same period last year.
The company reported a GAAP net loss of $2.7 million for the year, with operating income falling to just 6.7 percent of net sales, compared to 33.7 percent in the prior year. Gross profit margins contracted sharply, and research and development, as well as selling, general, and administrative expenses, increased as a percentage of sales, further squeezing margins. These financial pressures have been compounded by high inventory levels, softening demand, particularly in the industrial and automotive sectors, and the need to take underutilization charges and inventory reserve write-downs. In response, Microchip announced layoffs affecting approximately 2,000 employees earlier this year as part of a broader restructuring effort.
The company’s stock price has mirrored these woes, tumbling more than 50 percent over the past twelve months and underperforming the broader market. The leadership vacuum created by Moorthy’s exit and the subsequent interim period only added to the uncertainty, with customers, employees, and suppliers all seeking reassurance about Microchip’s strategic direction.
Against this backdrop, the board’s move to retain Sanghi is widely interpreted as a pragmatic bid for stability. The failed succession plan and abrupt leadership changes had unsettled both the executive team and shareholders, raising questions about the company’s long-term direction and its ability to execute a credible recovery plan. By keeping Sanghi in the top job, the board is betting on his deep institutional knowledge, industry relationships, and proven crisis management skills to steer Microchip through its current turbulence.
Sanghi’s immediate priorities are clear. He must execute the company’s recovery plan, rebuild the executive team, and restore shareholder confidence in Microchip’s leadership and succession process. While Sanghi’s leadership is essential for the immediate future, the company must also develop a more robust succession pipeline to avoid repeating the turmoil of the past year. “We are confident that Steve’s leadership will not only stabilize the company but also position us for renewed growth and innovation,” Chapman said.
Despite its recent financial setbacks, Microchip remains a global powerhouse in embedded control solutions, with a product portfolio that includes 8-bit, 16-bit, and 32-bit microcontrollers, analog and interface products, wireless solutions, and memory devices. The company serves approximately 109,000 customers worldwide, with a particularly strong presence in the automotive, industrial, and defense sectors.
Microchip’s strategy of continuous innovation and customer focus has helped it maintain a significant share of the global microcontroller market, which analysts project will grow from $27.7 billion in 2025 to nearly $45 billion by 2029. The company’s ongoing investments in IoT, wireless communication, and security solutions have positioned it as a key player in the digital transformation of embedded systems, even as it works to recover from its recent downturn.
Market reaction to the news of Sanghi’s permanent appointment is expected to be positive. Analysts and industry observers note that the move removes a major source of uncertainty at a critical juncture for the company. Investors are likely to cheer Sanghi’s return, given his operational discipline and track record of successfully navigating previous crises, including the 2008 financial crisis and several major acquisitions.
Still, challenges remain. Sanghi, who is approaching his 70th birthday, is expected to serve as CEO for only a few years. This should give the company enough time, the board hopes, to recover from its revenue crash, rebuild its executive team, and lay the groundwork for a smoother leadership transition in the future. The company must also contend with ongoing macroeconomic uncertainty, evolving customer demand, and intense competition in the semiconductor industry.
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Bolaji Ojo is founder and editor-in-chief of TechSplicit. He can be reached at bojo@techsplicit.com.
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