Semiconductor maker Microchip Technology Inc on Wednesday cut its outlook for third-quarter revenue, citing an industry-wide correction and weak demand, and its shares fell 4.7 percent. The company, based in Chandler, Arizona, said it now sees third-quarter net sales to be down about 7 percent from the second quarter, when it posted sales of $220.7 million. Microchip in October had forecast that sales for its fiscal third quarter ending in December would be flat with its second-quarter sales.
"The ongoing inventory correction in the semiconductor industry, coupled with weak end demand, has resulted in lower bookings and turns than the levels required to meet our original guidance," President and Chief Executive Steve Sanghi said in a statement.
"We have reduced inventory levels quite substantially in the last six quarters. We believe this will allow moderate inventory growth without necessitating significant changes in manufacturing capacity."
Shares of Microchip fell to $26.85 in pre-market trade on Inet, down from a close of $28.18 on Nasdaq on Tuesday.
Microchip provided no update on its outlook for third-quarter earnings. In October it had said it saw third-quarter net income flat with its second-quarter results.
The company said it would release third-quarter results on January 25.