Microchip Technology Incorporated and Lattice Semiconductor Corporation are two key players in the semiconductor industry, each excelling in embedded control solutions and programmable logic devices, respectively. Both companies target overlapping markets such as communications, computing, and industrial applications, while pursuing innovation through advanced microcontrollers and FPGA technologies. In this article, I will analyze their strengths and risks to help you decide which is the more compelling investment choice today.
Table of contents
Companies Overview
I will begin the comparison between Microchip Technology Incorporated and Lattice Semiconductor Corporation by providing an overview of these two companies and their main differences.
Microchip Technology Incorporated Overview
Microchip Technology Incorporated develops, manufactures, and sells embedded control solutions globally, focusing on microcontrollers, microprocessors, and analog products. The company serves diverse sectors such as automotive, industrial, and communications, offering a broad portfolio including memory products, FPGA devices, and development tools. Headquartered in Chandler, Arizona, Microchip has a market cap of 35B USD and employs 22,300 people.
Lattice Semiconductor Corporation Overview
Lattice Semiconductor Corporation specializes in semiconductor products, mainly field programmable gate arrays and video connectivity application-specific products. It operates across Asia, Europe, and the Americas, targeting communications, computing, consumer, industrial, and automotive markets. Based in Hillsboro, Oregon, Lattice has a market cap of 10.8B USD and about 1,110 employees, focusing also on IP licensing and patent monetization.
Key similarities and differences
Both companies operate in the semiconductor industry with a global reach and focus on programmable logic devices. Microchip offers a broader product range including microcontrollers and analog components, while Lattice emphasizes FPGA families and IP licensing. Microchip has a significantly larger workforce and market capitalization, reflecting its diversified portfolio compared to Lattice’s more specialized market approach.
Income Statement Comparison
The table below compares key income statement metrics for Microchip Technology Incorporated and Lattice Semiconductor Corporation for their most recent fiscal years.
| Metric | Microchip Technology Incorporated | Lattice Semiconductor Corporation |
|---|---|---|
| Market Cap | 35B | 10.8B |
| Revenue | 4.4B | 509.4M |
| EBITDA | 1.04B | 106.9M |
| EBIT | 290.3M | 60.7M |
| Net Income | -0.5M | 61.1M |
| EPS | -0.005 | 0.44 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Microchip Technology Incorporated
Microchip Technology’s revenue and net income have declined over the 2021-2025 period, with revenue dropping by 19% overall and net income turning negative in the most recent fiscal year. Gross margin remained relatively stable at 56%, while EBIT margin held neutral. However, in 2025, revenue fell sharply by 42%, and net margin turned unfavorable, reflecting significant erosion in profitability.
Lattice Semiconductor Corporation
Lattice Semiconductor exhibited overall revenue growth of nearly 25% and net income growth of 29% over 2020-2024, with a favorable gross margin above 66% and EBIT margin near 12%. Despite a substantial one-year revenue dip of 31% in 2024, the company maintained a solid net margin of 12%. Earnings per share growth remains positive across the broader period, indicating improving fundamentals.
Which one has the stronger fundamentals?
Lattice Semiconductor shows stronger fundamentals, supported by consistent revenue and net income growth and favorable margins, despite a recent one-year decline. Microchip Technology faces unfavorable trends, including a sharp net income fall and negative margins in 2025. Lattice’s income statement reflects better profitability and growth resilience relative to Microchip over the evaluated periods.
Financial Ratios Comparison
Below is a comparison of key financial ratios for Microchip Technology Incorporated (MCHP) and Lattice Semiconductor Corporation (LSCC) based on their most recent fiscal year data.
| Ratios | Microchip Technology Incorporated (MCHP) | Lattice Semiconductor Corporation (LSCC) |
|---|---|---|
| ROE | -0.01% | 8.60% |
| ROIC | -0.03% | 7.75% |
| P/E | -52021 | 133 |
| P/B | 3.67 | 11.41 |
| Current Ratio | 2.59 | 3.66 |
| Quick Ratio | 1.47 | 2.62 |
| D/E | 0.80 | 0.02 |
| Debt-to-Assets | 36.85% | 1.81% |
| Interest Coverage | 1.18 | 130 |
| Asset Turnover | 0.29 | 0.60 |
| Fixed Asset Turnover | 3.72 | 7.62 |
| Payout ratio | -1951.4% | 0% |
| Dividend yield | 3.75% | 0% |
Interpretation of the Ratios
Microchip Technology Incorporated
Microchip Technology shows mixed ratios with several unfavorable metrics, including negative net margin, ROE, and ROIC, indicating profitability challenges. However, liquidity ratios like current and quick ratios are favorable, suggesting solid short-term financial health. The company pays dividends with a 3.75% yield, supported by a reasonable payout ratio, but risks exist due to weak earnings and interest coverage.
Lattice Semiconductor Corporation
Lattice Semiconductor presents a favorable net margin and strong interest coverage, reflecting operational efficiency and low financial risk. Yet, its high PE and PB ratios and unfavorable ROE and WACC highlight valuation and cost of capital concerns. The firm does not pay dividends, likely focusing on reinvestment and R&D, aligned with its high research spending and growth strategy.
Which one has the best ratios?
Lattice Semiconductor’s ratios appear more balanced, with favorable profitability and financial risk measures, despite valuation concerns. Microchip Technology faces significant profitability and coverage weaknesses but maintains dividend payments. Overall, Lattice’s neutral global opinion contrasts with Microchip’s slightly unfavorable stance, suggesting a relatively stronger ratio profile.
Strategic Positioning
This section compares the strategic positioning of Microchip Technology Incorporated and Lattice Semiconductor Corporation, focusing on Market position, Key segments, and Exposure to technological disruption:
Microchip Technology Incorporated
- Large market cap of 35B, operating in a competitive semiconductor sector with broad geographic reach.
- Diverse product portfolio including microcontrollers, microprocessors, analog and memory products driving semiconductor sales.
- Exposure through embedded control solutions and traditional semiconductors, with no explicit mention of disruptive technology focus.
Lattice Semiconductor Corporation
- Smaller market cap of 10.8B, competing in semiconductors with a focus on niche FPGA markets.
- Focused on FPGA product families and video connectivity serving communications, computing, industrial, and automotive sectors.
- Concentrated on FPGA innovation and IP licensing, indicating potential sensitivity to technological changes in programmable logic.
Microchip vs Lattice Positioning
Microchip shows a diversified product and segment approach with a broad semiconductor portfolio and large scale, while Lattice is more concentrated on FPGA and IP licensing. Microchip’s scale offers breadth; Lattice’s focus targets specialized markets with specific technology.
Which has the best competitive advantage?
Both companies are currently destroying value with declining profitability and ROIC below WACC. Neither shows a favorable economic moat based on recent financial performance and capital efficiency.
Stock Comparison
The stock prices of Microchip Technology Incorporated (MCHP) and Lattice Semiconductor Corporation (LSCC) have shown contrasting dynamics over the past year, with MCHP experiencing a significant decline while LSCC recorded steady gains, reflecting divergent trading sentiment and momentum.
Trend Analysis
Microchip Technology Incorporated (MCHP) has exhibited a bearish trend over the past 12 months with a price decline of -23.89%, accompanied by accelerating downward momentum and notable volatility (std deviation 14.5). The stock hit a high of 98.23 and a low of 36.22.
Lattice Semiconductor Corporation (LSCC) demonstrated a bullish trend with a 12.78% price increase over the same period, showing acceleration and moderate volatility (std deviation 10.57). Its price ranged between 39.03 and 80.45, reflecting strong upward momentum.
Comparing both stocks, LSCC delivered the highest market performance with a positive return of 12.78%, contrasting with MCHP’s significant negative return of -23.89% over the past year.
Target Prices
Analysts present a cautiously optimistic consensus on target prices for Microchip Technology Incorporated and Lattice Semiconductor Corporation.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Microchip Technology Incorporated | 85 | 60 | 73.83 |
| Lattice Semiconductor Corporation | 85 | 65 | 79 |
For Microchip Technology, the consensus target of 73.83 suggests upside potential compared to the current price of 65.03 USD. Lattice Semiconductor’s consensus target at 79 is close to its current price of 78.65 USD, indicating moderate growth expectations.
Analyst Opinions Comparison
This section compares analysts’ ratings and financial scores for Microchip Technology Incorporated and Lattice Semiconductor Corporation:
Rating Comparison
MCHP Rating
- Rating: C-, considered very favorable
- Discounted Cash Flow Score: 3, moderate valuation insight
- ROE Score: 1, very unfavorable for profit efficiency
- ROA Score: 1, very unfavorable asset utilization
- Debt To Equity Score: 1, very unfavorable financial risk
- Overall Score: 1, very unfavorable overall financial standing
LSCC Rating
- Rating: B-, considered very favorable
- Discounted Cash Flow Score: 3, moderate valuation insight
- ROE Score: 2, moderate profit efficiency
- ROA Score: 3, moderate asset utilization
- Debt To Equity Score: 4, favorable financial risk
- Overall Score: 2, moderate overall financial standing
Which one is the best rated?
Based strictly on the provided data, LSCC holds a better analyst rating and overall scores than MCHP. LSCC shows moderate to favorable financial metrics, whereas MCHP’s scores indicate very unfavorable financial performance in most categories.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Microchip Technology Incorporated and Lattice Semiconductor Corporation:
MCHP Scores
- Altman Z-Score: 3.60, indicating a safe zone from bankruptcy risk.
- Piotroski Score: 3, classified as very weak financial strength.
LSCC Scores
- Altman Z-Score: 39.0, strongly in the safe zone for bankruptcy risk.
- Piotroski Score: 5, representing average financial strength.
Which company has the best scores?
Based on the provided scores, LSCC has a significantly higher Altman Z-Score and a better Piotroski Score than MCHP, indicating comparatively stronger financial health overall.
Grades Comparison
Here is the comparison of recent grades assigned to Microchip Technology Incorporated and Lattice Semiconductor Corporation:
Microchip Technology Incorporated Grades
The following table lists recent grades from established grading companies for Microchip Technology Incorporated.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Cantor Fitzgerald | Upgrade | Overweight | 2025-12-16 |
| B of A Securities | Maintain | Neutral | 2025-12-05 |
| Needham | Maintain | Buy | 2025-12-04 |
| Rosenblatt | Maintain | Buy | 2025-12-03 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-07 |
| Citigroup | Maintain | Buy | 2025-11-07 |
| Cantor Fitzgerald | Maintain | Neutral | 2025-11-07 |
| Stifel | Maintain | Buy | 2025-11-07 |
| Truist Securities | Maintain | Hold | 2025-11-07 |
| Needham | Maintain | Buy | 2025-11-07 |
Microchip Technology Incorporated’s grades show a generally positive outlook, with multiple “Buy” ratings and a recent upgrade to “Overweight” from Cantor Fitzgerald.
Lattice Semiconductor Corporation Grades
Below are recent grades from recognized grading firms for Lattice Semiconductor Corporation.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Baird | Maintain | Outperform | 2025-11-04 |
| Needham | Maintain | Buy | 2025-11-04 |
| Stifel | Maintain | Buy | 2025-11-04 |
| Benchmark | Maintain | Buy | 2025-11-04 |
| Rosenblatt | Maintain | Buy | 2025-11-04 |
| Susquehanna | Maintain | Positive | 2025-10-22 |
| Keybanc | Maintain | Overweight | 2025-09-30 |
| Needham | Maintain | Buy | 2025-09-22 |
| Benchmark | Maintain | Buy | 2025-09-11 |
| Benchmark | Maintain | Buy | 2025-08-05 |
Lattice Semiconductor Corporation consistently holds strong buy and outperform ratings, indicating sustained confidence from analysts.
Which company has the best grades?
Lattice Semiconductor Corporation has received consistently stronger grades, including multiple “Buy” and “Outperform” ratings, compared to Microchip Technology Incorporated’s mixed but generally positive grades. This suggests Lattice may be viewed more favorably by analysts, potentially influencing investor sentiment and portfolio decisions.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses for Microchip Technology Incorporated (MCHP) and Lattice Semiconductor Corporation (LSCC) based on the latest financial and operational data.
| Criterion | Microchip Technology Incorporated (MCHP) | Lattice Semiconductor Corporation (LSCC) |
|---|---|---|
| Diversification | Moderate – Primarily semiconductor products, some tech licensing (4.3B semiconductor in 2025) | Limited – Mainly license and service revenue (~17M in 2022) with focus on FPGA products |
| Profitability | Weak – Negative net margin (-0.01%), declining ROIC, value destroying | Mixed – Positive net margin (12%) but ROIC below WACC, slight value destruction |
| Innovation | Moderate – Technology licensing segment present but small (131M in 2025) | Moderate – Focused innovation in niche FPGA market, but high P/E suggests growth expectations |
| Global presence | Strong – Large semiconductor footprint globally | Moderate – Smaller scale, more focused market presence |
| Market Share | Large player in embedded semiconductor space | Niche player in low power FPGAs, smaller market share |
Key takeaways: Both companies currently face challenges in creating shareholder value, with negative or declining returns on invested capital. MCHP benefits from a stronger global presence and larger product base, while LSCC shows promising profitability but struggles with valuation and market reach. Caution is advised when considering investments in these firms due to profitability and moat concerns.
Risk Analysis
Below is a comparative table summarizing key risks for Microchip Technology Incorporated (MCHP) and Lattice Semiconductor Corporation (LSCC) based on the most recent data available:
| Metric | Microchip Technology Incorporated (MCHP) | Lattice Semiconductor Corporation (LSCC) |
|---|---|---|
| Market Risk | Beta 1.46 indicates moderately high volatility | Beta 1.73 signifies higher volatility and sensitivity to market swings |
| Debt level | Debt-to-Equity ratio 0.8 (neutral); Debt-to-Assets 36.85% (moderate leverage) | Debt-to-Equity 0.02 and Debt-to-Assets 1.81% (very low debt, favorable) |
| Regulatory Risk | Moderate, due to global operations in semiconductor industry | Moderate, with exposure to similar semiconductor regulatory environment |
| Operational Risk | Slightly unfavorable margins and asset turnover indicate efficiency challenges | Favorable margins but high P/E suggests growth expectations pressure |
| Environmental Risk | Standard industry risk; no major red flags reported | Standard industry risk; no significant issues identified recently |
| Geopolitical Risk | Exposure in Americas, Europe, and Asia, with potential supply chain risks | Similar global exposure with risks linked to geopolitical tensions affecting supply chains |
In synthesis, LSCC shows lower financial leverage and higher operational margins, reducing financial risk but faces higher market volatility and valuation pressures. MCHP has moderate leverage and operational inefficiencies, posing moderate risk. The most impactful risk for both remains market volatility and supply chain geopolitical tensions, common in the semiconductor sector.
Which Stock to Choose?
Microchip Technology Incorporated (MCHP) has experienced a significant decline in income, with revenue and net income dropping sharply over recent years. Its financial ratios show a slightly unfavorable outlook, marked by negative profitability metrics, moderate debt levels, and mixed liquidity. The overall rating is very favorable, but underlying scores indicate financial challenges.
Lattice Semiconductor Corporation (LSCC) presents a more favorable income evolution overall, despite some recent declines. Its financial ratios are neutral, with solid profitability and very low debt. The company’s rating is also very favorable, supported by strong liquidity and asset efficiency, though valuation multiples appear stretched.
Considering ratings and comprehensive financial analyses, MCHP might appear more suitable for investors prioritizing stability due to its favorable rating despite operational struggles, whereas LSCC could appeal to those with a tolerance for growth volatility, given its neutral ratios and positive income trends.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Microchip Technology Incorporated and Lattice Semiconductor Corporation to enhance your investment decisions:
