Microchip Technology shares rose 7% in after-hours trading Monday after the company issued an outlook calling for significant expansion in its Data Center Solutions Business Unit.
Microchip said it expects the Data Center Solutions unit to grow 65% to roughly $500 million in calendar year 2026. The company reported that the business unit generated $302.7 million in revenue in calendar year 2025.
Business unit composition and recent performance
The Data Center Solutions Business Unit comprises three dedicated product families: storage controller/expanders/accelerators; PCIe and CXL memory controllers; and the Switchtec PCIe switch and retimer businesses. According to the company, revenue from that unit increased 62.9% in the March 2026 quarter compared with the same quarter a year earlier.
Microchip also detailed the scope of its broader Datacenter and Compute end market. That market, which in addition to the Data Center Solutions unit includes power management, catalog microcontrollers, analog and security products, accounted for approximately 18% of the company's total revenue.
Pricing and near-term guidance
The Chandler, Arizona-based semiconductor manufacturer announced plans to implement selective price increases across its product portfolio. Management attributed the decision to broad-based input cost pressures stemming from both suppliers and internal operations. The company stated the price adjustments will not affect guidance or reported results for the fiscal quarter ending June 30, 2026.
Investor engagement
Microchip is scheduled to present at two upcoming investor conferences: the Bank of America Global Technology Conference on June 2, 2026, and the 2026 Evercore Global TMT Conference on June 3, 2026.
Implications
The company’s projection for a large percentage increase in Data Center Solutions revenue, together with strong year-over-year quarterly growth, appears to have driven the after-hours stock move. The planned selective price increases are framed as a response to input-cost inflation while management maintains that near-term guidance will remain unchanged for the fiscal quarter ending June 30, 2026.