For two years the makers of unglamorous silicon — the microcontroller inside a washing machine, the power switch in an electric-vehicle inverter, the converter that turns a sensor's voltage into a number a computer can read — had one problem. Customers had over-ordered during the pandemic and spent eight quarters working the parts off. In earnings calls over the past three weeks, one company after another described the opposite condition.

The glut is over

Microchip Technology, which sells 8- to 32-bit microcontrollers, programmable logic and analog parts into factories, cars and defense programs, told investors on 6 August that orders were running well above shipments and that this was its strongest booking quarter in roughly four years. Inventory held by its distributors has fallen to 25 days, the low end of its historical range, with sell-through up 17% from the prior quarter. Revenue reached $1.485bn, up 38% year on year from a June 2025 quarter in which the company lost money. September revenue is guided up about 41%, at a gross margin of 66-67% — above Microchip's own 65% long-run model.

onsemi, which supplies power switches, silicon-carbide modules and image sensors to electric vehicles and industrial power systems, ran its factories at 83% utilization last quarter, six percentage points higher than the quarter before. Lead times stretched from 27 weeks to 32. Channel inventory fell to 10.1 weeks. The company has now launched a second round of price increases and expects input costs to keep rising into 2027. Microchip pushed through what it called "one and done" increases in mid-August, citing scarce foundry, assembly and substrate capacity; NXP warned of a memory-component shortage and possible foundry wafer access fee increases. This is the vocabulary of a shortage, not a correction.

Analog Devices, whose data converters and amplifiers sit in industrial instruments, cars and aerospace systems, grew revenue 37.2% to $3.62bn in the quarter ended 2 May, with operating income more than doubling. Its gross margin has improved for five straight quarters, reaching 67.3% against a 59.0% trough in early 2025. BNP Paribas notes that ADI reported record orders with lean customer inventories and guided industrial up more than 20% sequentially, part of a broader restocking cycle that is not solely about AI.

NXP Semiconductors, the Dutch maker of automotive microcontrollers, radar and secure connectivity chips, grew 19.5% to $3.50bn with gross margin at 57.3% against 53.4% a year earlier. Management said orders exceed shipments and are climbing, that backlog signals now extend 18 months out, and — pointedly — that it sees no evidence of restocking. Its industrial and internet-of-things segment grew 38% to $755m, its fastest end market.

The AI content is not where you'd guess

Monolithic Power Systems, which designs dense DC-DC power chips with only 4,501 employees, posted a record $980.6m, up 47.6%, as enterprise data revenue jumped 45% sequentially; it raised the floor on that business's full-year growth from 85% to 130%. Lattice Semiconductor, a maker of low-power programmable chips, hit a record $201.1m at a 70.3% gross margin and says 2027 is "pretty much booked."

But the AI money is spread wider than those two. Microchip projects roughly $1bn of data-center sales this fiscal year, up 69%. NXP guides its data-center line above $500m from about $200m in 2025. onsemi expects its AI data-center revenue to more than double. The AI names are not carrying a dead industrial base; both are growing at once.

The hole is automotive

onsemi's automotive revenue of $781m grew 7% year on year and fell 2% sequentially, with industrial up just 4% — and the company said it deliberately prioritized AI data-center shipments over auto and industrial because capacity is tight. Monolithic expects only mid-teens automotive growth for the year, with the first half flat.

indie Semiconductor, a sub-$1bn designer of automotive radar and vision chips, grew 24% to $64.0m but runs an operating margin of -54.8%, with gross margin down to 36.1% from 40.6%. It has a $25m initial production order for 77 GHz radar through a Tier 1 partner and a Volvo win that chief executive Donald McClymont declined to size. Cash fell $35.7m in the quarter to $149m.

The two that actually shrank

Skyworks Solutions, which makes radio front-end modules for smartphones, saw revenue fall 3.1% to $934.8m and operating income drop 56%. Apple is now 57% of its revenue, down from 63%, after dual-sourcing a premier radio socket on the iPhone 17 cost Skyworks 20-25% of that content. Qorvo's revenue fell 4.2% to $784.8m, though gross margin expanded to 51.1% from 40.5%. The two are merging in a roughly $9.76bn all-stock deal closing in early 2027; together they already supply about 40% of Apple's front-end content.

What the price says

Over the past three months the nine are down about 2% equal-weighted while the S&P 500 gained 5.8%. NXP fell 19.8%, onsemi 19.7% and Microchip 12.2%. This is analog-specific, not a chip selloff: Nvidia rose 2.0% over the same span while Texas Instruments fell 6.0% and STMicroelectronics 7.0%. The group's cheerful-looking 30-day gain is a handful of sessions — strip each name's two best days and seven of the nine turn negative, indie from +28.6% to -8.1%. The only two survivors are Skyworks and Qorvo, and their gains are merger arithmetic.

Against the multiples these companies carried in May, every one that can be anchored has de-rated while its gross profit accelerated: ADI from 27.5x gross profit to 23.1x, Monolithic 49.8x to 38.5x, Microchip 20.1x to 14.1x, onsemi 16.9x to 14.0x. NXP is the extreme case at 15.4x forward earnings, 7.4x forward gross profit and a 5.0% free-cash-flow yield, closing at $235.95 against a one-year average of $238.30 — average price, record revenue. It fell 7.0% on 29 July and another 6.5% on 31 July after beating estimates, the second leg alongside a Financial Times report that it was in talks to buy edge-AI chipmaker Ambarella for more than $3bn.

The caveats are specific. Microchip carries $5.2bn of net debt at 2.85x EBITDA and has ruled out buybacks. Lattice, at 62.3x forward earnings, needs consensus revenue growth of 76.6% next year to land. Skyworks' forward gross-profit multiple sits above its trailing one — the signature of an expected decline.

The setup

Where it stands — Bookings, lead times and pricing all say the analog shortage has returned, while three-month share prices say otherwise.

Would confirm — onsemi's automotive revenue growing sequentially in the September quarter after this quarter's 2% decline.

Would invalidate — Book-to-bill falling back below 1.0 at NXP or Microchip, or distributor inventory rising above 25 days.

Watch next — onsemi's analyst day in New York on 16 September; Microchip's September-quarter print against $1.603bn guidance.

Valuation — NXP at 19.8x trailing and 15.4x forward earnings; Lattice at 62.3x forward, the group's high end.