Microchip Technology delivered a mixed QQ3 2025 (fiscal Q3 2025) performance characterized by a sharp year-over-year and sequential revenue decline driven primarily by a broad inventory correction across the supply chain. Net sales reached $1.026 billion, down 41.9% YoY and 11.8% QoQ, with GAAP gross margins of 54.7% and non-GAAP gross margins of 55.4% (the latter including capacity underutilization charges of $42.7 million). The company reported a GAAP net loss of $53.6 million and a non-GAAP net income of $107.3 million ($0.20 per diluted share). The management team attributes the result to an industry-wide destocking cycle following a multi-year post-COVID upcycle and is implementing a nine-point plan to reshape manufacturing, reduce inventory, realign operating expenses, and accelerate design-wins execution. A key near-term driver is the planned inventory reduction from 266 days at December 31, 2024 toward a target of 130–150 days by fiscal year-end 2026, which the company estimates could liberate substantial cash as slow-moving inventories are worked through. Management signaled that the March quarter guidance implies a continued demand-destocking tailwind though visibility remains limited (net sales guidance of $0.92–$1.0 billion; non-GAAP gross margin of 54–55%; non-GAAP opEx of 37.7–40.5% of sales; non-GAAP EPS of $0.05–$0.15). The call also highlighted strategic actions such as closing the Tempe fab (fab2), expanding capacity alignment across fabs four and five, and a renewed emphasis on design-centric growth, channel optimization, and customer relationships. While the near term remains challenging, the company argues the long-term opportunity remains intact through new products and targeted megatrends. Investors should monitor inventory normalization, bookings recovery, gross margin progression after underutilization charges unwind, and the impact of the nine-point plan on operating leverage and cash generation.