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Leading semiconductor manufacturer Microchip Technology Inc. (MCHP - Analyst Report) recently revised its first quarter fiscal 2014 guidance to better reflect an improving business environment and strong earnings potential with increased bookings.

Microchip currently anticipates GAAP net sales between $447.4 million and $460.3 million, while gross margin is expected to be in the range of 56.3% to 56.8%. GAAP net income is anticipated to be in the range of $67.9 million to $76.4 million, with earnings per share of 32 to 36 cents.

Concurrent with the fourth quarter fiscal 2013 earnings release, management had earlier provided guidance for the first quarter of fiscal 2014. GAAP net sales were expected between $438.7 million and $456.0 million, while gross margin was expected to be in the range of 56.0% to 56.5%. GAAP net income was anticipated to be in the range of $64.2 million to $71.5 million, with earnings per share of 30 to 34 cents.

A strong demand pull has also forced Microchip’s management to take immediate steps to align its inventory levels to avoid the risk of losing out on the opportunity. Workers have been asked to ramp up production, while all employees are directed to work full-time.

With better-than-expected bookings and expedite requests in its business driven by strong demand and robust product designs, Microchip anticipates to continue its bull run in the coming quarters. We also remain encouraged by the strong results of the company and its bullish guidance.

Microchip presently has a Zacks Rank #2 (Buy). Other players in the industry that are worth mentioning include RDA Microelectronics, Inc. , ON Semiconductor Corp. (ONNN - Analyst Report), and MaxLinear, Inc. (MXL - Snapshot Report), each carrying Zacks Rank #2 (Buy).

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