Microchip Technology reports 98% growth in data center revenue last quarter

Microchip Technology reported 98% year-over-year growth in data center revenue for Q1 of fiscal year 2027, with total net sales reaching $1.485 billion, a 38% increase. The company is targeting approximately $1 billion in total data center revenue by the end of calendar 2026, driven by demand for AI infrastructure and products like PCIe Gen 6 switches and CXL 3.1 retimers.

Photo: NobbiP / Wikimedia Commons / CC BY-SA 3.0 http://creativecommons.org/licenses/by-sa/3.0/ Microchip Technology reports 98% growth in data center revenue last quarter The chipmaker is now targeting $1 billion in data center revenue by the end of calendar 2026, fueled by surging AI infrastructure demand Microchip Technology just posted a number that would make most semiconductor companies jealous. The company’s data center revenue nearly doubled year-over-year in its most recent quarter, growing 98% as hyperscale operators and enterprise buyers race to build out AI infrastructure. Total net sales for Q1 of fiscal year 2027 hit $1.485 billion, a 38% jump compared to the same period last year. Non-GAAP earnings per share came in at $0.76. From niche player to billion-dollar contender In calendar 2025, the Data Center Solutions segment generated $302.7 million in revenue. Broader data center exposure for the full calendar year reached $591 million. The company is guiding toward approximately $1 billion in total data center revenue by the end of calendar 2026, representing roughly 69% growth from the $591 million baseline. Sanghi pointed to the March 2026 quarter as evidence of sustained acceleration, noting 62.9% year-over-year growth in that period. For all of calendar 2026, the company is projecting about 65% growth in its data center segment, which would push revenue to around $500 million from the core Data Center Solutions unit alone. The products driving the surge Two product categories are doing most of the heavy lifting. Microchip has been shipping PCIe Gen 6 switches and CXL 3.1 retimers, both of which target the specific bottlenecks that emerge when you try to connect thousands of GPUs and accelerators inside a modern AI data center. By the end of the June quarter, Microchip had secured 12 PCIe Gen 6 connectivity programs, double the number from the previous quarter. Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy https://cryptobriefing.com/editorial-policy/ .