Premier semiconductor manufacturer Microchip Technology Inc. MCHP recently closed the acquisition of rival Atmel Corporation and updated its guidance for fourth-quarter fiscal 2016, soon after. The company also offered a sneak preview of Atmel’s performance for the first quarter of 2016.For the quarter ended Mar 31, 2016, Microchip expects revenues to be record high and at the higher end of earlier guided range of $552.0–$568.5 million. Non-GAAP earnings are also anticipated to be near the upper end of its previous expectations of 65–69 cents per share.However, Atmel’s sales are expected to decline on a sequential basis to $219–$221 million, down 15.8% at the mid-point from its December sales. Revenues are likely to be affected by weaker-than-anticipated billings, mostly in Asia, as distributors reduced inventory levels due to uncertainties associated with the just concluded acquisition process. In addition, foreign currency headwinds and a general slowdown in the overall semiconductor industry are expected to result in lower demands in almost all the major end markets.Despite the short-term hiccups, management remained confident that Atmel would yield synergistic benefits to Microchip and would be immediately accretive to its non-GAAP earnings per share. Microchip expects the acquisition to supplement its operational excellence and customer base. The transaction is deemed to be strategic as Atmel's microcontrollers, wireless, touch, memory and automotive products complement and enhance Microchip's corresponding solutions.Microchip is one of the fastest-growing providers of 16-bit and 32-bit microcontrollers in the world. The company’s microcontroller business has historically outperformed the industry and has enabled it to gain significant market share. Microchip expects to continue this momentum and strengthen its position as the best performing microcontroller franchise in the industry.The company is increasingly expanding its touch business beyond handsets and tablets in areas such as automotive industrial applications. The Analog business has also become one of the largest analog franchises in the market. To further capitalize on this growing business potential, Microchip aims to develop a wide array of innovative and proprietary new products leveraging on Atmel’s touchscreen expertise.We remain impressed with the growth potential of this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the industry include MaxLinear, Inc. MXL, Inphi Corporation IPHI and Semtech Corporation SMTC, each sporting a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MICROCHIP TECH (MCHP): Free Stock Analysis Report SEMTECH CORP (SMTC): Free Stock Analysis Report MAXLINEAR INC-A (MXL): Free Stock Analysis Report INPHI CORP (IPHI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research