Microchip Technology Incorporated · NASDAQ:MCHP

Microchip Technology — J.P. Morgan conference 2017

8 slides from Microchip Technology's conference presentation, May 2017

  1. Slide 1: Steve Sanghi, CEO; Eric Bjornholt, CFO

    Steve Sanghi, CEO Eric Bjornholt, CFO ©May 2017

  2. Slide 2: Annual Net Sales Growth

    Annual Net Sales Growth 4000 3900 3800 3700 3600 106 consecutive quarters of profitability! 3500 3400 3300 3200 3100 MCU Analog Memory Licensing MMO 3000 2900 2800 2700 $ Million 2600 2500 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100

  3. Slide 3: Revenue by End Market

    Revenue by End Market Communi- Defense & cation Aerospace 5% 2% Computing 9% Industrial 35% Consumer 24% Automotive 25% ©May 2017 3

  4. Slide 4: New Business Model

    New Business Model FQ4 17 Long-Term Model Net Sales 100% 100% Gross Margin 59.24% 62.5% Op ex % 23.66% 22.5% Op profit % 35.58% 40.0% * Microchip does not utilize a GAAP long-term model. All figures in long-term model are non-GAAP. ©May 2017 4

  5. Slide 5: Multiple Growth Drivers

    Multiple Growth Drivers 1. Microcontroller market growth and share gains 2. Analog growth and attach opportunity 3. Wireless/IoT/Connectivity 4. Automotive networking, car access and electronics 5. Security 6. Technology licensing ©May 2017 5

  6. Slide 6: Gross Margin Drivers

    Gross Margin Drivers 1. Increasing Fab utilization 2. Savings from Micrel Fab closure 3. Increasing back end plants utilization 4. Porting Atmel products to Microchip assembly/test technology 5. Transfer of Micrel and Atmel’s U.S. test areas to Thailand 6. Stable to rising pricing environment 7. Ric

  7. Slide 7: Operating expense leverage drivers

    Operating expense leverage drivers 1. Consolidation of Atmel’s G&A 2. Synergy in roadmaps on MCU, analog, wireless and memory 3. Convergence of Microchip and Atmel to common process technology platforms 4. Synergy in common development of IP libraries 5. Synergy in convergence of development tools 6

  8. Slide 8: Summary

    Summary  Experiencing significant organic growth from multiple growth drivers.  Gross margin enhancement to 62.5% through multiple gross margin drivers.  Leverage to get to 22.5% operating expenses through a number of drivers.  A long-term path to 40% operating margin through 62.5% gross margin

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