Microchip Technology Incorporated · NASDAQ:MCHP
Microchip Technology — KeyBanc Capital Markets Investor Presentation August 2020
26 slides from Microchip Technology's conference presentation, August 2020
Slide 1: Investor Presentation
Investor Presentation A Leading Provider of Smart, Connected and Secure Embedded Solutions Steve Sanghi/Ganesh Moorthy/Eric Bjornholt August 2020
Slide 2: Safe Harbor
Safe Harbor Forward Looking Statement Safe Harbor: During the course of this presentation, we will make projections or other forward-looking statements regarding the future financial performance of the company (including our guidance) or future events, including our strategy, growth drivers, industr
Slide 3: Q1FY21 Business Results and Q2FY21 Guidance
Q1FY21 Business Results and Q2FY21 Guidance* • Q1FY21 net sales of $1.310 billion, down 1.3% sequentially and down 1.0% from a year ago quarter • Q1FY21 Non-GAAP gross margin of 61.7%, operating margin of 38.6% and diluted EPS of $1.56 • Q2FY21 net sales guidance of flat to down 8% sequentially with
Slide 4: Competitor Revenue Results – June 2020 Quarter
Competitor Revenue Results – June 2020 Quarter Sequential Year over Year Analog Devices 1.04% Qtr end April 30 Silicon Labs 0.40% Incl. Redpine Microchip -1.26% Microchip -0.98% Texas Instruments -2.70% Maxim -2.00% Maxim -2.94% ST Microelectronics -3.96% Silicon Labs -3.42% Incl. Redpine ON Semicon
Slide 5: Competitor Revenue Results – September 2020 Quarter Guidance
Competitor Revenue Results – September 2020 Quarter Guidance versus September 2019 Sept YOY ST Microelectronics -4.03% Silicon Labs -4.61% Incl. Redpine Microchip -6.00% ON Semiconductor -8.45% Renesas -8.92% Xilinx -9.36% Texas Instruments -9.84% Analog Devices -10.81% Qtr end Aug. 1 NXP Semiconduc
Slide 6: Corporate Snapshot
Corporate Snapshot Leading Total Systems Solutions Provider: • High-performance standard and specialized • Wireless and Wired Connectivity solutions Microcontrollers, Digital Signal Controllers and • FPGA solutions Microprocessors • Non-volatile EEPROM and Flash Memory • Mixed-Signal, Analog, Interf
Slide 7: Our Vision
Our Vision Be The Very Best Embedded Control Solutions Company Ever 7
Slide 8: Annual Growth
Annual Growth End Market Demand 6000 119 consecutive quarters of non-GAAP profitability! 5000 4000 $ Million 3000 2000 1000 0 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 RR* MCU Analog FPGA LMO 8 * F
Slide 9: Worldwide 8-Bit Microcontroller Market Share
Worldwide 8-Bit Microcontroller Market Share No. 1991 Rank 1996 Rank 2001 Rank 2005 Rank 2006-2009 Rank 2010 Rank 2014-2017 Rank 2017-2019 Rank 1 Motorola Motorola Motorola Motorola Microchip Renesas Microchip Microchip 2 Intel NEC Hitachi Renesas NEC Microchip NXP NXP 3 Philips Philips NEC Microchi
Slide 10: Worldwide 16-Bit Microcontroller Market Share
Worldwide 16-Bit Microcontroller Market Share No. 2004 Rank 2006 Rank 2008 Rank 2010 Rank 2012 Rank 2014 Rank 2015-2016 Rank 2017-2019 Rank 1 Renesas Renesas Renesas Renesas Renesas Renesas Renesas Renesas 2 Infineon Infineon Infineon Infineon Infineon Infineon Infineon TI 3 Freescale Freescale Sams
Slide 11: Worldwide 32-Bit Microcontroller Market Share
Worldwide 32-Bit Microcontroller Market Share No. 2010 Rank 2011 Rank 2012 Rank 2013 Rank 2014 Rank 2015 Rank 2016-2017 Rank 2019 Rank 1 Renesas Renesas Renesas Renesas Renesas Renesas Renesas Renesas 2 Freescale Freescale Freescale Freescale Freescale ST-Micro NXP NXP 3 TI TI ST-Micro ST-Micro ST-M
Slide 12: Worldwide Microcontroller Market Share
Worldwide Microcontroller Market Share No. 1991 Rank 1996 Rank 2003 Rank 2008 Rank 2009 Rank 2014 Rank 2018 Rank 2019 Rank 1 Motorola Motorola Renesas Renesas Renesas Renesas Renesas Renesas 2 Intel NEC Motorola NEC NEC Freescale NXP NXP 3 Philips Philips NEC Freescale Freescale ST-Micro Microchip M
Slide 13: Analog Growth
Analog Growth End Market Demand 1,800.00 1,600.00 1,400.00 1,200.00 $ Million 1,000.00 800.00 600.00 400.00 200.00 - FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 RR* 13 * FY21 run rate is first quarter of FY21 multiplied by 4.
Slide 14: Analog Market Share
Analog Market Share The only Analog company to grow in 2019! 14
Slide 15: FPGA Growth
FPGA Growth End Market Demand 400.00 350.00 300.00 250.00 $ Million 200.00 150.00 100.00 50.00 0.00 FY15 FY16 FY17 FY18 FY19 FY20 FY21 RR* 15 * FY21 run rate is first quarter of FY21 multiplied by 4.
Slide 16: Microchip 2.0
Microchip 2.0 • Total System Solution in Embedded Control • Leading customer preference to design with our MCUs • Multiple growth drivers • Non-GAAP gross margin target of 63% of net sales with multiple drivers • Non-GAAP operating expense target of 22.5% of net sales • End market mix skewed to Indu
Slide 17: Expanding Microchip Solutions Through Acquisitions
Expanding Microchip Solutions Through Acquisitions Bluetooth and Motor Drive High-Voltage Analog & Mixed- Development Embedded WiFi Products Signal Products Tools Computer FPGAs, SoCs, ASICS, Hampshire LSS Power, PoE, Timing and Storage systems Touch Screen High-Speed Low-Power Analog & mixed-signal
Slide 18: Providing Total System Solutions
Providing Total System Solutions Power Management RFICs MMICs DC-DC Converters Encryption Supervisors & Ref. & Precision LDOs, Battery Mgt. High Voltage Digital Security Voltage Discretes & Modules I/Os Potentiometer Reference Motor Sensors Drivers Amplifiers Filters A/D Voice & Audio Processing Pow
Slide 19: Current Server Design
Current Server Design MCU8 Front Panel Motherboard PCIe Cards Backplanes MCU32 WSG Quick Sync 2 Boot Drive CPU PIC32CX UNG M.2 Drive TCG M.2 Drive WILC3000 SY75572 APID 10G PCH ZL40924 SAMD21 SAMS70 PHY CPG OR TPM 2.0 NIC Cards SY75572 MIC2039 AMD ONLY BMC ATTINY88 ASIC USB2514B SY75572 Display USB5
Slide 20: Next Server Design
Next Server Design MCU8 Front Panel Motherboard PCIe Cards Backplanes MCU32 Boot Drive CXL- WSG Quick Sync 2 DRAM Flash Module CPU PIC32CX UNG Flash Module TCG WILC3000 FlashTec ZL40924 SY75602 APID 10G SAMS70 PHY PCH CPG ZL40924 NIC Cards OR TPM 2.0 SY75602 DCS NC-SI PHY ASIC MSLD MIC2039 AMD ONLY
Slide 21: Revenue By End Market
Revenue By End Market* 12% 28% Industrial 13% Data Center & Computing Automotive Communication 14% Consumer 18% Aerospace & Defense 15% * End market diversification based on management estimates for the fiscal year ending March 31, 2020 21 Microchip Proprietary and Confidential
Slide 22: Financial Results, Guidance and Long-Term Model
Financial Results, Guidance and Long-Term Model* Actual Results Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Net Sales $844.0 $873.8 $881.2 $902.7 $972.1 $1012.1 $994.2 $1002.3 $1216.8 $1513.3 $1416.0 $1329.8 $1322.6 $1337.8 $
Slide 23: Net Leverage Ratio
Net Debt*, Adjusted EBITDA** & Net Leverage $12,000.0 6.00 • Paid down $394M of $10,000.0 5.00 debt in FQ1 $ Million – Debt & EBITDA • Cumulative Debt $8,000.0 4.00 paydown of $2.62B Net Leverage Ratio over last 8 quarters $6,000.0 3.00 • EBITDA increased $4,000.0 2.00 due to tight expense control a
Slide 24: Six Megatrends
Six Megatrends 5G Internet of Things Datacenter Electric Vehicles Artificial Intelligence/Machine Learning ADAS/Autonomous Vehicles 24
Slide 25: Summary
Summary • A consistent revenue grower with multiple growth drivers across six megatrends of the industry • High margin business model and shareholder friendly • Q2FY21 guidance for net sales to be flat to down 8% sequentially • Paid down $2.62 billion of debt over the last eight quarters and substan
Slide 26: Thank You
SO Thank You SMART | CONNECTED | SECURE
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