Microchip Technology Exceeds Financial Guidance for the Second Fiscal Quarter 2010

http://www.businesswire.com/news/home/20091104006241/en

* NET SALES OF $226.7 MILLION, UP 17.5% SEQUENTIALLY

* HIGHEST SEQUENTIAL GROWTH IN 15 YEARS

* ON A GAAP BASIS:

* GROSS MARGIN OF 54.4%; OPERATING PROFIT OF 23.3%; NET INCOME OF $44.5 MILLION
AND 19.6% OF NET SALES; EPS OF 24 CENTS PER DILUTED SHARE

* ON A NON-GAAP BASIS:

* GROSS MARGIN OF 55.5%; OPERATING PROFIT OF 27.8%; NET INCOME OF $53.2 MILLION
AND 23.5% OF NET SALES; EPS OF 29 CENTS PER DILUTED SHARE

* DAYS OF INVENTORY REDUCED BY 12 DAYS SEQUENTIALLY, TO 96 DAYS
* RECORD SHIPMENTS OF 38,086 DEVELOPMENT TOOLS
* INCREASED QUARTERLY DIVIDEND TO 34 CENTS PER SHARE

CHANDLER, Ariz.--(Business Wire)--
Microchip Technology Incorporated (NASDAQ: MCHP), a leading provider of
microcontroller and analog semiconductors, today reported results for the three
months ended September 30, 2009 as summarized in the following table:

GAAP % of Non-GAAP1 % of
Revenue Revenue
Revenue $226.7 million $226.7 million
Gross Margin $123.3 million 54.4% $125.8 million 55.5%
Operating Income $52.7 million 23.3% $63.1 million 27.8%
Other Income (Expense) ($1.4) million ($2.0) million
Income Tax Expense $6.8 million $7.9 million
Net Income $44.5 million 19.6% $53.2 million 23.5%
Earnings per Diluted Share 24 cents 29 cents

1 See the "Use of Non-GAAP Financial Measures" section of this release.

Net sales for the second quarter of fiscal year 2010 were $226.7 million, up
17.5% sequentially from net sales of $192.9 million in the immediately preceding
quarter, and down approximately 16% from net sales of $269.7 million in the
prior year`s second fiscal quarter. GAAP net income for the second quarter of
fiscal year 2010 was $44.5 million, or 24 cents per diluted share, up 62.5% from
GAAP net income of $27.4 million, or 15 cents per diluted share, in the
immediately preceding quarter, and down 41.3% from GAAP net income of $75.7
million, or 40 cents per diluted share, in the prior year`s second fiscal
quarter.

Non-GAAP net income for the second quarter of fiscal year 2010 was $53.2
million, or 29 cents per diluted share, up 51.9% from non-GAAP net income of $35
million, or 19 cents per diluted share, in the immediately preceding quarter,
and down 36.3% from non-GAAP net income of $83.5 million, or 45 cents per
diluted share, in the prior year`s second fiscal quarter. Our non-GAAP results
exclude the effect of share-based compensation, any gain or loss on trading
securities, the impact of our acquisition activities and non-cash interest
expense on our convertible debentures associated with the adoption of the
Financial Accounting Standards Board`s Accounting Standards Codification
Subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion, which
requires us to account separately for the liability and equity components of
certain convertible debt instruments in a manner that reflects our
nonconvertible debt (unsecured debt) borrowing rate when interest cost is
recognized. A reconciliation of our non-GAAP and GAAP results is included in
this press release.

Microchip also announced today that its Board of Directors declared a quarterly
cash dividend on its common stock of 34 cents per share. The quarterly dividend
is payable on December 2, 2009 to stockholders of record on November 18, 2009.
Microchip initiated quarterly cash dividend payments in the third quarter of
fiscal 2003.

"During the September quarter we experienced strength in all geographies and
product lines, allowing us to exceed our revenue, gross margin and earnings per
share guidance that we revised positively in early September," said Steve
Sanghi, Microchip`s President and CEO.

"We achieved GAAP gross margins of 54.4% and non-GAAP gross margins of 55.5%.
Non-GAAP gross margins were up over 400 basis points from the June quarter, and
we expect another 150 to 200 basis points of gross margin improvement in the
December quarter as we continue to increase production levels in our factories
in response to improving business conditions," continued Mr. Sanghi.

"Our microcontroller business delivered excellent results and revenue was up
16.6% sequentially, and we shipped a record 38,086 development tools. Our 16-bit
microcontrollers posted a very strong sequential revenue growth of 49.1%, as
well as a 70.3% growth from the year-ago quarter," said Ganesh Moorthy, Chief
Operating Officer. "Our analog business executed on all fronts and revenue grew
an exceptional 25.5% sequentially."

Eric Bjornholt, Microchip`s Chief Financial Officer, said, "Inventory levels on
Microchip`s balance sheet decreased by $5.4 million in the September quarter
compared to the June quarter. Inventory days declined from 108 days at June 30,
2009 to 96 days at September 30, 2009. Days of inventory at our distributors
remained flat to the June quarter levels. We have aggressively increased our
manufacturing output so that we can continue to meet the needs of our
customers."

Mr. Bjornholt continued, "In the September quarter our cash, short-term and
long-term investment position increased by $34.6 million after payment of our
quarterly cash dividend of $62.1 million. We expect our cash generation to
remain strong for the balance of fiscal year 2010."

Mr. Sanghi concluded, "We are extremely pleased with the performance of our
business and excellent execution by our employees. Our book-to-bill ratio for
the September quarter was 1.15, resulting in our opening backlog position for
the December quarter being significantly higher than our backlog entering the
September quarter. While there are fewer shipping days in Europe and the
Americas this quarter, based on the improved visibility and general business
conditions, we expect revenue to be up 4% to 8% sequentially."

Microchip`s Recent Highlights:

* During the quarter, Microchip shipped 38,086 development systems, a new record
that demonstrates the continued strong interest in Microchip`s products in the
face of a tough economy. The total cumulative number of development systems
shipped now stands at 843,010.
* 8-bit microcontroller innovation continued at a brisk pace this quarter, with
Microchip`s first PIC® microcontroller family to feature its enhanced Mid-range
8-bit core. The family`s increased memory and core capabilities deliver enhanced
support for both C and Assembly programmers, and "LF" family members feature
Microchip`s nanoWatt XLP technology-for extreme low power consumption-enabling
designs to achieve world-leading battery lifetime.
* Microchip expanded the family of 8-bit PIC18 `K` devices that feature nanoWatt
XLP technology, adding 5V operation. The PIC18F87J93 8-bit family was also
introduced, with direct-drive LCD, and enhanced analog and
capacitive-touch-sensing peripherals for medical and metering applications.
* Growth for the nanoWatt XLP portfolio of eXtreme Low Power PIC
microcontrollers also continued among Microchip`s 16-bit families. The new
PIC24F04KA201 family combines 20 nA sleep currents and small packages at less
than $.99 each in high volume.
* Adding to Microchip`s comprehensive portfolio of mTouch capacitive and
inductive touch-sensing solutions, the new AR1000 controllers are the embedded
industry`s most innovative analog resistive touch-screen controllers; further
solidifying Microchip`s position as the broadest touch-sensing solutions
provider in the semiconductor industry.
* Microchip enhanced its connectivity capabilities with low-cost, standalone,
IEEE 802.3 compliant, 100 Mbps Ethernet interface controllers that can connect
to nearly any microcontroller via an industry-standard Serial Peripheral
Interface (SPI) or a flexible parallel interface.
* The Company`s broad analog and interface portfolio also continued to expand at
a rapid pace, including the industry`s first 12-bit Quad Digital-to-Analog
Converter (DAC) to feature non-volatile EEPROM, which enables the DAC`s
configuration to be loaded automatically at startup. Microchip also introduced
single- and dual-cell Li-Ion & LiFePO4 battery chargers with over-voltage
protection to enable safer, longer-lasting portable devices.
* New development tools included free uninterruptable power-supply and
power-factor-correction reference designs, using Microchip`s dsPIC33 GS series
of digital-power-conversion DSCs; a new starter kit for the PIC18 portfolio of
high-performance 8-bit microcontrollers; and new boards and software tools for
designing graphics displays using PIC microcontrollers. Microchip is also
running its own "cash for clunkers" program, where competitor`s tools can be
exchanged for a discount on Microchip`s most popular development systems.
* While some other companies have been slashing their customer training budgets
and cancelling annual conferences, Microchip added the new Embedded Designer`s
Forums, a worldwide series of technical learning events focused on innovative
technologies that will help designers stay ahead in today`s competitive
environment. The forums are running from October 2009 through February 2010 at
120 locations across North America, Europe, South Africa, Australia, New
Zealand, China, Japan, Taiwan, Korea, ASEAN and India.

Third Quarter Fiscal 2010 Outlook:

The following statements are based on current expectations. These statements are
forward-looking, and actual results may differ materially.

GAAP Non-GAAP Non-GAAP1
Adjustments
Revenue $236 to $245 million $236 to $245 million
Gross Margin2 56.2% to 56.7% $1.6 to $1.8 million 57% to 57.5%
Operating Expenses2 30.1% to 30.3% $8.0 to $8.2 million 26.8% to 27.0%
Other Income (Expense) ($2.7) to ($2.9) million $1.6 million ($1.1) to ($1.3) million
Tax Rate 12.1% to 12.5% $1.8 to $2.0 million 12.8% to 13.2%
Diluted Common Shares Outstanding3 187.5 to 188.3 million 1.7 million shares 185.8 to 186.6 million
Earnings per Share 27 to 29 cents 5 to 6 cents 33 to 35 cents

* Inventory is expected to grow between 6 and 12 days from September 30, 2009,
while remaining below our internal target of 115 days.
* Capital expenditures for the quarter ending December 31, 2009 are expected to
be approximately $20 million. Capital expenditures for all of fiscal year 2010
are anticipated to be approximately $35 million. We are investing in equipment
to support the expected revenue growth of our new products and technologies and
plan to take advantage of low-cost equipment opportunities in the marketplace.
* We expect net cash generation during the December quarter of approximately $65
to $75 million before the dividend payment of $62.3 million announced today. The
amount of expected net cash generation is before the effect of any stock buy
back activity.
* Microchip`s Board of Directors authorized a stock buy back of up to 10.0
million shares in December 2007. At March 31, 2009, approximately 2.5 million
shares remained available for purchase under this program. Future purchases will
depend upon market conditions, interest rates and corporate considerations.

Calendar Year 2010 Internal Plan:

In order to provide more insight into our business, Microchip is providing
information about our internal plan for calendar year 2010. It reflects the
results we expect from our multi-year demand creation activity that has
generated a large number of new designs. Many of these designs are with new
customers in emerging markets and applications that are outside our traditional
core areas, which we believe will result in increased market share.

Calendar Year 2010 Internal Plan GAAP Non-GAAP1
Revenue $1.05 billion $1.05 billion
Gross Margin2 57.7% 58.5%
Operating Expenses2 29.6% 26.7%
Operating Profit 28.1% 31.8%
Earnings Per Share $1.29 $1.50

1Use of Non-GAAP Financial Measures:

Our Non-GAAP adjustments, where applicable, include the effect of share-based
compensation, any gain or loss on trading securities, the impact of our recent
acquisition activities and non-cash interest expense on our convertible
debentures and the related income tax implications of these items.

We are required to estimate the cost of certain forms of share-based
compensation, including employee stock options, restricted stock units and our
employee stock purchase plan, and to record a commensurate expense in our income
statement. Share-based compensation expense is a non-cash expense that varies in
amount from period to period and is affected by the price of our stock at the
date of grant. The price of our stock is affected by market forces that are
difficult to predict and are not within the control of management. The value of
our trading securities varies in amount from period to period and is affected by
fluctuations in the market prices of such securities that we cannot predict and
are not within the control of management. The non-GAAP adjustments related to
the impact of our acquisitions and a portion of our interest expense related to
our convertible debentures are non-cash expenses related to such transactions.
Our acquisitions of patent portfolio licenses are non-recurring events in our
business. Accordingly, management excludes all of these items from its internal
operating forecasts and models.

We are using non-GAAP gross profit, non-GAAP research and development expenses,
non-GAAP selling, general and administration expenses, non-GAAP operating
income, non-GAAP other income (expense), non-GAAP income tax expense/tax rate,
non-GAAP net income, and non-GAAP diluted earnings per share which exclude the
items noted in the immediately preceding paragraph, to permit additional
analysis of our performance. Management believes these non-GAAP measures are
useful to investors because they enhance the understanding of our historical
financial performance and comparability between periods. Many of our investors
have requested that we disclose this non-GAAP information because they believe
it is useful in understanding our performance as it excludes non-cash and other
charges that many investors feel may obscure our true operating costs.
Management uses these non-GAAP measures to manage and assess the profitability
of its business. Specifically, we do not consider such items when developing and
monitoring our budgets and spending. As described above the economic substance
behind our decision to exclude such items relates either to these charges being
non-cash in nature or to the one-time nature of the events or, in the case of
our trading securities, because such item is difficult to predict and not within
the control of management. Our determination of the above non-GAAP measures
might not be the same as similarly titled measures used by other companies, and
it should not be construed as a substitute for amounts determined in accordance
with GAAP. There are limitations associated with using non-GAAP measures,
including that they exclude financial information that some may consider
important in evaluating our performance. Management compensates for this by
presenting information on both a GAAP and non-GAAP basis for investors and
providing reconciliations of the GAAP and non-GAAP results.

2 Generally, gross margin fluctuates over time, driven primarily by the mix of
microcontrollers, analog products and memory products sold; variances in
manufacturing yields; fixed cost absorption; wafer fab loading levels; inventory
reserves; pricing pressures in our non-proprietary product lines; and
competitive and economic conditions. Operating expenses fluctuate over time,
primarily due to revenue and profit levels.

3 Diluted Common Shares Outstanding can vary for, among other things, the
trading price of our common stock, the actual exercise of options or vesting of
restricted stock units, the potential for incremental dilutive shares from our
convertible debentures, and the repurchase or the issuance of stock or the sale
of treasury shares.

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)
(Unaudited)

Three Months Ended Six Months Ended
September 30, September 30,
2009 2008 (1) 2009 2008 (1)
Net sales $ 226,661 $ 269,706 $ 419,610 $ 537,878
Cost of sales 103,321 105,553 199,835 210,128
Gross profit 123,340 164,153 219,775 327,750

Operating expenses:
Research and development 29,568 31,343 57,204 62,895
Selling, general and administrative 41,046 45,629 77,429 91,042
Special charge - - 1,238 -
70,614 76,972 135,871 153,937

Operating income 52,726 87,181 83,904 173,813

Other (expense) income, net (1,444 ) 4,953 33 10,255

Income before income taxes 51,282 92,134 83,937 184,068

Income tax provision 6,797 16,414 12,084 32,801

Net income $ 44,485 $ 75,720 $ 71,853 $ 151,267

Basic net income per share $ 0.24 $ 0.41 $ 0.39 $ 0.82

Diluted net income per share $ 0.24 $ 0.40 $ 0.39 $ 0.80

Basic shares used in calculation 183,190 183,615 183,023 184,139
Diluted shares used in calculation 186,922 187,936 186,224 189,493

(1) As adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion.

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

ASSETS

September 30, March 31,
2009 2009 (1)
(Unaudited)
Cash and short-term investments $ 1,363,994 $ 1,389,945
Accounts receivable, net 106,651 88,525
Inventories 108,451 131,510
Other current assets 148,360 138,864
Total current assets 1,727,456 1,748,844

Property, plant & equipment, net 497,958 531,687
Long-term investments 108,729 50,826
Other assets 84,142 80,409

Total assets $ 2,418,285 $ 2,411,766

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and other accrued liabilities $ 84,089 $ 71,714
Deferred income on shipments to distributors 86,261 83,931
Total current liabilities 170,350 155,645

Convertible debentures 337,403 334,184
Long-term income tax payable 75,522 70,051
Deferred tax liability 372,700 365,734
Other long-term liabilities 3,993 3,834

Stockholders' equity 1,458,317 1,482,318

Total liabilities and stockholders' equity $ 2,418,285 $ 2,411,766

(1) As adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion.

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(Unaudited)
(in thousands except per share amounts and percentages)

RECONCILIATION OF GROSS PROFIT TO NON-GAAP GROSS PROFIT
Three Months Ended Six Months Ended
September 30, September 30,
2009 2008 2009 2008
Gross profit, as reported $ 123,340 $ 164,153 $ 219,775 $ 327,750
Share-based compensation expense 1,869 2,053 3,579 3,678
Acquisition-related acquired inventory valuation costs and intangible asset amortization 580 - 1,547 -
Non-GAAP gross profit $ 125,789 $ 166,206 $ 224,901 $ 331,428
Non-GAAP gross profit percentage 55.5 % 61.6 % 53.6 % 61.6 %

RECONCILIATION OF RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES
Three Months Ended Six Months Ended
September 30, September 30,
2009 2008 2009 2008
Research and development expenses, as reported $ 29,568 $ 31,343 $ 57,204 $ 62,895
Share-based compensation expense (3,108 ) (2,640 ) (6,097 ) (5,075 )
Non-GAAP research and development expenses $ 26,460 $ 28,703 $ 51,107 $ 57,820
Non-GAAP research and development expenses as a percentage of net sales 11.7 % 10.6 % 12.2 % 10.7 %

RECONCILIATION OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO NON-GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Three Months Ended Six Months Ended
September 30, September 30,
2009 2008 2009 2008
Selling, general and administrative expenses, as reported $ 41,046 $ 45,629 $ 77,429 $ 91,042
Share-based compensation expense (4,523 ) (3,800 ) (8,822 ) (7,439 )
Acquisition-related intangible asset amortization and other costs (255 ) - (563 ) -
Non-GAAP selling, general and administrative expenses $ 36,268 $ 41,829 $ 68,044 $ 83,603
Non-GAAP selling, general and administrative expenses as a percentage of net sales 16.0 % 15.5 % 16.2 % 15.5 %

RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
Three Months Ended Six Months Ended
September 30, September 30,
2009 2008 2009 2008
Operating income, as reported $ 52,726 $ 87,181 $ 83,904 $ 173,813
Share-based compensation expense 9,500 8,493 18,498 16,192
Acquisition-related acquired inventory valuation costs, intangible asset amortization & other costs 835 - 2,110 -
Special charge - patent license - - 1,238 -
Non-GAAP operating income $ 63,061 $ 95,674 $ 105,750 $ 190,005
Non-GAAP operating income as a percentage of net sales 27.8 % 35.5 % 25.2 % 35.3 %

RECONCILIATION OF OTHER (EXPENSE) INCOME, NET TO NON-GAAP OTHER (EXPENSE) INCOME, NET
Three Months Ended Six Months Ended
September 30, September 30,
2009 2008(1) 2009 2008(1)
Other (expense) income, net, as reported $ (1,444 ) $ 4,953 $ 33 $ 10,255
Convertible debt non-cash interest expense 1,559 1,288 3,067 2,529
Gain on trading securities (2,071 ) - (7,518 ) -
Non-GAAP other (expense) income, net $ (1,956 ) $ 6,241 $ (4,418 ) $ 12,784
Non-GAAP other (expense) income, net, as a percentage of net sales -0.9 % 2.3 % -1.1 % 2.4 %

RECONCILIATION OF INCOME TAX PROVISION TO NON-GAAP INCOME TAX PROVISION
Three Months Ended Six Months Ended
September 30, September 30,
2009 2008(1) 2009 2008(1)
Income tax provision, as reported $ 6,797 $ 16,414 $ 12,084 $ 32,801
Income tax rate, as reported 13.3 % 17.8 % 14.4 % 17.8 %
Share-based compensation expense 1,235 1,537 2,405 2,930
Acquisition-related acquired inventory valuation costs, intangible asset amortization & other costs 109 - 274 -
Special charge - patent license - - 124 -
Convertible debt non-cash interest expense 600 496 1,181 974
Gain on trading securities (797 ) - (2,894 ) -
Non-GAAP income tax provision $ 7,944 $ 18,447 $ 13,174 $ 36,705
Non-GAAP income tax rate 13.0 % 18.1 % 13.0 % 18.1 %

(1) As adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion.

RECONCILIATION OF NET INCOME AND DILUTED NET INCOME PER SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER SHARE

Three Months Ended Six Months Ended
September 30, September 30,
2009 2008(1) 2009 2008(1)
Net income, as reported $ 44,485 $ 75,720 $ 71,853 $ 151,267
Share-based compensation expense, net of tax effect 8,265 6,956 16,093 13,262
Acquisition-related acquired inventory valuation costs, intangible asset amortization and other costs, net of tax effect 726 - 1,836 -
Special charge - patent license, net of tax effect - - 1,114 -
Convertible debt non-cash interest expense, net of tax effect 959 792 1,886 1,555
Gain on trading securities, net of tax effect (1,274 ) - (4,624 ) -
Non-GAAP net income $ 53,161 $ 83,468 $ 88,158 $ 166,084
Non-GAAP net income as a percentage of net sales 23.5 % 30.9 % 21.0 % 30.9 %

Diluted net income per share, as reported $ 0.24 $ 0.40 $ 0.39 $ 0.80
Non-GAAP diluted net income per share $ 0.29 $ 0.45 $ 0.48 $ 0.88

(1) As adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion.

Microchip will host a conference call today, November 4, 2009 at 5:00 p.m.
(Eastern Time) to discuss this release. This call will be simulcast over the
Internet at www.microchip.com. The webcast will be available for replay until
November 11, 2009.

A telephonic replay of the conference call will be available at approximately
7:00 p.m. (Eastern Time) November 4, 2009 and will remain available until 5:00
p.m. (Eastern Time) on November 11, 2009. Interested parties may listen to the
replay by dialing 719-457-0820 and entering access code 6340154.

Cautionary Statement:

The statements in this release relating to improving business conditions,
expecting 150 to 200 basis points of gross margin improvement in the December
quarter, aggressively increasing our manufacturing output so that we can
continue to meet the needs of our customers, expecting our cash generation to
remain strong for the balance of fiscal 2010, expecting revenue to be up 4% to
8% sequentially, continued strong interest in our products, solidifying our
position as the broadest touch-sensing solutions provider, our third quarter
fiscal 2010 outlook (GAAP and Non-GAAP as applicable) for revenue, gross margin,
operating expenses, other income (expense), income tax provision/tax rate,
diluted common shares outstanding, earnings per share, inventory, capital
expenditures for the December quarter and for fiscal 2010 and net cash
generation, our ability to invest in equipment to support the expected revenue
growth of our new products and technologies, our plan to take advantage of
low-cost equipment opportunities, and our calendar year 2010 internal plan (GAAP
and Non-GAAP as applicable) for revenue, gross margin, operating expenses,
operating profit and earnings per share are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements involve risks and uncertainties that could
cause our actual results to differ materially, including, but not limited to:
the strength of the economic recovery or any further weakness or unexpected
fluctuations in the U.S. and global economies, changes in demand or market
acceptance of our products and the products of our customers; the mix of
inventory we hold and our ability to satisfy short-term orders from our
inventory; changes in utilization of our manufacturing capacity and our ability
to effectively ramp our production levels; competitive developments including
pricing pressures; the level of orders that are received and can be shipped in a
quarter; the level of sell-through of our products through distribution; changes
or fluctuations in customer order patterns and seasonality; foreign currency
effects on our business; the impact of any significant acquisitions that we
make; costs and outcome of any current or future tax audit or any litigation
involving intellectual property, customers or other issues; disruptions in our
business or the businesses of our customers or suppliers due to natural
disasters, terrorist activity, armed conflict, war, worldwide oil prices and
supply, public health concerns or disruptions in the transportation system; and
general economic, industry or political conditions in the United States or
internationally.

For a detailed discussion of these and other risk factors, please refer to
Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K
and 10-Q and other relevant documents for free at Microchip`s Web site
(www.microchip.com) or the SEC's Web site (www.sec.gov) or from commercial
document retrieval services.

Stockholders of Microchip are cautioned not to place undue reliance on our
forward-looking statements, which speak only as of the date such statements are
made. Microchip does not undertake any obligation to publicly update any
forward-looking statements to reflect events, circumstances or new information
after this November 4, 2009 press release, or to reflect the occurrence of
unanticipated events.

About Microchip:

Microchip Technology Incorporated is a leading provider of microcontroller and
analog semiconductors, providing low-risk product development, lower total
system cost and faster time to market for thousands of diverse customer
applications worldwide. Headquartered in Chandler, Arizona, Microchip offers
outstanding technical support along with dependable delivery and quality. For
more information, visit the Microchip Web site at www.microchip.com.

The Microchip name and logo, and PIC are registered trademarks of Microchip
Technology Inc. in the USA and other countries. mTouch is a trademark of
Microchip Technology Inc. All other trademarks mentioned herein are the property
of their respective companies.

Microchip Technology Incorporated, Chandler
INVESTOR RELATIONS
J. Eric Bjornholt, CFO, 480-792-7804
Gordon Parnell, Vice President of Business Development
and Investor Relations, 480-792-7374

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