Microchip Technology Raises Sales Predictions for First Quarter of Fiscal 2014

 Chandler, Arizona – June 3, 2013 – (NASDAQ: MCHP) –Microchip Technology Incorporated , a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, today revised its financial guidance for its fiscal first quarter of 2014 ending June 30, 2013. Microchip now expects net sales to be up between 4% and 7% sequentially, and non-GAAP earnings per share to be between 52 and 56 cents per share. Microchip previously provided guidance on May 2, 2013 for net sales to be up between 2% and 6% and non-GAAP earnings per share to be between 50 and 54 cents per share. We expect GAAP earnings per share to be between 32 to 36 cents per share compared to our previous guidance for GAAP earnings per share of 30 to 34 cents per share. There will be no conference call associated with this press release. Microchip will be attending the Stephens 2013 Spring Technology Conference on Tuesday, June 4, 2013. A copy of Microchip’s most recent investor presentation can be accessed on the Microchip website at  www.microchip.com/investors.

“We have continued to see a very strong bookings and business environment in the June quarter. We have received excellent visibility from our customers, allowing us to build our products in a good mix and meet our customers’ requirements for the quarter,” said Steve Sanghi, Microchip’s President and CEO.

Mr. Sanghi added, “We expect our inventory to be fully corrected by the end of the June 2013 quarter. Unless we take immediate action, the risk is that our inventory will go too low while the demand is strengthening. Therefore, we have taken immediate steps to end the rotating time off in our fabs and return our employees to full time work earlier than expected. We have asked our front-end as well as back-end manufacturing facilities to prepare to ramp production to meet the needs of our customers.”

“The promise of rotating time off is that it allows us to seamlessly and very quickly ramp production. A layoff back in November of 2012 would have likely resulted in a much longer response time in hiring and training employees before production could be ramped. We instead implemented a rotating time off in our fabs. We proved this as an effective management process in calendar year 2010, and we are proving it again during this cycle,” added Sanghi.

Sanghi concluded, “I want to thank all of our employees for their sacrifices during the down cycle and for keeping the company ready to ramp as the upturn materializes.”

Updated First Quarter Fiscal Year 2014 Outlook:

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

Our Non-GAAP adjustments, where applicable, include the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, inventory valuation costs, restructuring costs, severance costs, earn-out adjustments and legal and other general and administrative expenses associated with acquisitions), and non-cash interest expense on our convertible debentures, the related income tax implications of these items and nonrecurring tax events. We are not able to include a reconciliation of our GAAP to Non-GAAP guidance at this time but will include a reconciliation of our GAAP and Non-GAAP results as part of the press release announcing our results for the June 30, 2013 quarter.