Financial Performance - Net sales for the three months ended June 30, 2024, were $1,241.3 million, a decrease of 45.8% compared to $2,288.6 million in the same period of 2023[99]. - Net sales for the three months ended June 30, 2024, were $1,241.3 million, a decrease of 45.4% compared to $2,288.6 million for the same period in 2023[101]. - Total revenue for the three months ended June 30, 2024, was $452.2 million, while total revenue for the year ended March 31, 2024, was $2.80 billion[160]. - The company reported a total net loss of $28.4 million for the three months ended June 30, 2024, compared to a net income of $465.2 million for the year ended March 31, 2024[160]. Cost and Expenses - Cost of sales increased to 40.6% of net sales in Q2 2024, up from 31.9% in Q2 2023, leading to a gross profit margin decline from 68.1% to 59.4%[97]. - Operating income dropped to 17.7% of net sales in Q2 2024, down from 39.5% in Q2 2023, reflecting the impact of rising costs and declining sales[97]. - Research and development expenses rose to 19.5% of net sales in Q2 2024, compared to 13.0% in Q2 2023, indicating a significant increase in investment in innovation[97]. - Research and Development (R&D) expenses were $241.7 million, or 19.5% of net sales, a decrease of 19.0% from $298.5 million, or 13.0% of net sales in Q2 2023[122][123]. - Selling, general and administrative expenses decreased to $150.5 million, or 12.1% of net sales, from $203.6 million, or 8.9% of net sales in Q2 2023[125][126]. - Interest expense increased to $61.8 million in Q2 2024 from $47.2 million in Q2 2023, primarily due to higher debt balances and interest rates[129]. Market Conditions - The company is experiencing a weak macroeconomic environment, with customers reducing inventory levels due to business uncertainty and persistent inflation[87]. - The company anticipates ongoing fluctuations in operating results and gross margins due to uncertain global economic conditions and competitive pricing pressures[86]. - Inflation has not materially impacted operating results recently, but significant inflationary pressures could adversely affect profitability[162]. Product Performance - Mixed-signal microcontrollers accounted for 52.0% of net sales in Q2 2024, down from 56.9% in Q2 2023, with a 50.5% decrease in sales volume[102][103]. - Analog product line sales decreased by 47.8% in Q2 2024, representing 26.6% of net sales compared to 27.7% in Q2 2023[105][107]. - Other product line sales increased to 21.4% of net sales in Q2 2024 from 15.4% in Q2 2023, despite a 24.7% decrease in revenue[109][110]. Cash Flow and Financing - Net cash provided by operating activities was $377.1 million for the three months ended June 30, 2024, compared to $993.2 million for the same period in 2023, primarily due to a decrease in net income from $666.4 million[144]. - Net cash used in financing activities was $256.2 million for the three months ended June 30, 2024, significantly lower than $815.1 million for the same period in 2023[149]. - The company repurchased approximately 0.8 million shares for $72.7 million in the first three months of fiscal 2025, compared to 1.8 million shares for $140.3 million in the same period of fiscal 2024[150]. - The company has $288.0 million in outstanding principal amount of Commercial Paper as of June 30, 2024, down from $1.36 billion at March 31, 2024[149]. Investments and Future Plans - A multi-year $800 million capacity expansion plan at Fab 4 in Oregon and an $880 million plan for SiC and silicon production capacity are currently paused until business conditions improve[89]. - The company plans to invest between $125 million and $175 million in equipment and facilities over the next 12 months to support production capabilities for new products and technologies[146]. - The company is pursuing incentives under the CHIPS Act to enhance domestic manufacturing capacity, though the timing and amount of such incentives remain uncertain[155]. - The semiconductor industry is capital intensive, necessitating significant investments in capital equipment and facilities to remain competitive[155]. - The company plans to refinance certain existing notes as they mature, with financing dependent on market conditions and liquidity[155]. Inventory and Assets - Overall inventory levels were $1.31 billion at June 30, 2024, with 237 days of inventory compared to 224 days at March 31, 2024[117]. - As of June 30, 2024, total assets amounted to $9.97 billion, an increase from $8.86 billion as of March 31, 2024[158]. - Current liabilities, excluding intercompany, were $538.5 million as of June 30, 2024, down from $618.1 million as of March 31, 2024[158]. - Long-term debt increased to $6.17 billion as of June 30, 2024, compared to $5.00 billion as of March 31, 2024[158]. - The company has $750.0 million of variable interest rate debt, with a potential increase in annual interest expense of approximately $3.8 million for a 50-basis point rise in interest rates[161]. Tax Matters - The company received a proposed income adjustment from the Malaysian Inland Revenue Board that could result in income taxes and penalties up to $410.0 million if upheld[137]. - The company intends to vigorously defend its positions against tax assessments and believes the assessments are without merit[138]. Dividends - A quarterly dividend of $0.454 per share was declared on August 1, 2024, with an expected aggregate cash dividend of approximately $243.8 million for the September 2024 quarter[151].

Business Overview - The company develops and sells smart, connected embedded control solutions, targeting key markets such as automotive, aerospace, and IoT [19]. - The company targets the 8-bit, 16-bit, and 32-bit mixed-signal microcontroller markets, emphasizing high performance and low power usage [24]. - The company has approximately 123,000 customers, with the top ten accounting for about 12% of total revenue, indicating a risk of revenue impact from contract cancellations [173]. Production and Manufacturing - The company has reduced wafer starts in Fab 2 during fiscal 2024 to align production with demand [39]. - In fiscal 2024, approximately 64% of sales came from products produced at outside wafer foundries [45]. - The company plans to invest $880 million over the next several years to expand silicon carbide and silicon production capacity at Fab 5 [41]. - In fiscal 2024, 59% of assembly requirements and 71% of test requirements were performed in internal facilities [46]. - The company paused most of its $800 million expansion plan at Fab 4 in Q4 of fiscal 2024, with plans to resume as the business outlook improves [40]. - The company is dependent on external wafer foundries and contractors, with 41% of assembly and 29% of testing requirements performed by third parties in fiscal 2024 [96]. - The company has faced challenges in maintaining manufacturing yields, which could adversely affect revenue recognition and operating results [114]. Financial Performance - The company derived 47% of net sales through distributors in fiscal 2024, with Arrow Electronics being the largest distributor at 12% of net sales [55]. - In fiscal 2024, approximately 75% of the company's net sales were made to foreign customers, including 18% in China, 12% in Taiwan, and 10% in Germany [101]. - The company experienced a decline in sales volumes in China due to economic weakness, with significant impacts from trade relations and COVID-19 lockdowns [102]. - The pricing environment stabilized in fiscal 2024 compared to the previous two fiscal years, although supply shortages were still a concern [92]. - The company’s operating results are impacted by seasonality, with stronger revenues typically in the first half of the fiscal year [119]. Market Conditions - The semiconductor industry is highly competitive, with significant price erosion and rapid technological changes impacting market dynamics [57]. - The semiconductor industry is experiencing intense competition, leading to pricing pressures and potential declines in average selling prices [108]. - The company has experienced modest pricing declines in certain proprietary product lines due to competitive conditions [110]. - Economic conditions in the U.S., China, and Europe are uncertain, with rising interest rates and high inflation posing risks to future performance [88]. Risks and Compliance - The company faces risks from global economic conditions that could impact operating results, net sales, and profitability [82]. - The company is exposed to risks related to compliance with laws and regulations regarding privacy, data protection, and cybersecurity, which could impact financial results [1]. - The company faces intensified competition for qualified personnel, particularly in management, technical, and operational roles, which could disrupt operations and affect revenue [145][146]. - The company has implemented various cybersecurity measures, including firewalls and intrusion detection software, but acknowledges that these improvements may not fully prevent future attacks [152]. - The company must comply with evolving cybersecurity regulations, which may incur additional costs and risks of investigations or lawsuits [152]. Intellectual Property - The company maintains a portfolio of U.S. and foreign patents, with expirations ranging from 2024 to 2043, and has numerous additional patent applications pending [59]. - The company has entered into various intellectual property licenses and faces potential litigation regarding patent infringements, which could result in significant costs [60]. - The company is actively seeking patents and licenses to protect its intellectual property, which is crucial for its success, but the process can be expensive and may not guarantee protection [175]. Environmental and Regulatory Compliance - Environmental regulations require compliance related to the use and disposal of chemicals, with potential increases in capital expenditures if regulations change [62]. - The company is subject to stringent environmental regulations that may require costly changes to manufacturing processes and compliance measures [193]. - The company has publicly announced environmental goals, including achieving net zero carbon emissions, which may expose it to heightened scrutiny and risks [203]. Debt and Financial Obligations - The company has outstanding indebtedness of $6.02 billion as of March 31, 2024, with $3.20 billion in Senior Notes and $710.2 million in Convertible Debt [213]. - The company’s ability to service its debt depends on future performance, which is subject to economic and competitive factors [215]. - The company’s financial condition could be adversely impacted if it cannot effectively manage or refinance its current or future debt [213]. Future Outlook - The company anticipates receiving cash benefits from the CHIPS Act for qualifying capital expenditures, although the impact on competitive position remains uncertain [98]. - The success of new product introductions depends on effective selection, timely completion, and market acceptance, with potential delays impacting future operating results [122][123]. - Future adverse conditions in the U.S. or global economies could materially impact distributor operations, leading to increased inventory levels and reduced gross margins [121].

Financial Performance - In the three months ended December 31, 2023, net sales were 100% of total sales, with a gross profit margin of 63.4%, down from 67.8% in the same period of 2022[97]. - Operating income for the three months ended December 31, 2023, was 30.0%, down from 37.4% in the same period of 2022, highlighting a decline in profitability[97]. - Net sales for the three months ended December 31, 2023, were $1,765.7 million, a decrease of 18.6% compared to $2,169.2 million in the same period of 2022[99]. - Net sales for the nine months ended December 31, 2023, increased by 1.7% to $6,308.6 million from $6,206.0 million in the same period of 2022[99]. - Gross profit for the three months ended December 31, 2023, was $1.12 billion, or 63.4% of net sales, down from $1.47 billion, or 67.8% of net sales, in the same period of 2022[117]. Cost and Expenses - The cost of sales increased to 36.6% in Q3 2023 from 32.2% in Q3 2022, indicating rising production costs[97]. - Research and development expenses rose to 15.1% of net sales in Q3 2023, compared to 13.0% in Q3 2022, reflecting increased investment in innovation[97]. - R&D expenses for the three months ended December 31, 2023, were $266.0 million, or 15.1% of net sales, a decrease of $16.4 million, or 5.8%, from the same period last year[124][125]. - Selling, general and administrative expenses for the three months ended December 31, 2023, were $172.2 million, or 9.8% of net sales, a decrease of $30.7 million, or 15.1%, from the same period last year[127][129]. - Amortization of acquired intangible assets for the three and nine months ended December 31, 2023, was $151.3 million and $454.2 million, respectively, compared to $167.4 million and $502.5 million for the same periods in 2022[131]. Inventory and Sales Distribution - Inventory levels were $1.31 billion at December 31, 2023, with 185 days of inventory compared to 169 days at March 31, 2023[119]. - Distributors accounted for approximately 44% of net sales in the three months ended December 31, 2023, down from 48% in the same period of 2022[111]. - Sales in the Americas for the three months ended December 31, 2023, were $510.2 million, representing 28.9% of total net sales[115]. - Mixed-signal microcontrollers accounted for approximately 56.3% of net sales for the three months ended December 31, 2023, consistent with the same percentage in 2022[102]. - Analog product line net sales decreased by 29.0% in the three months ended December 31, 2023, compared to the same period in 2022[107]. - Other product line revenue accounted for approximately 19.3% of net sales for the three months ended December 31, 2023, up from 15.7% in the same period of 2022[109]. Future Investments and Plans - The company plans to invest $880 million to expand silicon carbide and silicon production capacity, including 8-inch wafer production in Colorado Springs, Colorado[90]. - The company plans to invest between $200 million and $300 million in equipment and facilities over the next 12 months to support new products and technologies[150]. - The company is pursuing incentives under the CHIPS Act, with a preliminary agreement for $162 million in grants for U.S. wafer fabrication facilities[150]. Economic Conditions and Challenges - The company has paused most factory expansion activities and reduced planned capital investments through fiscal 2025 due to weak macroeconomic conditions[87]. - The company anticipates continued weak business conditions into the March 2024 quarter, leading to production level reductions and potential inventory management strategies[87]. - The company expects to continue facing challenges from inflation, higher interest rates, and global economic uncertainties impacting customer demand[87]. Cash Flow and Debt - Net cash provided by operating activities was $2.46 billion in the nine months ended December 31, 2023, primarily due to higher net income of $1.75 billion[148]. - Net cash used in investing activities was $320.9 million in the nine months ended December 31, 2023, compared to $448.7 million in the same period in 2022[149]. - Net cash used in financing activities was $2.09 billion for the nine months ended December 31, 2023, compared to $2.49 billion in the same period of 2022[151]. - The company had $281.0 million in cash and cash equivalents at December 31, 2023, an increase of $47.0 million from the March 31, 2023 balance[147]. - As of December 31, 2023, the company had $5.71 billion in total debt, with $4.96 billion being fixed rate debt[158]. - A 50-basis point increase in interest rates would raise expected annual interest expense by approximately $3.8 million[158]. - The company expects to pay a quarterly cash dividend of $0.450 per share in March 2024, totaling approximately $243.0 million[154]. - The company has $2.03 billion remaining for stock repurchases under its authorized program as of December 31, 2023[153]. - The company repurchased approximately 7.4 million shares for $594.7 million in the first nine months of fiscal 2024, compared to 9.6 million shares for $671.9 million in the same period of fiscal 2023[153].

Capacity Expansion and Investment - In fiscal 2023, the company announced an $800 million capacity expansion plan at Fab 4 in Gresham, Oregon, and plans to invest $880 million to expand silicon carbide and silicon production capacity [85]. - The company plans to invest between $250 million and $350 million in equipment and facilities over the next 12 months to support new product growth [140]. - The semiconductor industry is capital intensive, and the company plans to evaluate significant investments in capital equipment and facilities [146]. Financial Performance - For the three months ended September 30, 2023, gross profit was 67.8%, an increase from 67.4% in the same period of 2022 [93]. - Operating income for the six months ended September 30, 2023, was 39.4%, compared to 36.1% in the same period of 2022 [93]. - Net sales for the three months ended September 30, 2023, were $2,254.3 million, an increase of 8.7% compared to $2,073.2 million in the same period of 2022 [96]. - For the six months ended September 30, 2023, net sales reached $4,542.9 million, reflecting a 12.5% increase from $4,036.8 million in the prior year [96]. - Gross profit for the three months ended September 30, 2023, was $1.53 billion, or 67.8% of net sales, compared to $1.40 billion, or 67.4% in the same period of 2022 [113]. Research and Development - Research and development expenses for the three months ended September 30, 2023, were 13.0% of net sales, consistent with the same period in 2022 [93]. - The company is focused on developing new mixed-signal microcontrollers, digital signal controllers, and other advanced products to maintain its competitive position [89]. - The company anticipates continued investment in new and enhanced products, which are significant for maintaining its competitive position [89]. - R&D expenses for Q3 2023 were $292.6 million, representing 13.0% of net sales, an increase of $24.0 million or 8.9% year-over-year [119]. - R&D expenses for the first six months of 2023 totaled $591.1 million, or 13.0% of net sales, up $53.5 million or 10.0% compared to the same period in 2022 [120]. Expenses and Cost Management - Selling, general and administrative expenses decreased to 8.7% of net sales for the three months ended September 30, 2023, down from 9.8% in the same period of 2022 [93]. - Selling, general and administrative expenses for Q3 2023 were $196.6 million, or 8.7% of net sales, a decrease of $5.8 million or 2.9% year-over-year [122]. - Selling, general and administrative expenses for the first six months of 2023 were $400.2 million, or 8.8% of net sales, an increase of $8.9 million or 2.3% compared to the same period in 2022 [123]. - Amortization of acquired intangible assets for Q3 2023 was $151.4 million, down from $167.5 million in Q3 2022 [125]. - Interest expense for Q3 2023 was $46.8 million, a decrease from $53.3 million in Q3 2022, primarily due to debt paydown [127]. Market Conditions and Sales Performance - The company experienced weakening business conditions globally, with customer requests to push out or cancel backlog expected to continue in the December quarter [82]. - Approximately 50% of net sales in the three months ended September 30, 2023, were attributed to distributors, up from 46% in the same period of 2022 [108]. - Sales in the Americas increased to $655.2 million (29.1% of net sales) for the three months ended September 30, 2023, compared to $525.1 million (25.3%) in the same period of 2022 [112]. - Sales in Asia decreased to $1,041.1 million (46.1% of net sales) for the three months ended September 30, 2023, down from $1,132.3 million (54.6%) in the same period of 2022, due to unfavorable conditions in the China market [112]. Cash Flow and Financing Activities - Net cash provided by operating activities for the first six months of 2023 was $1.61 billion, driven by higher net income of $1.33 billion [138]. - Net cash used in financing activities was $1.35 billion for the six months ended September 30, 2023, compared to $1.36 billion for the same period in 2022 [141]. - The company borrowed $750.0 million under the new 2025 Term Loan Facility with interest rates ranging from 1.125% to 1.5% [141]. - As of September 30, 2023, the principal amount of outstanding indebtedness was $6.10 billion, with $39.0 million borrowed under the Revolving Credit Facility [141]. - The company had $256.6 million in cash and cash equivalents as of September 30, 2023, an increase of $22.6 million from March 31, 2023 [137]. Shareholder Returns - In the first six months of fiscal 2024, the company repurchased approximately 6.0 million shares for $480.1 million, compared to 6.5 million shares for $442.4 million in the same period of fiscal 2023 [144]. - Cash dividends paid to stockholders in the first six months of fiscal 2024 totaled $431.6 million, up from $319.1 million in fiscal 2023 [142]. - A quarterly cash dividend of $0.410 per share was paid on September 5, 2023, totaling $222.7 million, with an expected aggregate cash dividend of approximately $238.0 million for the December 2023 quarter [145]. - The company has $2.15 billion remaining for stock repurchases under the authorized program as of September 30, 2023 [144]. - The company has $789.0 million of variable interest rate debt, with a potential $3.9 million increase in annual interest expense for a 50-basis point rise in interest rates [147]. Inflation and Economic Impact - Inflation has not materially impacted operating results recently, but ongoing inflationary pressures could adversely affect operating results if costs cannot be offset by price increases [148].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 0-21184 MICROCHIP TECHNOLOGY INCORPORATED (Exact Name of Registrant as Specified in Its Charter) (State or Oth ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended March 31, 2023 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to __________ Commission File Number 0-21184 MICROCHIP TECHNOLOGY INCORPORATED (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 0-21184 MICROCHIP TECHNOLOGY INCORPORATED (Exact Name of Registrant as Specified in Its Charter) (State or ...