Microchip Technology Incorporated · NASDAQ:MCHP

Microchip Technology — Investor Presentation (June 2017)

37 slides from Microchip Technology's investor presentation, June 2017

  1. Slide 1: Introducing Microchip 2.0

    Introducing Microchip 2.0 Steve Sanghi, CEO Eric Bjornholt, CFO ©June 2017

  2. Slide 2: Business Update

    Business Update  Net sales for Q1FY18 expected to be +4.5% to +6% sequentially (previous guidance +2% to +7%).  Non GAAP EPS for Q1FY18 expected to be between $1.22 to $1.26 per share (previous guidance $1.17 to $1.27 per share).  Business conditions continue to be very strong. Backlog is strong.

  3. Slide 3: Microchip 1.0

    MICROCHIP 1.0 1. Consistent growth 2. Perennial market share gains 3. High margin business model 4. Shareholder friendly with consistently increasing dividends and free cash flow 5. Successful M&A strategy ©June 2017 3

  4. Slide 4: 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

  5. Slide 5: Total MCU (8/16/32) Market Share %

    % 0 2 4 8 10 14 16 6 12 ©June 2017 CY94 CY95 CY96 CY97 CY98 CY99 CY00 CY01 CY02 CY03 CY04 CQ2 16 includes Atmel CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CQ216 Total MCU (8/16/32) Market Share % 5

  6. Slide 6: Worldwide Microcontroller Market Share

    Worldwide Microcontroller Market Share 2003 2008 2009 2010 2012 2014 2015 2016 No. Rank Rank Rank Rank Rank Rank Rank Rank 1 Renesas Renesas Renesas Renesas Renesas Renesas Renesas Renesas 2 Motorola NEC NEC Freescale Freescale Freescale NXP NXP 3 NEC Freescale Freescale Samsung Infineon ST-Micro ST

  7. Slide 7: Analog Yearly Revenue

    Analog Yearly Revenue (k$) $1,000,000 $950,000 $900,000 $850,000 $800,000 $750,000 $700,000 $650,000 $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 ©June 201

  8. Slide 8: Gross Margin % (Non-GAAP)

    (%) ©June 2017 45 30 35 40 50 55 60 65 Q1FY02 www.microchip.com. Q2FY02 Q3FY02 Q4FY02 Q1FY03 Q2FY03 Q3FY03 Q4FY03 Q1FY04 Q2FY04 Q3FY04 Q4FY04 Q1FY05 Q2FY05 Q3FY05 Q4FY05 Higher Utilization Q1FY06 Richer Product Mix Q2FY06 Q3FY06 Q4FY06 Fab 4 Production start Q1FY07 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08

  9. Slide 9: ~$4.5B Returned To Shareholders

    ©June 2017 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 Q1FY07 $100,000 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Total Dividend Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q

  10. Slide 10: Expanding Our Solutions Through Acquisitions

    Expanding Our Solutions Through Acquisitions HI-TECH Roving Networks Supertex Development Tools Advanced Silicon Bluetooth® & High-Voltage Analog & Motor Drive Mixed-Signal Products Compiler Embedded Wi-Fi® Products ZeroG Micrel Low-Power Hampshire Embedded LSS Novocell Analog, mixed-signal, Wi-Fi®

  11. Slide 11: Microchip 2.0: Be The Very Best Embedded Control Solutions Company Ever

    Microchip 2.0 Be The Very Best Embedded Control Solutions Company Ever ©June 2017 11

  12. Slide 12: Microchip 2.0

    MICROCHIP 2.0 1. Total System Solution in Embedded Control 2. Leading customer preference to design with our MCUs 3. Multiple growth drivers 4. Record gross margin target with multiple drivers 5. Record low opex target with multiple leverage drivers 6. End market mix skewed to Industrial and Automot

  13. Slide 13: Microchip 2.0

    MICROCHIP 2.0 1. Total System Solution in Embedded Control 2. Leading customer preference to design with our MCUs 3. Multiple growth drivers 4. Record gross margin target with multiple drivers 5. Record low opex target with multiple leverage drivers 6. End market mix skewed to Industrial and Automot

  14. Slide 14: Automotive Water Pump

    Automotive Water Pump Micrel Classic Microchip Atmel 3 phase BLDC MIC28512/3 MCP1700 Motor Sw. Reg LDO MIC4605 x 3 3x MOSFET 85V MOSFET pairs dsPIC33EP6 Driver 24LC16B 4MC504 Serial EE MCU MCP6L04 Op Amp MIC2920A ATA663211 LDO LIN Transceiver ©June 2017 14

  15. Slide 15: Router

    Router Micrel Classic Microchip Atmel 3G module MIC69101 KSZ8995 (1.8V) Ethernet Sw. 12V MIC4576 LDO AT91SAM9 Sw. Reg MIC69101 G20B (3.3V) MPU LDO KSZ8081 Ethernet PHY ©June 2017 15

  16. Slide 16: Alarm Panel Uplink

    Alarm Panel Uplink Micrel Classic Microchip Atmel MIC4723 MIC5353 MIC2128 Sw. Reg LDO SMSC Controller MIC4723 MIC94355 Sw. Reg Ripple Blocker MCP73833 MIC2875 Batt. Charger Boost Sw. Reg MIC95410 MIC6143 Load Switch Op Amp MIC2039 Load Switch MIC2039 Load Switch USB4604 USB Hub MIC2039 Load Switch M

  17. Slide 17: PC Dock

    PC Dock Classic Type-C Microchip Micrel UCS3205 USBPD ECC508 20V Vin Power Switch Authentication Atmel UPD350 PIC32 Type C SMSC USBC Manager & Bridge Controller DP-Hub 20V Vin USB5826 USB3.1 6 Port Controller/Hub MIC261201 Sw Reg USB5744 4 Port USB Controller/Hub UPD360 UPD360 Type MIC2033 MIC2033 M

  18. Slide 18: Display Module

    Display Module Micrel Classic Microchip DSC1001 MIC2293-15YML SST MEM’s 24MHz Backlight Oscillator Controller Atmel PWM Parallel Analog I2C/SPI/U LCC FIRMWARE EBI/PMP RGB Driver I2C/SPI/USB I2C/SPI/USB SB PIC32MZ2048EFG100 Vsync GPIO GPIO Hsync Pclk Power SQI GPIO I2C GPIO Host SQI I2C INT SYNC LCD

  19. Slide 19: Microchip 2.0

    MICROCHIP 2.0 1. Total System Solution in Embedded Control 2. Leading customer preference to design with our MCUs 3. Multiple growth drivers 4. Record gross margin target with multiple drivers 5. Record low opex target with multiple leverage drivers 6. End market mix skewed to Industrial and Automot

  20. Slide 20: Which 8-bit chip families would you consider for your next project?

    20 Which of the following 8-bit chip families would you consider for your next embedded project? Microchip PIC 46% 39% Atmel AVR 43% 34% STMicroelectronics ST6, ST7, ST8 18% 19% Freescale HC 13% 17% TI TMS370, 7000 13% 10% Intel 80xx, '251 11% 10% NXP/Philips P80x, P87x, P89x 10% 13% Atmel 80xx 10%

  21. Slide 21: Which 16-bit chip families would you consider for your next project?

    21 Which of the following 16-bit chip families would you consider for your next embedded project? Microchip PIC24 / dsPIC 45% 38% TI MSP430* 42% 43% STMicroelectronics ST9, ST10* 22% 21% Freescale HC16 15% 19% Intel 8086, '186, '286 11% 11% Renesas RL78 11% 12% Freescale HC12 10% 12% Renesas R8C 9%

  22. Slide 22: Which 32-bit chip families would you consider for your next project?

    22 Which of the following 32-bit chip families would you consider for your next embedded project? SiLABS Precision32 (ARM) 5% STMicro STM32 (ARM) 30% Qualcomm (any) 5% Microchip PIC 32-bit (MIPS) 20% Energy Micro EFM32 4% Microsemi SmartFusion2 SoC FPGA (Cortex-M3) 4% Xilinx Zynq (with dual ARM Cort

  23. Slide 23: What's most important when choosing a microprocessor?

    23 What’s most important when choosing a microprocessor? 68% 67% 65% 25% 26% 27% 7% 8% 8% The chip itself The ecosystem surrounding the chip The chip's supplier/vendor (software, tools, support, etc.) 2017 (N = 719) 2015 (N = 960) 2014 (N = 1304) 2017 Embedded Markets Study © 2017 Copyright by Aspen

  24. Slide 24: Which vendor has the best ecosystem for your needs?

    24 Which vendor has the best ecosystem for your needs? (Unaided Open End) Microchip or Atmel (Microchip) 14% Texas Instruments (TI) 14% ST Microelectronics 11% NXP/Freescale/Qualcom 11% Xilinx 5% Intel, Intel Altera 5% ARM 4% Digi-Key 4% Cypress Semiconductor 2% Renesas 2% Arrow 2% 2017 (N = 328) Un

  25. Slide 25: Multiple Growth Drivers

    Multiple Growth Drivers 1. Microcontroller market growth and share gains 2. Analog growth and attach opportunity 3. Wireless and Wired Connectivity – IoT 4. Security 5. Automotive Networking, HMI, Access Control, Lighting and Body Electronics 6. Technology licensing ©June 2017 25

  26. Slide 26: 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

  27. Slide 27: 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 development of tools echo-system 6

  28. Slide 28: Revenue by End Market

    Revenue by End Market Communi- Defense & cation Aerospace 5% 2% Computing 9% Industrial 35% Consumer 24% Automotive 25% ©June 2017 28

  29. Slide 29: Industrial (35% of Sales)

    Industrial (35% of Sales) ©June 2017 29

  30. Slide 30: Automotive (25% of Sales)

    Automotive (25% of sales) ©June 2017 30

  31. Slide 31: Consumer (24% of Sales)

    Consumer (24% of sales) ©June 2017 31

  32. Slide 32: Computing (9% of Sales)

    Computing (9% of sales) ©June 2017 32

  33. Slide 33: Communications (5% of Sales)

    Communications (5% of sales) ©June 2017 33

  34. Slide 34: Defense and Aerospace (2% of Sales)

    Defense and Aerospace (2% of sales) ©June 2017 34

  35. Slide 35: MCHP Financial Information Consolidated

    MCHP Financial Information Consolidated Actual Guidance Q1FY18 Actual Guidance Long-Term Mar. 31, 2017 June 30, 2017 Model**** Net Sales ($MM ) $902.7 $943.3 – $956.8 Gross Margin** 59.2% 59.75% - 60.0% ~ 62.5% Operating Expenses** (% of Sales) 25.7% 23.0% - 23.25% ~ 22.5% Operating Profit 35.6% 36.

  36. Slide 36: Summary

    Summary  A consistent revenue grower and market share gainer with multiple growth drivers  High margin business model and shareholder friendly  Currently strong business conditions with June quarter revenue guidance increased and now expected to be up 4.5% to 6% sequentially  Significant capacit

  37. Slide 37: Thank You!

    MICROCHIP Thank You!

Microchip Technology — Investor Presentation (June 2017) on 6ix