Microchip Technology Inc at Barclays Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Can you talk about how your offering competes with them? You've spoken recently about how you guys have something very similar. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 9:20PM, MCHP.OQ - Microchip Technology Inc at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So you have opportunity within the data center. And then I would assume also as this proliferates to the edge, the microcontroller portfolio, how are you guys seeing your business develop there? Have you really seen an intersection point? Because, I mean, you have your smartphones today, but then there's going to be devices that you would imagine come in the future. Those need to be connected. Where are we at in that transition?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : We've talked to a lot of companies here who have not only the microcontroller portfolio, but also radios that are associated with those. We went through this transition, the connected MCU. Is radio a differentiator? Or is really the microcontroller the differentiator? And how important is it to have the whole suite of both radios and also the compute side?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : One more question on this side just because we've heard increasingly more on this. You've heard the battle of scale ups, right, scale up architectures, Ethernet, UAL et cetera, I would imagine with the switching portfolio. with E.SUN, you would potentially be able to offer some switching products in the back in -- is that something that you guys have talked about. Is that an area of opportunity over the long run in the data center?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : All right. So you're resuming a little on the portfolio side, maybe back up to more of the macro side. So it's been, what, three years now. We've all been waiting for the restart in some of the cyclical end markets, auto and industrial. I was listening to you guys last week -- on the margin, it sounded incrementally better for sure. You guys obviously narrowed guidance as well more positively. Could you talk to the health and wellness of auto and industrial? Is this time to say, okay, we're off to the races here. Or is this still -- things are a little bit better, but we need to wait and see?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So really, it's a conversation with your customers around their inventory levels, which seemingly are better than they were before. And then bookings are a reinforcement of that idea with customers willing to put orders on you for the next three, six, nine months? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 9:20PM, MCHP.OQ - Microchip Technology Inc at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So I did a little napkin math and please correct me if I'm wrong, but if I look at pre-COVID seasonality in the March quarter, it's up modestly, 1% to 2%, tell me if that's off. And then if you think bookings are at our lead times are short, were happening through the December quarter. I think people walked away feeling like, hey, maybe into next year, we could be a little bit better than seasonal. I don't want you to guide. But can you talk about like marrying those two. Is that the right way to kind of think about things broadly?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Different companies that I cover work in different ways with the channel. Could you describe your relationship with the channel? And then is there any behavioral changes that you're seeing either with your direct customers or the channel that vary from one another? Would that indicate any sort of various trends like there's been a concern out there that channel would be pulling a little more because customers are taking inventory, harder to read those guys than direct customers. Can you walk me through any of that?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Yeah. So it sounds like the bookings loan are giving you confidence into the March quarter, but then there might be this second wave of actually restocking some of the channel, which has gotten extremely, extremely lean, is undershipping in demand, given where inventory was historically, that could be another layer on at some point maybe in 2026.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So let's talk about -- the inventory position of your customers, talk about the channel and demand, right? So ISM in the US to a contraction, auto SAAR data, not super great for the next 12 months or at least forecasted. Can you talk about any varying views from just the broad health of those end markets? And then where can you guys see secular growth that gets you a little bit better company growth versus those end markets which are trying to kind of flash?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Have you guys broken out as a percentage of total revenue, how big data center is today? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 9:20PM, MCHP.OQ - Microchip Technology Inc at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays Services Corp - Analyst : I imagine growing as time goes along.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Yeah, I want to jump into that next. So could you talk about A&D? I mean in terms of the companies that we're seeing here, the verticals that are growing outside of AI, you can't really name a better one other than A&D. You have obviously, ground-based radar rates, satellites to some certain extent. Where do you guys --?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So it sounds like broad inventory, coming down in these broader end markets. But if you look at wireline, data center, A&D, like these are areas of secular growth where don't just look at these end markets and what they're doing, look at where the secular growth drivers are that are becoming an increasing percentage of revenue, that can drop some more topline growth.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : So if you look at the different analog and mixed signal stories kind of across the space, there are various ownerships of own fabrication facilities. There's the fab-light model, there's the full ownership. You see Tiago in one direction. Remind us where your strategy is there. And then as inventory comes down, could you help us think about the levers that you get on the operating model as you start to see revenue growth for these opportunities?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Helpful. I want to pivot a little bit to the geography conversation. So something that we've seen in microcontrollers since has been a worry a long time. There is nothing new. You guys have heard this. It's just on at least the low end side, 8-bit microcontrollers. You're seeing an increasing presence from China. Is that in your eyes completely domestic China? Are they able to sell that product globally? Are you seeing more competitive dynamics with China and the markets that you're playing in today? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 9:20PM, MCHP.OQ - Microchip Technology Inc at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Yeah. So you're saying essentially the slow investment in semichemical government has going to China. We've seen it. We've historically played an area where there's competition. We're moving away from that. There's not some sort of cliff that we're approaching where part of revenue that we're addressing today needs to move away over time with China, it's really we're moving on to the new spot.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : You guys have the benefit of conversations with customers that we don't. We look at the ISM data, we look at the auto data, what should we be focused on when we're looking at the health and well being of the markets broadly because you've been doing a lot of this in the face of poor and demand, still, right? Working through inventory, cleaning up the channel like this has all been in an environment where I really haven't seen what is normalized auto and industrial growth. So what are you looking for as a key sign for markets turning around? I think the market feels like there's been a couple of false starts here. What should we be paying out to do? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 9:20PM, MCHP.OQ - Microchip Technology Inc at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays Services Corp - Analyst : You've talked about improving free cash flow and dropping leverage. What are your actions that you're going to take in the near term in terms of capital allocation that gets you there?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Rich and Eric, it sounds like things are at a turning point here. Let's hope that this is the jumping point we've all been waiting for the last couple of years. Thank you so much for being here. I really appreciate it.