Microchip Technology Inc at KeyBanc Technology Forum Summary

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

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : <_ALACRA_META_ABSTRACT>Obviously, just very topical right now is just kind of the cyclical recovery. I think you and your peers are seeing similar recovery trends. Maybe just take a minute, Eric, just to walk us through what you're seeing from a recovery perspective, maybe talk about bookings

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. Maybe just a couple of follow-ups there. Given that July bookings were your largest in three years, your guidance into third quarter was kind of largely seasonal. So if the bookings were the largest in three years, why not a more optimistic outlook there?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Okay. To that point, I'm wondering if you could just clarify this point that I think Steve had talked about on the call how you're sending out letters to your customers and encourage them to book further out that typically at this point in the cycle, you're going to potentially see an extension of lead times. There may be some concerns that there's maybe some elements of that PSP program. Can you just clarify exactly what you're trying to encourage and what you're trying to do with that sort of notification to customers?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Okay. Have you gotten any sort of feedback from your customers since you've made that sort of announcement on the earnings call?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Okay. Is 45 days the same cancel window that you had previous to COVID?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Okay. Obviously, your June quarter results were extremely strong. Can you just talk about how much of that strength that you saw

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Right. It sounds like you feel very confident that kind of the inventory levels at your end customers are largely normalized. Obviously, if you look at distribution inventory, it's easier to get your handle on that. Can you just walk us through what the process you use because you have so many customers out there to get kind of a sense of where the end customer inventories are and why you have confidence that things are normalized there?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Right. When you look at this recovery and you look at the different segments or end markets, where are the areas where you're seeing the most amount of strength? And maybe what are some of the areas that are still lagging a bit?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. Aerospace defense, obviously, has been a pretty consistent area of strength for you, obviously. Can you just talk about your portfolio there? What's differentiating yourself with that market? And is that largely the Microsemi portfolio there?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. You had acknowledged that there was maybe 6% of your customer base where you had some work to do to kind of improve your relationships there. Obviously, some of this obviously had to do with the follow-up from the PSP program. Can you just talk about what you are doing specifically to improve on those customer relationships? And maybe just give us an update in terms of what kind of progress you're making there?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Right. I think you were also very transparent in acknowledging that maybe the PSP program wasn't kind of the best program to implement during this last pandemic cycle. What have you really learned about it? What safeguards have you implemented in this next recovery? And what are you planning to do differently going forward?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. As part of your nine point program, or turnaround plan, there is some fab rationalization in there. What are you doing in terms of just optimizing your fab footprint to take into consideration that concerns around Section 232 tariffs and some of the geopolitical related tariff risk there?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. One follow-up I had on that is, are you supporting any sort of fungibility between some of your overseas capacity with your US capacity? Is that something that you're working on at all?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Are there any questions? There. Unidentified Participant Kind of (inaudible) mandated, the new kind of architecture, how do you implement that (inaudible) that you talked about, I think, on the call? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 12, 2025 / 5:30PM, MCHP.OQ - Microchip Technology Inc at KeyBanc Technology Forum

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Any other questions? Great. Eric, maybe you can talk about kind of the China market right now. Maybe just walk us through your China for China program. Are you also just given the geopolitical tensions out there, are you seeing more pressure on your Chinese customers to kind of move to local sources? I know there's always been competition in that domestic market, but maybe just talk about that.

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. Can you talk about the pricing environment right now? And maybe also just comment on how does that compare to the pricing environment you're seeing in the China market?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. As part of the turnaround plan, I think you talked about adding an AI business unit. What's your AI exposure today and what are the opportunities that you see to grow that franchise?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. Can you talk about just the puts and takes of how we think about kind of the gross margin expansion as we continue through this recovery?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : Great. Looks like we're out of time. Thank you, Eric.