Microchip Technology Inc at UBS Global Technology and AI Conference Summary

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

Question: Timothy Arcuri - UBS AG - Analyst : <_ALACRA_META_ABSTRACT>Let me start off, Steve, you made an announcement yesterday, took the fourth quarter, took the December quarter to the high end of the range. Can you just speak to what the drivers are of that and what you're seeing in the business? Steve Sanghi - Microchip Technology Inc - Chairman of the Board, Interim President and Chief Executive Officer Certainly. Before I begin, I wish to remind you that during this presentation, we'll be making some projections and other forward-looking statements regarding the future financial performance of Microchip. These always involve predictions and the actual results may vary materially. I refer you to Microchip's filings with the SEC regarding some important risk factors about the company. Having said that, Tim, when we made our announcement in November and had a conference call on November 6, we were really worried about the impact on December quarter from the holidays. 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 03, 2025 / 7:55PM, MCHP.OQ - Microchip Technology Inc at UBS Global Technology and AI Conference Customers. December quarter is historically our weakest quarter of the year. Many year-end customers often want to dress up their balance sheet and not hold a lot of inventory. We were just concerned that the turns required may not materialize, even though lead times were short. Usually, when the backlog is low and the lead times are low, turns fill up. But I think we were spooked by the holidays. And so seeing what we saw, taking the risk for the holidays into account, we guided the December quarter to be down minus 1 sequentially. It's usually down minus 3 to minus 5. So it was better than seasonal but probably not good enough. As the month has gone by, the results have been very good. November was a phenomenal month. We had very strong bookings, very good turns. But, in addition to that, a lot of the customers who had placed their backlog for January decided to pull it in. So we're getting a large amount of pull-ins. Some of them were having trouble satisfying because a lot of our inventory is in die and we still have to assemble and test it. I think, with the strength we saw in November, I would say that the holidays are now have been de-risked. Therefore, I had to pull the guidance up. We feel very strong about it. Now, when we told back in November that our March quarter was shaping up to be very good, a number of investors and analysts asked the question: What gave you the confidence that the March quarter would be strong? People can always push their orders out. Well, it was a good question but the reality has been different. In fact, they have pulled it in. They have placed a lot more orders, where the March quarter has even strengthened further beyond what it was on November 6. Good this quarter; very strong March quarter; and the June quarter also looks very strong. I think maybe the well-expected inflection point in the business is here.

Question: Timothy Arcuri - UBS AG - Analyst : I think you talked about customers pulling, even from June into March. Is that what's making March better? Or are these new bookings that are shipping in March? Or is it orders that were in backlog that were supposed to ship in June that are actually pulling into March? 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 03, 2025 / 7:55PM, MCHP.OQ - Microchip Technology Inc at UBS Global Technology and AI Conference

Question: Timothy Arcuri - UBS AG - Analyst : Got it. I think you said November was the best bookings month in three years. Is that what you said?

Question: Timothy Arcuri - UBS AG - Analyst : Okay. Is there any sense, Steve -- so, typically, March is -- I think March is usually up a little bit, seasonally. 1% to 2% is what our math is. You had already said that you expect it to be better than that. This just sits on top of that so you should be quite a bit better than what --

Question: Timothy Arcuri - UBS AG - Analyst : Great. Okay. Let's just talk about the long-term growth rate of the business and what the dynamics are. What do you think changed for customers? Do you think that -- there was some of this backlog aging that you were talking about coming out of last call and it was like -- it was almost as if customers were placing orders on a prospective basis and they weren't sure what was going to happen because of tariff uncertainty or whatever so they were putting orders in the backlog that was longer-dated. What broke in the month of November, do you think?

Question: Timothy Arcuri - UBS AG - Analyst : Brian, can you give us a sense of how big do you think this business can be over time?

Question: Timothy Arcuri - UBS AG - Analyst : How do you win in this market? This is not a market that you participated in much in the past. You're competing with companies who are fairly strong in incumbents? What do you bring --?

Question: Timothy Arcuri - UBS AG - Analyst : So the inflection of that business is more of a 2027 event versus --?

Question: Timothy Arcuri - UBS AG - Analyst : '26, okay? Great. Maybe, Eric, I can ask you about -- I think the goal -- you sold in about $50 million below in (inaudible). Selling was about $50 million below sell-through last quarter. I think the plan was that it would gradually get better but it wouldn't get to parity until maybe June or later in the year, actually. It sounds like maybe distribution gets to parity faster now. Can you just talk about that?

Question: Timothy Arcuri - UBS AG - Analyst : Can you talk about factory loadings? I know you had -- I think you had $51 million in underutilization charges last quarter. You were planning to start to bring the factories back on. Certainly, back end, for sure. But can you talk about the trajectory? It sounds like you're going to turn the factories back on a little more -- a little faster now, actually. 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 03, 2025 / 7:55PM, MCHP.OQ - Microchip Technology Inc at UBS Global Technology and AI Conference

Question: Timothy Arcuri - UBS AG - Analyst : Steve, you talked about product gross margin. I think it was 67.4% last quarter, I want to say. Should we expect it to stay in the 66% to 68% range? Does the Data Center business help maybe bring the product gross margins up?

Question: Timothy Arcuri - UBS AG - Analyst : Great. Steve, what -- if you go back and you look at what you think the business grows at, what the long-term CAGR is of the business, and maybe layering in these new data center opportunities, what do you think -- and it depends on the base because we don't really know what the right base here is because it's shut around so much. But what do you think the long-term CAGR is of your business? 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 03, 2025 / 7:55PM, MCHP.OQ - Microchip Technology Inc at UBS Global Technology and AI Conference

Question: Timothy Arcuri - UBS AG - Analyst : Great. And then, with respect to the fab shutdown -- back to you, Eric -- how much does this play, just in terms of where your utilization is going to be? Do you think now, given that the business is actually getting better -- there was some thinking, maybe there might be some more consolidation. But now that the business is actually getting better, like, how do you think about the fab shutdowns and how it helps margins, going forward? Have we seen the impact from it yet?

Question: Timothy Arcuri - UBS AG - Analyst : Yeah. Yeah.

Question: Timothy Arcuri - UBS AG - Analyst : Great. Steve, I want to ask you about China. You have this JV in China to look more like a Chinese company in China, I think you've said. Can you just talk about that? Can you talk about how that's going? 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 03, 2025 / 7:55PM, MCHP.OQ - Microchip Technology Inc at UBS Global Technology and AI Conference I think you've taken your exposure. You often whittle it down to be -- you say, well, by the time that you whittle it down, it's a

Question: Timothy Arcuri - UBS AG - Analyst : How much do you think, Steve, the microcontroller world is still benefiting from Moore's Law? Does that have some effect on limiting the TAM, at all? Can you talk about just how much do you think that the MCU business is actually growing?

Question: Timothy Arcuri - UBS AG - Analyst : Right. But just that treadmill, do you think that that's, in some way, capping the growth of the market, at all?

Question: Timothy Arcuri - UBS AG - Analyst : You don't think so. Maybe you can talk also about your competitive position in that market. I get questions. Some investors perceive you as overexposed to 8-bit. This is not my words. I'm sure that you get the same questions, as you overexposed to

Question: Timothy Arcuri - UBS AG - Analyst : Do you think, as you push more aggressively into these new opportunities such as data center, does that increase the amount of OpEx and the amount of R&D that you're going to have to spend? 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 03, 2025 / 7:55PM, MCHP.OQ - Microchip Technology Inc at UBS Global Technology and AI Conference

Question: Timothy Arcuri - UBS AG - Analyst : And then, Steve, last question -- and I asked you this on the call last time -- you still have these LTSAs. Your point was these are still around because it helps you stay connected to the customer. Can you give any tangible examples of maybe a situation where you have a customer sitting in LTSA that you're able to then go and say, well, I can sell you something else because we have this connectivity.

Question: Timothy Arcuri - UBS AG - Analyst : Well, that's great. Well, we're out of time. Thank you to all of you.