The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Timothy Arcuri - UBS - Analyst
: So just to start with, I wanted to open with Microchip's recent leadership change, which has seen you return as the interim CEO, and announcements
you made yesterday that revenues are at the low end of guidance and that Fab 2 will be closed. So I just wanted to open it up and see if you wanted
to say anything about that.
Question: Timothy Arcuri - UBS - Analyst
: That's great. Thank you, Steve. As I hear you talk and I think about how sharp the recovery could be for Microchip in particular, given just the depth
of how far things have come down, I would think that when things come back, they come back pretty sharply and more sharply for you than maybe
some of your peers. Now that might be a while from now, we can debate when that is. But the pace of the recovery ought to be pretty quick because
of your reliance on distribution and all those factors.
So how much does that come into your mind when you're thinking about these cuts? You don't want to overcut. I mean, you've been around a
long time. You've seen a lot of these cycles.
Question: Timothy Arcuri - UBS - Analyst
: Sure. Got it. And Steve, we do all these scrapes of [disti] websites. And microcontrollers, in particular, are sort of an outlier in terms of the inventory
sitting at these [distis]. And it's not just Microchip.
Is there something unique about MCU? I mean, part of it probably was PSP and all the things that you talked about. Yes, there is that lag effect
where you were putting product to customers. But how much of sort of what's going on in microcontroller is industry related? And how would
you tie that back to the environment for demand across the different end markets?
Question: Timothy Arcuri - UBS - Analyst
: Okay. And then can you talk to China? I know this is more of a structural question. China is sort of seen as this melting ice cube, and it's seen as just
only a matter of time until everyone in the industry begins to feel the indigenization of what China is trying to do. From your seat, how much do
you see the indigenization efforts as a threat to your business in China?
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DECEMBER 03, 2024 / 10:35PM, MCHP.OQ - Microchip Technology Inc at UBS Global Technology and AI
Conference
Question: Timothy Arcuri - UBS - Analyst
: As you go through this evaluation, who knows what the new administration will do? But the talk about tariffs and all this kind of stuff, I mean, how
does that play into your thinking about what you want to do?
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