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Nov. 6, 2019, 12:50 p.m. EST

10-Q: MICROCHIP TECHNOLOGY INC

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(EDGAR Online via COMTEX) -- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-looking Statements

This report, including "Part I - Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Part II - Item 1A Risk Factors" contains certain forward-looking statements that involve risks and uncertainties, including statements regarding our strategy, financial performance and revenue sources. We use words such as "anticipate," "believe," "plan," "expect," "future," "continue," "intend" and similar expressions to identify forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors including those set forth under "Risk Factors," beginning at page 53 and elsewhere in this Form 10-Q. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements. We disclaim any obligation to update information contained in any forward-looking statement. These forward-looking statements include, without limitation, statements regarding the following:







                  The effects that uncertain global economic conditions and fluctuations
                  in the global credit and equity markets may have on our financial
                  condition and results of operations;
                  The effects and amount of competitive pricing pressure on our product
                  lines and modest pricing declines in certain of our more mature
                  proprietary product lines;
        


Our ability to moderate future average selling price declines;







                  The effect of product mix, capacity utilization, yields, fixed cost
                  absorption, competition and economic conditions on gross margin;
                  The amount of, and changes in, demand for our products and those of our
                  customers;
                  The impact of trade restrictions and changes in tariffs, including
                  those impacting China;
                  Our expectation that in the future we will acquire additional
                  businesses that we believe will complement our existing businesses;
                  Our expectation that in the future we will enter into joint development
                  agreements or other business or strategic relationships with other
                  companies;
                  The level of orders that will be received and shipped within a quarter,
                  including the impact of our product lead times;
                  Our expectation that our December 2019 days of inventory levels will be
                  flat to up 13 days compared to the September 2019 levels. Our belief
                  that our existing level of inventory will allow us to maintain
                  competitive lead times and provide strong delivery performance to our
                  customers;
                  The effect that distributor and customer inventory holding patterns
                  will have on us;
                  Our belief that customers recognize our products and brand name and use
                  distributors as an effective supply channel;
                  Anticipating increased customer requirements to meet voluntary criteria
                  related to the reduction or elimination of substances in our products;
                  Our belief that our direct sales personnel combined with our
                  distributors provide an effective means of reaching our customer base;
                  The accuracy of our estimates of the useful life and values of our
                  property, assets and other liabilities;
                  Our ability to increase the proprietary portion of our analog,
                  interface, mixed signal and timing product lines and the effect of such
                  an increase;
                  Our belief that our processes afford us both cost-effective designs in
                  existing and derivative products and greater functionality in new
                  product designs;
        


The impact of any supply disruption we may experience;







                  Our ability to effectively utilize our facilities at appropriate
                  capacity levels and anticipated costs;
                  That we adjust capacity utilization to respond to actual and
                  anticipated business and industry-related conditions;
                  That manufacturing costs will be reduced by transition to advanced
                  process technologies;
        


Our ability to maintain manufacturing yields;

Continuing our investments in new and enhanced products;

The cost effectiveness of using our own assembly and test operations;

Our anticipated level of capital expenditures;

Continuation and amount of quarterly cash dividends;







                  The sufficiency of our existing sources of liquidity to finance
                  anticipated capital expenditures and otherwise meet our anticipated
                  cash requirements, and the effects that our contractual obligations are
                  expected to have on them;
        


The impact of seasonality on our business;

Table of Contents







                  Our belief that our IT system compromise has not had a material adverse
                  effect on our business or resulted in any material damage to us;
                  Our expectation that we will continue to be the target of attacks on
                  our data, attempts to breach our security and attempts to introduce
                  malicious software into our IT systems;
        


The accuracy of our estimates used in valuing employee equity awards;







                  That the resolution of legal actions will not have a material effect on
                  our business, and the accuracy of our assessment of the probability of
                  loss and range of potential loss;
        


The recoverability of our deferred tax assets;

Nov 06, 2019

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