Microchip at Mizuho Conference: Strategic Growth and AI Focus

On Tuesday, 10 June 2025, Microchip Technology Inc. (NASDAQ:MCHP) participated in the Mizuho Technology Conference 2025, providing insights into its strategic direction. The discussion, led by COO Richard Simonsik, highlighted Microchip’s financial performance and growth strategies, focusing on product diversification and AI services. Simonsik expressed optimism about the company’s direction, despite challenges such as competition from China.

Key Takeaways

• Microchip’s book-to-bill ratio was 1.07 for the first quarter, with May bookings the highest in years.
• The company is investing in AI services to enhance customer productivity, not just AI devices.
• Microchip’s manufacturing footprint remains 60% foundry, 40% in-house, with assembly and testing largely in-house.
• Product diversification includes FPGAs, PCIe retimers, and microcontrollers, targeting high-growth markets.
• Improved customer relationships, with direct engagement to address concerns.

Financial Performance

• Bookings showed significant improvement starting in December, with May reaching a multi-year high.
• The distribution inventory stands at 33 days, within the typical range of 28-35 days.
• Signs of increased demand include expediting and pull-ins from customers.

Operational Updates

• Manufacturing is split 60% at foundries and 40% in-house, with 80%-90% of assembly and testing now in-house.
• This shift provides more capacity control and improves margins.

Product Diversification

• FPGAs have seen revenue more than double since the Microsemi acquisition, focusing on industrial control and Industry 4.0.
• PCIe retimers and switches are competing with Broadcom, with Gen 6 samples expected by year-end.
• Microchip is targeting automotive markets with 10BASE-T1S Ethernet, training engineers for automotive backbones.

Microcontrollers Strategy

• Microchip leads in eight-bit MCUs, with a focus on mixed-signal analog SoCs.
• Sixteen-bit MCUs target DSP applications, while sixty-four-bit MCUs are developed for NASA and JPL using RISC-V architecture.

Competition and Customer Relations

• Microchip focuses on Chinese customers exporting products, minimizing exposure to the domestic market.
• Improved customer relations, with 24% reporting better interactions, are attributed to direct engagement by Simonsik.

Future Outlook and AI Strategy

• Investments in AI services aim to simplify design and improve productivity by 20-40%.
• Integration of YouTube videos and data sheets into development environments facilitates learning.

M&A Activities

• Recent acquisitions include TF Semiconductor, Neuronics, and Tekran, enhancing capabilities in high-voltage drivers and AI on the edge.

For further details, please refer to the full transcript below.

Full transcript - Mizuho Technology Conference 2025:

Vijay Rakesh, Senior Semis Analyst, Mizuho: Okay. Good morning, everybody. Thank you for joining us at the Mizuho Tech Conference today. I’m Vijay Rakesh, senior semis analyst for Mizuho. Joining me today is Richard Simonsik, chief operating officer at at Microchip.

Just to give a little background, Richard joined Microchip in 1989, became COO in April of twenty twenty four. Mister Simon Sikh oversees Microchip’s worldwide operations and is leading the company’s AI related efforts. He founded Microchip’s internal analog business in 1998, grew it to $2,000,000,000 So obviously, huge legacy at Microchip. With his thirty five year career at Microchip has a story of sustained innovation and strategic growth. He has been key to developing the AI strategy at Microchip.

As Microchip continues to power everything from automotive systems to IoT devices with mixed signal analog and flash IP solutions, Richard has been very instrumental to all that. With that, let’s welcome Richard Simon Sikh. Thank you for joining us, Richard. And with that, let’s get started. Okay.

Richard, so I want to go back to the earnings side, obviously. Last quarter, you guys talked about when you look at the Microchip business, March was the bottom. And you talked about the book to bill going back above 1% and looking much stronger. Can you talk to how that’s trending? Is that demand continuing to improve across the multiple markets?

And so is that the trajectory you see into June and into the second half twenty twenty five in terms of bottoming the March and kind of coming back up?

Richard Simonsik, Chief Operating Officer, Microchip: All right. So before I start, let me get my legalese out of the way. Thanks, Vijay. Yeah. Uh-huh.

I’ll start by giving a typical disclaimer that during this course of this discussion, we may be making forward looking statements about the future financial performance of Microchip. And, I’ll refer you to our SEC filings, our 10 ks, which was filed last week that identified more important risk factors for the company. So now that that’s out of the way. So book to bill for the first quarter, March, ended about 1.07. You know, our bookings, started to increase The tail end of December really started to improve going into January, even before the so called independence or transition day in the February time period, and it’s continued to improve.

And in fact, May bookings was the highest that we’ve seen in several years. And so bookings have continued to improve. Book to bill has continued to improve as well.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Is that a commentary across all the markets like automotive, industrial?

Richard Simonsik, Chief Operating Officer, Microchip: We’re seeing it come across from all different marketplaces. We’re starting to see that a lot of our customers’ distribution inventory has really started to bottom out. And people are having to replenish now.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. And how about when you look at geographically China versus The U. S? Obviously, the liberation days, there’s been a little bit of flux in some of the issues. But how do you see the trends, geographically between China and The US in terms of the bottoming, I guess?

Richard Simonsik, Chief Operating Officer, Microchip: So within, overall, probably the best way to look at it is distribution inventory. Our distribution inventory is sitting at around thirty three days now. And our typical range on distribution inventory is twenty eight to thirty five days. And so right now, it seems like it’s sitting in a pretty good spot. And so if distribution inventory is sitting there, then our direct customer inventory, 55, is probably sitting in the same range where it’s come down.

So we’re starting to see that signs of expediting or running out or pull ins from various customers.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. I want to get to your bread and butter, I guess, manufacturing, the manufacturing footprint. Your nine point plan actually talks to resizing the manufacturing footprint. Understanding that 40% of microchip is in house and 60% is foundry, can you talk to what the footprint looks like now versus, let’s say, the peak, like, two, three years back when we were in that COVID, kind of in that, you know, energy hype, phase, I guess? How does the footprint manufacturing wise, capacity wise, etcetera, look now versus that?

Richard Simonsik, Chief Operating Officer, Microchip: The footprint is still relatively the same, about sixty forty. That has not changed that much. What has changed is more of assembly and test have come in house. So we’ve taken control of much more of the assembly of our products. We’re probably about 80% as assembled in house, in about the same range, 80 to 90%, depending on which SKUs we’re running, are now tested in house as well.

So a lot of the back end manufacturing has now moved in house. What serves us well is things start to turn around or improve, the place that usually becomes tight in capacity is usually assembly and test.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Yeah. And typically, the back end is is where there’s a lot more cost involved. And, you know, that’s and to bring it in house is very margin accretive for you, would assume. Right?

Richard Simonsik, Chief Operating Officer, Microchip: It is accretive, but more importantly, what it does is allows us to to control that capacity. That’s one less thing that we have to worry about. And and it’s typically, like I said, is is the thing that gets affected on turnarounds in the cyclical semiconductor industry.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. I want to go to the product diversification side, which I know you love to talk about because that’s your goal now with AI. But we’ll come back to microcontrollers, I promise.

Richard Simonsik, Chief Operating Officer, Microchip: Been highly involved in setting the technology strategy for many years at Microchip.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Sure. So talking about product diversification on your FPGA side, the PolarFire, I think you guys talked about June trending higher on the FPGA side. Maybe you can talk to how the bookings look. What are the markets you’re going after on the FPGA? I know you have machine vision and robotics and IoT.

But where are you taking that business from some of those markets, even in defense and military, etcetera, too, right, on the FPGA side? So maybe you can talk to what the roadmap there is.

Richard Simonsik, Chief Operating Officer, Microchip: So the roadmap for quite some time, when we acquired Microsemi, they were largely focused on aerospace and defense market. But there was two key attributes of that product line that was important to medical and industrial markets. One is overall power consumption is about half of any other FPGA manufactured. And they also had tremendous security attributes, which also became very important to communication customers. So anyone connecting anything in data centers or high security areas.

So we’ve taken those two attributes, leveraged them in medical accounts, industrial accounts, communication accounts, and more than doubled that revenue since the acquisition of Microsemi way back, and that continues to grow. And so typically, a customer would look at an account and choose for a very high end FPGA. They choose an Altera or a Xilinx, and then they’ll choose a microchip as a secondary for security features or low power in various applications.

Vijay Rakesh, Senior Semis Analyst, Mizuho: So when you look at that FPGA market, obviously there are, like you said, data center and then there is kind of the other side of the spectrum, which is consumer. Which markets are you kind of trying to go after? Where do you think Microchip has an angle to kind of get in and establish a footprint, I guess?

Richard Simonsik, Chief Operating Officer, Microchip: So the biggest thing that we’re seeing is industrial control. It’s factory inspection, Industry four point zero, optical recognition, that’s probably our largest markets for FPGA in terms of some of the fastest growing.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. And when you’re just part of, Microsemi, I guess it was small, but you you obviously doubled it, as you said. Was it kind of somewhere in that 10% range for you guys? And you think that’s where a lot of the R and D and efforts will be focused?

Richard Simonsik, Chief Operating Officer, Microchip: It’s pretty

Vijay Rakesh, Senior Semis Analyst, Mizuho: good margins too, right?

Richard Simonsik, Chief Operating Officer, Microchip: Yeah. It’s sitting just a little bit over 10%, a very high margin product line and is growing very well. We continue to invest in it, so we’re bringing out even higher end products on a 12 nanometer FinFET technology, and some lower end products that we’re working on too, to have the full range of product technology there.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. Going keeping on that diversification roadmap, one of the products that you guys go after is PCI retimers. And obviously, all the semi investors are pretty in tune with this retimer and PCI roadmap because of how much all the AI, server boards, and data centers are going after, whether it’s scale up or even top of the road top of the rack, NIC cards going into PCI. Can you talk to what the roadmap is there? What do you bring to the table, let’s say, the data center AI AI side?

And how do you expect how do you look to break into that market, I guess?

Richard Simonsik, Chief Operating Officer, Microchip: So it not necessarily breaking into that market. Mike when we acquired this from Microsemi, from PMC Sierra days, they’ve been in PCIe switch market for many years, through PCIe four, five. PCIe six is the next one that we’ll be sampling here before the end of the year. Where we wouldn’t on PCIe six is we have the lowest power per channel, on that, again, focusing on that low power aspect of it. So we’re working with a number of, clients, to design in or give them preliminary information to design in our PCIe six switches and retimers.

We’ve also taken some of the older versions of that technology, PCIe three and four, and we’ve reintroduced those products in a much lower lane count to anywhere from five to 12 lanes for automotive and industrial control. So, as you as you start to advance into AI, more AI applications, you need higher speed data. PCIe is lending itself very well to humanoid robotics and robotics. So we’re on reference designs with Nvidia and Qualcomm on that industrial and robotics and humanoid robotics side where they’re using our, we call it Stanford or PCIe Gen four, switches Yeah. And in, industrial control.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Right. So so you mentioned low power. And obviously, that’s a criteria for both the consumer side. But also, when you look at AI racks, they’re trying to lower the

Richard Simonsik, Chief Operating Officer, Microchip: They’re all trying to reduce the power per lane count.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Right. And so when you look at your PCI products, do do you actually compete with somebody like a Broadcom or, you know, Astera? Or how do you how does that how do you fit into that?

Richard Simonsik, Chief Operating Officer, Microchip: We we compete head on with Broadcom and Astera on on those product lines. Okay. Those are the the two main there’s three main suppliers with Right. PCIe switches, five, four, six, and Ancestera, Broadcom, or Microchip. Got it.

Depending on who you’re aligned with and who you work with, those are the three companies you buy from.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Interesting. Do you work on the consumer side too? You mentioned some of the PCIe two and three and four where you can reduce the lane count. That more of a consumer strategy there?

Richard Simonsik, Chief Operating Officer, Microchip: Automotive. Automotive is a large area where when you start to go to software defined vehicles, the old communication buses that were in car are not good enough. You have to upgrade to PCIe. ASA is another Ethernet based protocol. Or T1 or T1S is a two wire based 48 volt Ethernet protocol.

Vijay Rakesh, Senior Semis Analyst, Mizuho: And if you could size that business, when you look at the PCIe side, how big is it for you? And how does that split between data center and automotive now? Where do you see that going, I guess?

Richard Simonsik, Chief Operating Officer, Microchip: On the PCIe Gen four switches, those are all in design in, so that’s all new revenue streams coming into Microchip. Interesting. On the overall switch tech and PCIe switch technology, we don’t break that out for vendors. But we’re in there with the

Vijay Rakesh, Senior Semis Analyst, Mizuho: top

Richard Simonsik, Chief Operating Officer, Microchip: three for supplying that marketplace.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Talking about the auto industrial side, I think the other market that you guys have been going after is 10 based Ethernet. Again, that’s more looks like more like automotive, you know, kind of replacing the CAN FlexWare kind

Richard Simonsik, Chief Operating Officer, Microchip: of It’s interesting. Was targeted at for automotive, why we came out with it. The design wins, though, are are actually in industrial control. So, two of the largest industrial control manufacturers have designed this into several product lines. Was the big design wins for that product line.

And now we’ve got our automotive companies that will be designing in our product across multiple platforms.

Vijay Rakesh, Senior Semis Analyst, Mizuho: More like a factory automation side, you know?

Richard Simonsik, Chief Operating Officer, Microchip: On the T1S side, those were more in the data center, some of the industrial customers that are building out data centers. And then, the T1S side, one large automotive manufacturer, we just finished almost a week of training where they had about 125 engineers in the company training with us using T1S in automotive backbones for cars.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. And when I look at all these three markets, whether it’s PCI retimer or the FPGA or even the Ethernet side, they should they carry probably much better margins, product margins than traditional analog microcontroller side, I would think. How do you size that business? What’s the growth? How do you see that kind of driving the broader COP margins for the company, I guess, if you look out?

Richard Simonsik, Chief Operating Officer, Microchip: So we’re seeing, when you look at Microchip today, you have different categories. You have microcontrollers. You have analog. You have connectivity and networking, you have compute, which is FPGAs and, 32 bit MPUs and 64 bit RISC V, MPUs. And then the last category is really AIML, right, in terms of how we’re enabling, whether it’s model zoos or accelerators or attaching to other GPUs that are out there as another segment of growth for the company.

So, right now, probably the biggest discussion with almost every customer out there is that next generation of connectivity. So, even though where Microchip is known as the microcontroller company and I met with an investor last night, and he started off the conversation at dinner, you know, talking about a good old eight bits again.

Vijay Rakesh, Senior Semis Analyst, Mizuho: You’re coming to that.

Richard Simonsik, Chief Operating Officer, Microchip: I was like, I can’t sit there and I’m thinking to myself, we are so much more than eight bit microcontroller customer supplier. But, it was fascinating. A lot of our customers are dragging us in to talk about connectivity and the future of networking and connectivity. And then, you know, we’re attaching, believe it or not, all of our microcontrollers, our analog, our timing products to go with that. And that’s one of the reasons why we modified our megatrend approach to really focus on networking and connectivity.

So there’s a lot of investment at Microchip in that area now because it drags everything else along.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. Now, since you told me about your feelings about eight bit, I’ll give you one other question before we get to

Richard Simonsik, Chief Operating Officer, Microchip: eight bit.

Vijay Rakesh, Senior Semis Analyst, Mizuho: But I think if you look at the AI, ADAS, networking, these are all the new markets that you want to go after from a product diversification standpoint. It seems to be where you want to take on your Microchip. But can you talk to how you look at the M and A side? I mean, are you guys do you think you have enough of the IT technology in house given PMC Sierra and Microsemi, all the acquisitions that you guys have made over the years? Or do you need more parts within the AI side, within the networking side to kind of be more you know, current with the where data center is going today, I guess.

Do you see any more M and A tuck ins? Or

Richard Simonsik, Chief Operating Officer, Microchip: Yes. You know, there’s always insatiable need for more technology. We just we acquired small tuck in three weeks ago. We acquired TF Semiconductor, which is a small analog company that did high voltage drivers up to 600 volts for motor control and power supply applications. So most of our high voltage drivers for DC to DC converters and AC to DC and motor control only went up to about 100 volts and they filled in the rest of our product roadmap.

And that was just done about three or four weeks ago. We closed on that.

Vijay Rakesh, Senior Semis Analyst, Mizuho: And Right.

Richard Simonsik, Chief Operating Officer, Microchip: And so we’re continually looking for other technologies or tuck in technologies that improve that total solution. So when you you looked at our our that’s a good example on why would we buy this company, TF Semiconductor. So in high voltage motor control applications, we had the digital controller, we had the timing devices, we had the temperature sensing devices, but we didn’t have the drivers. And so what that did was complete that total system solution. So when you walk into those customers, we’re now selling five or six devices for that motor control application.

So it really filled that out.

Vijay Rakesh, Senior Semis Analyst, Mizuho: I think you had a couple of other ones too, Neuronics and I believe.

Richard Simonsik, Chief Operating Officer, Microchip: Neuronics and Tekran, were in the AI area. And so that allowed us to do modeling and simulation, and and again, focused on low power. So it allows us to to do some of that modeling and simulation on the edge with from a low a very low power standpoint.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it.

Richard Simonsik, Chief Operating Officer, Microchip: And and that’s one of the key themes that we try to have in almost any technology or product we do is to to try to lead from a power standpoint.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. And if you were to size this that those key markets, AI, networking, etcetera, Ethernet connectivity, what percent of the mix would it be? And how do you see that growing out, let’s say?

Richard Simonsik, Chief Operating Officer, Microchip: So we haven’t provided which is more higher growth or faster growth. I think when we look at AI on the edge, we’re seeing a great deal of growth on the product side. One of the things that we decided to do at Microchip was not get so caught up in in providing an AI device, but providing AI services to make designing simpler. And in February, we were the company. Microchip’s been investing in AI for engineering and business and internalizing to the company since twenty seventeen, twenty eighteen.

And we in February, we did the same large language model that we’ve been providing data to and helping ground it and creating a rag model on it to allow our engineers to develop code for our microcontrollers and get 20% to 40% productivity, we essentially unleashed and let that model to be used by all of our customers for free to develop to design in our microcontrollers. So what we’re also providing to our customers are services. Right? Using AIML to get them to designing our products easier and faster. So it’s not just providing AI at the edge, but providing productivity using those tools.

And we’ve been doing quite a bit there since. In fact, that tool has consistently gotten better to now where we’re we’ve essentially vectorized a lot of our YouTube videos and data sheets, and so when they’re in our development environment, they can say, hey, you know what, I don’t understand how this a to d function works. They hit a button, It’ll bring up the YouTube video index to twelve minutes and forty two seconds to the exact spot that someone’s teaching that. And and they can just continue learning and programming with our parts.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Okay. Great. We didn’t know you guys used YouTube. We did a study too. And let’s come to the most interesting part of discussion, microcontrollers.

Maybe you can talk to what how’s eight bit? What how size that business? Obviously, you guys have a road map to sixty four bit and might be 128 bit down the road. And maybe you can walk slowly into the risk side of the business. Obviously, risk is more considered a sub ecosystem than commercially outside.

Maybe you can talk to eight bit, what’s happening there, what’s the competition like, and maybe kind of walk through to the sixty oneone hundred twenty eight.

Richard Simonsik, Chief Operating Officer, Microchip: Okay. So in eight bit, we are still by far the market leader in terms of overall market share. You know, we’re still introducing, innovative products on that side. A typical eight bit product is is really more of a mixed signal analog SoC. You know, when you when you look at that, you know, whether it’s an eight bit core or a 32 bit core on many of our microcontrollers, that’s only about 5% of the die area.

You know, then you’ve got memory and analog. So most of our microcontrollers are made up of predominantly analog, whether it’s d to a converters, a to d converters, drivers, charge pumps, d c to d c converters. So when you think about it, we talk about it as a microcontroller device, but it really is a mixed signal analog device.

Vijay Rakesh, Senior Semis Analyst, Mizuho: So that’s where we differentiate whether it might be a China competitor, might

Richard Simonsik, Chief Operating Officer, Microchip: be doing just a pure microcontroller.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Just you guys might be doing like a full board level solution with a memory and analog

Richard Simonsik, Chief Operating Officer, Microchip: Memory and analog, and that’s how we differentiate. So when a customer gets into that device, they decide they don’t want an AD converter, or they want a D to A, or they want this other peripheral, or they want programmable logic. We now offer, essentially FPGA equivalent logic, so that people can program their own digital, onto our microcontrollers to do what it wants, what you need to do in that particular application. And that’s something unique to Microchip as well.

Vijay Rakesh, Senior Semis Analyst, Mizuho: But you’re also pushing the roadmap to 1632

Richard Simonsik, Chief Operating Officer, Microchip: Yeah. So most of our 16 bit devices are DSP related, digital signal processors. And those are really finely focused on power conversion. So, when you want to do the very low power conversion, whether it’s in data centers or motor control, that’s where that technology is specifically focused. 32 bit is much more of a broad market approach in terms of every little device.

Then we’re using the same philosophy that we did on eight bit with putting as much analog peripherals around that from a support standpoint. And then on 64 bit, the origin of our 64 bit devices came, I I I think most people would not even grasp this in the room, the next generation of space computer is coming from Microchip. It’s not coming from Intel, it’s not coming from AMD. And so, NASA and JPL have contracted with Microchip to produce the next generation space computer, which believe it or not, they’re still using two eighty six like products. And and that’s an Octal 64 bit RISC five processor.

Right? And and and that’s on a 12 nanometer radiation hardened FinFET technology that Microchip had co developed with one of our foundry partners for FPGA. So utilizing a lot of our FPGA technology, we built that into that techno that device, in our sampling and working with a number of aerospace companies, in fact, every aerospace and defense company around the world, on getting that device or part of that family to them. And then what we are doing now is we’re taking offshoots of that device and technology and offering that for industrial control, heavy machinery, industrial control. That particular device has accelerators built in and high performance math functions, so that you can use it for many solutions from an edge AI standpoint.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. I’ll ask one more question. Maybe we’ll open up to the audience after that. Obviously, we talk microcontrollers, a big concern is China. I mean, they are coming in, they’re trying to take share.

What’s your how do you look at that? I mean, has microchip evolved a lot more even if it’s eight bit MCU to kind of stay above the China supply chain? Or do you still see yourself impacted by some of the aggressive price competition that you see there, the supply coming on from there? How do you look at that landscape?

Richard Simonsik, Chief Operating Officer, Microchip: So we did something interesting probably about five or six years ago. There’s three types of customers in China. Right? You’ve got you design with a western company, they then have production in a free trade zone, and then that’s shipped out of China with no tariff incumbents. Right?

And then the tier of customers are Chinese companies that white label products for Western companies, also export market. And then there’s the set of customers in China, which is local companies, local content for local market. Right? That tier of customers, it probably started six years ago when more than that, almost ten years ago, when China made its intention that for local products, they need to have local semiconductor content. And so what we’ve done over the years, if we migrated our focus to the the the the other two types of customers in China.

So we focus mainly on export from China. We don’t focus on China for China. Now, do we sell have products that sell in China for China? Yes. Where there’s products that, they can’t make locally, then then they will buy our products for that market.

But we don’t focus on that.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Got it. So that’s a process that’s mostly complete is what you’re saying. So your exposure to domestic market is fair?

Richard Simonsik, Chief Operating Officer, Microchip: Our our exposure to the domestic market is very low. Got it. Okay. It’s just not been a focus for us. Fantastic.

Because, you know what, you’re you’re not going to fight that nationalistic Yeah. You know, we we felt there was there was no way to fight that.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Sure. Well, they get the opportunity to bid on it.

Richard Simonsik, Chief Operating Officer, Microchip: They get the option. And anything that you move to build there will essentially be built there by some other company. Got it. And so it’s just not our focus.

Vijay Rakesh, Senior Semis Analyst, Mizuho: I got a minute. We’ll take some questions from the audience. Hey. Go ahead.

Richard Simonsik, Chief Operating Officer, Microchip: So some of our Ethernet products use in house SerDes. We have a very large in house SerDes development group. So depending on the product, we’ll use external SerDes from some of the major suppliers, or we’ll do internal SerDes. So we do both.

Vijay Rakesh, Senior Semis Analyst, Mizuho: And then question, defense, historically, you know, for high end FPGAs.

Richard Simonsik, Chief Operating Officer, Microchip: No, we’re still seeing we’re seeing a great deal of design activity in that market. And we’re also seeing a great deal of design activity in the new defense space as well. And so there’s a great deal of focus from Microchip on taking some of the products that we’ve done that were radiation hardened and making them radiation tolerant or downgrading, putting them in plastic packages to make those products usable and approachable by these new lower cost entrants.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Great. Any other questions? Fantastic. We’ve got twenty seconds, Richard. Might be I’ll ask one last question if there’s none other from the audience here.

The customer relationships, I know you one of the nine point plan from CEO, Steve Sanghi, was kind of strengthening, rebuilding some of those relationships. Any thoughts, updates on how you’re seeing that progressing?

Richard Simonsik, Chief Operating Officer, Microchip: So, that has actually gone extremely well. I think that was really kind of overblown. When we did our survey of the 7,000, so we went out there to get real data on this, and we had about 24% where it improved, and then 12% where it degraded, and then that center portion where it was about 64%, where there was no change. So we spent a lot of time on that 12%. Myself, personally, visited probably almost every one of those customers.

And really spent a lot of time trying to understand what we could have done differently and and work with them. We’ve improved the relationships in almost 90% of those where we were on design hold. But we had also won a lot of customers too. Then really fascinating, Sajid and I had met with a new investor that bought several million shares of Microchip. And and they said, you know, we heard about that whole customer thing, but we’ve been researching your company for two years, and I’ve talked to a number of your customers and your distributors before we decided to make the plunge in your stock.

And we made the plunge because we thought the entire market was overblown, because we didn’t find that. We found a lot of your customers love Microchip. And so I asked them for the report and the data, but they weren’t willing to share that with me. But I would love to get that. But I don’t think I’ve seen investors spend two years investigating us, but it’s interesting.

Vijay Rakesh, Senior Semis Analyst, Mizuho: That’s great to hear. Thank you, Richard. I think we are the end of our time, I guess. Any any other questions here? Okay.

I think, that brings us to the end

Richard Simonsik, Chief Operating Officer, Microchip: of the you.

Vijay Rakesh, Senior Semis Analyst, Mizuho: Management. Thank you. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.