Microchip Technology (MCHP) 10-K risk factor changes: FY2020 vs FY2019

| • | general economic, [removed: industry] [added: industry, public health] or political conditions in the U.S. or [removed: internationally;] [added: internationally, including ongoing uncertainty surrounding the COVID-19 virus and its implications;] |

| • | changes in tax regulations and policies in the U.S. and other countries in which we do business including the impact of the Tax Cuts and Jobs Act of 2017 (the [removed: "Act");] [added: Act);] |

| • | our ability to continue to realize the expected benefits of our [removed: acquisitions including our acquisition of Microsemi;] [added: past or future acquisitions;] |

| • | our ability to [removed: ramp] [added: adjust] our factory capacity to [removed: meet] [added: respond to changes in] customer demand; |

| • | availability of raw [removed: materials] [added: materials, supplies] and equipment; |

| • | trade restrictions and changes in tariffs, including those impacting [removed: China;] [added: business in China, as well as those focused on specific companies;] |

| • | disruptions in our [removed: business] [added: business, our supply chain] or our customers' businesses due to [added: public health concerns (including viral outbreaks such as the COVID-19 virus),] cybersecurity incidents, terrorist activity, armed conflict, war, worldwide oil prices and supply, [removed: public health concerns,] fires, natural disasters or disruptions in the transportation system; |

| • | costs and outcomes of any current or future tax audits or any [removed: litigation] [added: litigation, investigation] or claims involving intellectual property, our Microsemi acquisition, customers or other issues; |

Uncertain global economic [removed: conditions, the ongoing economic recovery] and [removed: uncertainty surrounding the strength and duration of] [added: public health conditions,] such [removed: recovery] [added: as the COVID-19 virus,] have caused [added: or may cause] our operating results to fluctuate significantly and make comparability between periods less meaningful.

[removed: On] [added: In] May [removed: 29,] 2018, we completed our acquisition of Microsemi, which was our largest and most complex acquisition [removed: ever.][added: ever, and, in April 2016, we completed our acquisition of Atmel.]

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

In particular, in connection with our Microsemi and Atmel acquisitions, we became involved with third-party claims, [removed: litigation] [added: litigation, governmental investigations] and disputes related to such businesses and transactions.

See Note [removed: 13] [added: 12] to our consolidated financial statements for information regarding [removed: pending litigation.][added: such matters.]

Further, if we decide to divest assets or a business, we may encounter difficulty in finding or completing divestiture opportunities or alternative exit [removed: strategies] [added: strategies, which may include site closures,] on acceptable terms or in a timely manner.

Even following a [removed: divestiture,] [added: divestiture or other exit strategy,] we may be contractually obligated with respect to certain continuing obligations to [added: former employees,] customers, vendors, landlords or other third parties.

We may also have continuing obligations for pre-existing liabilities related to the [added: former employees,] assets or businesses.

As of March 31, [removed: 2019,] [added: 2020,] the principal amount of our outstanding indebtedness was [removed: $11.66] [added: $10.59] billion.

In connection with our acquisition of Microsemi, [removed: which closed on May 29, 2018,] we incurred debt consisting of $3.10 billion under our revolving line of credit, $3.00 billion under our [removed: new] term loan facility, and $2.00 billion in [removed: newly issued] senior secured notes.

At March 31, [removed: 2019,] [added: 2020,] we had [removed: $3.27] [added: $2.39] billion in outstanding borrowings under our revolving line of credit which provides [removed: $3.60] [added: up to $3.57] billion of revolving loan commitments that terminate in 2023.

At March 31, [removed: 2019,] [added: 2020,] we had [removed: $1.91] [added: $1.72] billion of outstanding borrowings under [removed: the] [added: our] term loan facility.

Servicing our current debt [removed: will require] [added: requires] a significant amount of cash, [removed: and] we may not have sufficient cash flow from our business to fund future [removed: payments.][added: payments and any adverse changes in our credit ratings could increase our borrowing costs and could adversely affect our ability to access the debt markets.]

Our ability to make scheduled payments of principal, to pay interest on or to refinance our indebtedness, including our outstanding convertible debt and [removed: debt incurred to finance our acquisition of Microsemi,] [added: senior notes,] depends on our future performance, which is subject to economic, financial, competitive and other [removed: factors.][added: factors including uncertainties related to the COVID-19 virus.]

Because turns orders are difficult to predict, [added: especially in times of economic volatility such as those caused by the COVID-19 virus where customers may increase or decrease order levels within the quarter,] varying levels of turns orders make it more difficult to forecast net sales.

The average selling prices of our [removed: microcontroller] [added: microcontroller, FPGA,] and proprietary analog, interface, mixed signal and timing products have remained relatively constant, while average selling prices of our memory and non-proprietary analog, interface, mixed signal and timing products have declined over time.

Specifically, during fiscal [removed: 2019] [added: 2020] and fiscal [removed: 2018,] [added: 2019,] approximately [removed: 57%] [added: 61%] and [removed: 42%,] [added: 57%,] respectively, of our net sales came from products that were produced at outside wafer foundries.

Specifically, during fiscal [removed: 2019,] [added: 2020,] approximately [removed: 62%] [added: 55%] of our assembly requirements and [removed: 51%] [added: 46%] of our test requirements were performed by third party contractors compared to approximately [removed: 58%] [added: 62%] of our assembly requirements and [removed: 36%] [added: 51%] of our test requirements during fiscal [removed: 2018.][added: 2019.]

Our reliance on third party contractors and foundries [added: has] increased as a result of our acquisitions [added: including our acquisitions] of [removed: Microsemi, Atmel, Micrel, SMSC, Supertex] [added: Microsemi] and [removed: ISSC.][added: Atmel.]

Our future operating results could suffer if any contractor were to experience financial, operational or production difficulties or situations when demand exceeds capacity, or if they were unable to maintain manufacturing yields, assembly and test yields and costs at approximately their current [removed: levels,] [added: levels due to disruptions from the COVID-19 virus,] or if the countries in which such contractors are located were to experience political upheaval or infrastructure disruption.

In fiscal [added: 2020 and fiscal] 2019, we operated at below normal capacity levels resulting in [removed: an] unabsorbed capacity [removed: charge] [added: charges] of [removed: $19.0 million.][added: $47.2 million and $16.2 million, respectively.]

Broad fluctuations in our overall business, changes in semiconductor industry and global economic [removed: conditions,] [added: conditions (including the impact of the COVID-19 virus or trade tensions)] and our acquisition activity (including our acquisition of Microsemi) have had and can have a more significant impact on our results than seasonality.

Sales to distributors accounted for approximately [removed: 51%] [added: 50%] of our net sales in fiscal [removed: 2019] [added: 2020] and approximately [removed: 54%] [added: 51%] of our net sales in fiscal [removed: 2018.][added: 2019.]

Any future adverse conditions in the U.S. or global economies [added: (including the impact of the COVID-19 virus)] or in the U.S. or global credit markets could materially impact the operations of our distributors.

We may lose sales if suppliers of raw materials, components or equipment fail to meet our or our customers' needs or increase costs due to [added: the impact of the COVID-19 virus,] increased tariffs or other factors.

Also, the [added: impact of the COVID-19 virus or the] application of trade restrictions or tariffs by the U.S. or other countries may adversely impact the industry supply chain.

For example, [added: in 2019,] the U.S. government [removed: has recently] increased tariffs on products that have China as their country of origin and which are imported into the U.S. Likewise, the China government [removed: has] increased tariffs on products that have the U.S. as their country of origin and which are imported into China.

We have taken steps to [added: attempt to] mitigate the costs of these tariffs on our business.

Although these increases in tariffs did not result in significant increases to the operating costs of our business, they did, however, adversely impact demand for our products during fiscal [added: 2020 and fiscal] 2019.

The [removed: recent] additional tariffs imposed on components or equipment that we or our suppliers source from China will increase our costs and could have a material adverse impact on our operating results in the three months ending June 30, [removed: 2019] [added: 2020] or future periods.

The materials, components and equipment necessary for their businesses could become more difficult to obtain for various reasons not limited to business interruptions of suppliers, consolidation in their supply chain due to mergers and acquisitions, [added: the impact of the COVID-19 virus] or application of trade restrictions or tariffs that impair sourcing flexibility or increase costs.

[removed: Interruptions] [added: We 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 and any interruptions] in our IT systems, unauthorized access to our IT systems or improper handling of data, could adversely affect our business.

| • | the level of order cancellations or push-outs due to the impact of the COVID-19 virus or other factors; |

| • | global economic and financial uncertainty due to the COVID-19 virus or other factors; |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

In March 2020, we financed the settlement of $615.0 million in principal amount of our 2015 Senior Convertible Debt through borrowings under our bridge loan facility.

At March 31, 2020, we had $3.87 billion of outstanding principal related to our convertible debt consisting of $2.77 billion of aggregate principal value issued in 2017 and $1.11 billion of principal value issued in 2015.

Our senior secured notes are rated by certain major credit rating agencies.

These credit ratings impact our cost of borrowing and our ability to access the capital markets and are based on our financial performance and certain financial metrics including debt levels.

There can be no assurance that we will be able to maintain our current credit ratings.

Any downgrade of our credit rating by any of the major credit rating agencies could result in increased borrowing costs and could adversely affect our ability to access the debt markets to refinance our existing debt or finance future debt.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

| • | the relative impact of the COVID-19 virus on us relative to our competitors; |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

We routinely evaluate the effectiveness of the containment mechanisms that were implemented and continue to implement additional measures from time to time.

We have analyzed and continue to analyze the amount and content of the information that was compromised.

Although this material weakness in our internal controls was remediated in fiscal 2020, there can be no assurance that similar control issues will not be identified in future periods.

Due to the types of products we sell and the significant amount of sales we make to government agencies or customers whose principal sales are to U.S. government agencies, we expect to continue to be the target of attacks on our data, attempts to breach our security, network compromises and attempts to introduce malicious software into our IT systems.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

reports and there can be no assurance that similar control issues will not be identified in future periods.

For example, recent restrictions on travel have adversely impacted our manufacturing operations in the Philippines and our subcontractors' manufacturing operations in Malaysia and China.

Similar challenges have arose for our logistics service providers, which adversely impacted their ability to ship product to our customers.

In particular, recent restrictions on travel have impacted our manufacturing operations in the Philippines and our subcontractors' manufacturing operations in Malaysia and China.

Similar challenges have arisen for our logistics service providers, which has impacted their ability to ship product to our customers.

The impact of such interruptions on our lead times and ability to fulfill orders was minimal in the fiscal quarter ended March 31, 2020, but we have seen increased impacts since then which we expect to adversely impact our business in the fiscal quarter ended June 30, 2020 and which could continue to adversely impact our business in future periods.

In the future, local governments could require us to temporarily reduce production further or cease operations at any of our facilities and we could experience constraints in fulfilling customer orders.

We have received a greater number of order cancellations and requests by our customers to reschedule deliveries to future dates.

Some customers are requesting order cancellations within our firm order window and are claiming applicability of force majeure clauses.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

Such customer and licensee disruptions are expected to adversely impact our business in the fiscal quarter ended June 30, 2020 and we cannot accurately predict whether such disruptions will continue in subsequent periods.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

For example, in fiscal 2019, the U.S. Commerce Department banned U.S. companies from selling products or transferring technology to ZTE, a Chinese company, and certain of its subsidiaries.

This ban was lifted in July 2018.

In fiscal 2020, the U.S. Commerce Department banned U.S. companies from selling products or transferring technology to certain Chinese companies, including Huawei and certain of its subsidiaries.

Recent amendments made to the Export Administration

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

Regulation (EAR) pursuant to prohibitions of items with a “military end use” in China, Russia, and Venezuela, 85 Fed.

Reg.

23459, and elimination of EAR License Exception CIV, 85 Fed.

Reg.

In addition, in April 2016, we completed our acquisition of Atmel; and in August 2015, we

completed our acquisition of Micrel.

In February 2017, we issued $2.65 billion of aggregate principal value of senior and junior convertible debt.

We operated at normal capacity levels during fiscal 2018.

We are continuing to evaluate the effectiveness of the containment plan and the amount and content of the information that was compromised and to implement additional remedial actions.

However, we are still evaluating the amount and type of data that was compromised and there can be no assurance as to what the impact of this IT system compromise will be.

For additional information, refer to Item 9A "Controls and Procedures."

As a result of the

We are in the process of remediating the material weaknesses, but our efforts may not be successful.

however, we cannot be certain that our actions will be effective to avoid a significant impact on our business in the event of a disaster or other business interruption.

In the event of customer disruptions, sales of our products may decline and our revenue, profitability and financial condition could suffer.

In fiscal 2019, our acquisition of Microsemi and our transition to sell-in revenue recognition contributed to the changes in net sales by country.

| • | public health conditions; and |

perform manufacturing services for many customers, cancellation of customer contracts could have an adverse impact on our revenue and profits.

The loss of the

if we choose not to implement such practices, such customers may disqualify us as a supplier, resulting in decreased revenue opportunities.

increase our selling and/or manufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products, which could have a material adverse effect on our business, results of operations or financial conditions.

| • | global economic and financial conditions; |

| • | any other acquisitions we pursue or complete; and |

No material intangible asset impairment charges were recorded in fiscal 2018.

intention of funding these plans.

Note Regarding Forward-looking Statements

This report, including "Item 1 – Business," "Item 1A – Risk Factors," and "Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations," 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 12 and elsewhere in this Form 10-K.

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 impact of disruptions to our manufacturing and the distribution of our products, including disruptions due to the COVID-19 virus and related government responses; |

| | |

| --- | --- |

| • | That we have seen increased impacts since then which we expect to adversely impact our business in the fiscal quarter ended June 30, 2020; |

| | |

| --- | --- |

| • | That local governments could require us to temporarily reduce production further or cease operations at any of our facilities and we could experience constraints in fulfilling customer orders; |

| | |

| --- | --- |

| • | Our belief that our actions to combat the spread of the COVID-19 virus will help preserve the health of our team members, customers, suppliers, visitors to our facilities, people with whom we conduct business and our communities, and allow us to safely continue operations; |

| | |

| --- | --- |

| • | Our inability to predict how the COVID-19 virus outbreak, and actions taken by others in response to it, will affect our business; |

| | |

| --- | --- |

| • | 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; |

| | |

| --- | --- |

As of March 31, [removed: 2019,] [added: 2020,] our long-term debt totaled [removed: $11.66] [added: $10.59] billion.

We have no interest rate exposure to rate changes on our fixed rate debt, which totaled [removed: $6.48] [added: $5.86] billion as of March 31, [removed: 2019.][added: 2020.]

We do have interest rate exposure with respect to the [removed: $5.18] [added: $4.73] billion balance of our variable interest rate debt outstanding as of March 31, [removed: 2019.][added: 2020.]

A 50 basis point increase in interest rates would impact our expected annual interest expense for the next 12 months by approximately [removed: $26.0] [added: $23.6] million.

[Table of Contents](#s9C6CB149155E50BA880434F63B790EC2)

| | |

| --- | --- |

| Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |

None.

[removed: We develop, manufacture] [added: Microchip Technology Incorporated ("Microchip" or the "Company") develops, manufactures] and [removed: sell] [added: sells] specialized semiconductor products used by [removed: our] [added: its] customers for a wide variety of embedded control applications.

On May 29, 2018, [removed: we] [added: the Company] completed [removed: our] [added: its] acquisition of Microsemi [removed: Corporation (Microsemi),] [added: Corporation,] a publicly traded company headquartered in Aliso Viejo, California.

[removed: We] [added: The Company] paid an aggregate of approximately $8.19 billion in cash to the stockholders of Microsemi.

The total consideration transferred in the acquisition, including approximately $53.9 million of non-cash consideration for the exchange of certain share-based payment awards of Microsemi for stock awards of [removed: Microchip,] [added: the Company,] was approximately $8.24 billion.

In addition to the consideration transferred, [removed: we] [added: the Company] recognized in [removed: our] [added: its] consolidated financial statements $3.23 billion in liabilities of Microsemi consisting of debt, taxes payable and deferred, [removed: pension obligations,] restructuring, and contingent and other liabilities of which $2.06 billion of existing debt was paid off.

[removed: We] [added: The Company] financed the purchase price using approximately $8.10 billion of borrowings consisting of $3.10 billion [removed: of loans] under [removed: our] [added: its amended and restated] revolving line of credit (the "Revolving Credit Facility"), $3.00 billion of term loans ("Term Loan Facility") provided under [removed: our] [added: the Company's] amended and restated [removed: Credit Agreement,] [added: credit agreement (the "Credit Agreement"),] and $2.00 billion in newly issued senior secured notes.

[removed: We] [added: The Company] incurred $22.0 million in [added: acquisition] costs related to the acquisition.

As a result of the acquisition, Microsemi became a wholly owned subsidiary of [removed: Microchip.][added: the Company.]

[removed: Our] [added: The Company's] primary reason for this acquisition was to expand [removed: our] [added: the Company's] range of solutions, products and capabilities by extending [removed: our] [added: its] served available market.

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

[removed: Our] [added: The Company's] strategic focus is on embedded control solutions, including:

| • | general purpose and specialized microcontrollers and [removed: 32-bit] microprocessors |

[removed: | • |] [added: -] wired and wireless connectivity products [removed: |]

[removed: | • |] [added: -] development tools and related software [removed: |]

[removed: | • |] [added: -] analog, interface, mixed signal, timing, timing systems and security products [removed: |]

[removed: | • |] [added: -] discrete diodes and [removed: MOSFETS |][added: Metal Oxide Semiconductor Field Effect Transistors (MOSFETS)]

[removed: | • |] [added: -] memory products [removed: |]

[removed: | • |] [added: -] technology licensing [removed: |]

[removed: We provide] [added: The Company provides] cost-effective embedded control solutions that also offer the advantages of small size, high performance, extreme low power usage, wide voltage range operation, mixed signal integration, and ease of development, thus enabling timely and cost-effective integration of [removed: our] [added: the Company's] solutions by [removed: our] [added: its] customers in their end products.

[removed: *Field-Programmable Gate Array] [added: - field-programmable gate array] (FPGA) [removed: Products*][added: products]

[removed: *Analog, Power, Interface, Mixed Signal] [added: | Analog, interface, mixed signal] and [removed: Timing Products*][added: timing products | 1,511.1 | | | | 1,530.7 | | |]

*Technology [removed: Licensing*][added: Licensing Segment*]

| [removed: • |] United States | [added: $ | 515.0 | | | $ | 521.1 | |]

| | March 31, | | | | | | | [removed: | | | |]

| | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | |

| Thailand | [removed: 209.3 | | | | 215.5] [added: 174.4] | | | | [removed: 178.0] [added: 209.3] | | |

| Various other countries | [removed: 266.3 | | | | 159.1] [added: 306.2] | | | | [removed: 116.8] [added: 266.3] | | |

| Total long-lived assets [removed: | $ | 996.7 | |] [added: (1)] | $ | [removed: 767.9] [added: 995.6] | | | $ | [removed: 683.3] [added: 996.7] | |

With the exception of Arrow Electronics, [removed: our] [added: the Company's] largest distributor, which made up 10% of [removed: our] net sales, no other distributor or end customer accounted for more than 10% of [removed: our] net sales in fiscal [added: 2020 and fiscal] 2019.

In fiscal [removed: 2018 and fiscal 2017,] [added: 2018,] no distributor or end customer accounted for more than 10% of [removed: our] net sales.

[removed: Backlog][added: | Backlog | 1 | | 12.3 | | |]

[removed: As of] [added: | |] March 31, [removed: 2019, we had 18,286 employees.][added: 2019 | | | | | | | | | | |]

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| ASSETS | | | | | | | |

| | 2020 | | | | 2019 | | |

| Cash and cash equivalents | $ | 401.0 | | | $ | 428.6 | |

| Short-term investments | 2.0 | | | | 2.3 | | |

| Accounts receivable, net | 934.0 | | | | 880.6 | | |

| Inventories | 685.7 | | | | 711.7 | | |

| Other current assets | 194.5 | | | | 191.6 | | |

| Total current assets | 2,217.2 | | | | 2,214.8 | | |

| Property, plant and equipment, net | 876.1 | | | | 996.7 | | |

| Goodwill | 6,664.8 | | | | 6,663.9 | | |

| Intangible assets, net | 5,702.3 | | | | 6,685.6 | | |

| Long-term deferred tax assets | 1,748.5 | | | | 1,677.2 | | |

| Other assets | 217.2 | | | | 111.8 | | |

| Total assets | $ | 17,426.1 | | | $ | 18,350.0 | |

| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |

| Accounts payable | $ | 246.8 | | | $ | 226.4 | |

| Accrued liabilities | 781.8 | | | | 787.3 | | |

| Current portion of long-term debt | 608.8 | | | | 1,360.8 | | |

| Total current liabilities | 1,637.4 | | | | 2,374.5 | | |

| Long-term debt | 8,873.4 | | | | 8,946.2 | | |

| Long-term income tax payable | 668.4 | | | | 756.2 | | |

| Long-term deferred tax liability | 318.5 | | | | 706.1 | | |

| Other long-term liabilities | 342.9 | | | | 279.5 | | |

| Stockholders' equity: | | | | | | | |

| Preferred stock, $0.001 par value; authorized 5,000,000 shares; no shares issued or outstanding | — | | | | — | | |

| Common stock, $0.001 par value; authorized 450,000,000 shares; 258,391,231 shares issued and 245,325,643 shares outstanding at March 31, 2020; 253,232,909 shares issued and 237,589,501 shares outstanding at March 31, 2019 | 0.2 | | | | 0.2 | | |

| Additional paid-in capital | 2,675.1 | | | | 2,679.6 | | |

| Common stock held in treasury: 13,065,588 shares at March 31, 2020; 15,643,408 shares at March 31, 2019 | (500.6 | | ) | | (582.2 | | ) |

| Accumulated other comprehensive loss | (21.6 | | ) | | (20.7 | | ) |

| Retained earnings | 3,432.4 | | | | 3,210.6 | | |

| Total stockholders' equity | 5,585.5 | | | | 5,287.5 | | |

| Total liabilities and stockholders' equity | $ | 17,426.1 | | | $ | 18,350.0 | |

See accompanying notes to consolidated financial statements

F-6

Our product portfolio comprises general purpose and specialized 8-bit, 16-bit, and 32-bit microcontrollers, 32-bit microprocessors, field-programmable gate array (FPGA) products, a broad spectrum of high-performance linear, mixed-signal, power management, thermal management, discrete diodes and Metal Oxide Semiconductor Field Effect Transistors (MOSFETS), radio frequency (RF), timing, timing systems, safety, security, wired connectivity and wireless connectivity devices, as well as Serial Electrically Erasable Programmable Read Only Memory (EEPROM), Serial Flash memories, Parallel Flash memories, Serial Electrically Erasable Random Access Memory (EERAM) and Serial Static Random Access Memory (SRAM).

We also license Flash-IP solutions that are incorporated in a broad range of products.

Our synergistic product portfolio targets thousands of applications worldwide and a growing demand for high-performance designs in the automotive, aerospace, defense, space, communications, computing, consumer and industrial control markets.

We comply with several quality systems, including: ISO9001 (2015 version), IATF16949 (2016 version), AS9100 (2016 version), and TL9000.

Microchip Technology Incorporated was incorporated in Delaware in 1989.

Our executive offices are located at 2355 West Chandler Boulevard, Chandler, Arizona 85224-6199 and our telephone number is (480) 792-7200.

Our Internet address is *www.microchip.com*.

We post the following filings on our website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission:

| | |

| --- | --- |

| • | our annual report on Form 10-K |

| • | our quarterly reports on Form 10-Q |

| • | our current reports on Form 8-K |

| • | our proxy statement |

| • | any amendments to the above-listed reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 |

All of our SEC filings on our website are available free of charge.

The information on our website is not incorporated into this Form 10-K.

Industry Background

Competitive pressures require original equipment manufacturers (OEM) of a wide variety of products to expand product functionality and provide differentiation while maintaining or reducing cost.

To address these requirements, manufacturers often use integrated circuit-based embedded control systems that enable them to:

| • | differentiate their products |

| • | replace less efficient electromechanical control devices |

| • | reduce the number of components in their system |

| • | add product functionality |

| • | reduce the system level energy consumption |

| • | make systems safer to operate |

| • | decrease time to market for their products |

| • | significantly reduce product cost |

Embedded control systems have been incorporated into thousands of products and subassemblies in a wide variety of applications and markets worldwide, including:

| • | automotive comfort, safety, information and entertainment applications |

| • | remote control devices |

| • | handheld tools |

| • | large and small home appliances |

| • | portable computers and accessories |

| • | robotics |

| • | energy monitoring |

| • | thermostats |

| • | motor controls |

| • | security systems |

| • | smoke and carbon monoxide detectors |

Refer to Note [removed: 13] [added: 12] to our consolidated financial statements for information regarding legal proceedings.

[removed: | x | Annual] [added: ☒Annual] Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [removed: For the fiscal year ended March 31, 2019 |]

[removed: | o | Transition] [added: ☐Transition] report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [removed: For the transition period from _________ to __________ |]

[removed: ][added: ]

Chandler [removed: Blvd., Chandler, AZ 85224-6199][added: Blvd., Chandler, AZ 85224-6199]

[removed: (480) 792-7200][added: (480) 792-7200]

| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | [added: |]

| Common Stock, $0.001 Par Value Per Share | MCHP | [removed: NASDAQ® Global] [added: NASDAQ | Stock] Market [added: LLC] |

[removed: x] [added: ☒] Yes [removed: ¨] [added: ☐] No

[removed: o] [added: ☐] Yes [removed: x] [added: ☒] No

Indicate by [removed: checkmark] [added: check mark] whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[removed: x] [added: ☒] Yes [removed: o] [added: ☐] No

| Large accelerated filer | [removed: x] [added: ☒] | Accelerated filer | [removed: o] [added: ☐] | Non-accelerated filer | [removed: o] [added: ☐] | Smaller reporting company | [removed: o] [added: ☐] |

| | | | | | | Emerging growth company | [removed: o] [added: ☐] |

Aggregate market value of the voting and non-voting common equity held by non-affiliates as of September 30, [removed: 2018] [added: 2019] based upon the closing price of the common stock as reported by the NASDAQ Global Market on such date was approximately [removed: $18,239,644,611.][added: $21,697,205,962.]

Number of shares of Common Stock, $0.001 par value, outstanding as of May [removed: 28, 2019: 237,926,508] [added: 14, 2020: 245,332,497] shares

| Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Stockholders | | III |

| [Item [removed: 1.](#s18CBF892EB4C5E37ADA9C94574805E0D)] [added: 1.](#s9798CB577CBA53318583BC439D07FF10)] | [removed: [Business](#s18CBF892EB4C5E37ADA9C94574805E0D)] [added: [Business](#s9798CB577CBA53318583BC439D07FF10)] | [removed: [3](#s18CBF892EB4C5E37ADA9C94574805E0D)] [added: [3](#s9798CB577CBA53318583BC439D07FF10)] |

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| [Item [removed: 3.](#s85E6134DE34B50EB9779681FF3A09431)] [added: 3.](#sD000D561BCDB5DCEA31BC62596E52BB9)] | [Legal [removed: Proceedings](#s85E6134DE34B50EB9779681FF3A09431)] [added: Proceedings](#sD000D561BCDB5DCEA31BC62596E52BB9)] | [removed: [29](#s85E6134DE34B50EB9779681FF3A09431)] [added: [31](#sD000D561BCDB5DCEA31BC62596E52BB9)] |

| [Item [removed: 4.](#s08FDB7E60B8C5698971A0E79E129CFF4)] [added: 4.](#sD41EDF22C83353409E5907129684DA1F)] | [Mine Safety [removed: Disclosures](#s08FDB7E60B8C5698971A0E79E129CFF4)] [added: Disclosures](#sD41EDF22C83353409E5907129684DA1F)] | [removed: [29](#s08FDB7E60B8C5698971A0E79E129CFF4)] [added: [31](#sD41EDF22C83353409E5907129684DA1F)] |

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| [Item [removed: 11.](#s5CE863601561552F85F0C1AC63DDE781)] [added: 11.](#s36413644734C54CA990A3F93709A4ACF)] | [Executive [removed: Compensation](#s5CE863601561552F85F0C1AC63DDE781)] [added: Compensation](#s36413644734C54CA990A3F93709A4ACF)] | [removed: [58](#s5CE863601561552F85F0C1AC63DDE781)] [added: [56](#s36413644734C54CA990A3F93709A4ACF)] |

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| [Item [removed: 16.](#s3252B137F5335D6891AC543B8A091CDB)] [added: 16.](#s17E60B2E3DC550C5B3EFDAE814B1DC5F)] | [Form 10-K [removed: Summary](#s3252B137F5335D6891AC543B8A091CDB)] [added: Summary](#s17E60B2E3DC550C5B3EFDAE814B1DC5F)] | [removed: [61](#s3252B137F5335D6891AC543B8A091CDB)] [added: [59](#s17E60B2E3DC550C5B3EFDAE814B1DC5F)] |

| | [Power of [removed: Attorney](#s06ED2982D6225141892A29ABEED6C055)] [added: Attorney](#s2AD1F63FCF1D5160A69FDEFB804E5821)] | [removed: [63](#s06ED2982D6225141892A29ABEED6C055)] [added: [65](#s2AD1F63FCF1D5160A69FDEFB804E5821)] |

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

For the fiscal year ended March 31, 2020

For the transition period from _________ to __________

| | | | |

| --- | --- | --- | --- |

| | | | |

| | | (Nasdaq Global Select Market) | |

☒ Yes ☐ No

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☐ Yes ☒ No

| Annual Report on Form 10-K for the fiscal year ended March 31, 2019 | | II |

| | [Exhibit Index](#sEA4325FCBDEA5BE4B46922FD9C3B4974) | [60](#sEA4325FCBDEA5BE4B46922FD9C3B4974) |

| | [Signatures](#sF393A68274CB55B8A1D496D9B20B68EF) | [64](#sF393A68274CB55B8A1D496D9B20B68EF) |

Item 1.

Business

We develop, manufacture and sell specialized semiconductor products used by our customers for a wide variety of embedded control applications.

Our product portfolio comprises general purpose and specialized 8-bit, 16-bit, and 32-bit microcontrollers, 32-bit microprocessors, field-programmable gate array (FPGA) products, a broad spectrum of high-performance linear, mixed-signal, power management, thermal management, discrete diodes and Metal Oxide Semiconductor Field Effect Transistors (MOSFETS), radio frequency (RF), timing, timing systems, safety, security, wired connectivity and wireless connectivity devices, as well as Serial Electrically Erasable Programmable Read Only Memory (EEPROM), Serial Flash memories, Parallel Flash memories, Serial Electrically Erasable Random Access Memory (EERAM) and Serial Static Random Access Memory (SRAM).

We also license Flash-IP solutions that are incorporated in a broad range of products.

Our synergistic product portfolio targets thousands of applications worldwide and a strong demand for high-performance designs in the automotive, aerospace, defense, space, communications, computing, consumer and industrial control markets.

We comply with several quality systems, including: ISO9001 (2015 version), IATF16949 (2016 version), AS9100 (2016 version), and TL9000.

Microchip Technology Incorporated was incorporated in Delaware in 1989.

Our executive offices are located at 2355 West Chandler Boulevard, Chandler, Arizona 85224-6199 and our telephone number is (480) 792-7200.

Our Internet address is *www.microchip.com*.

We post the following filings on our website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission:

| • | our annual report on Form 10-K |

| • | our quarterly reports on Form 10-Q |

| --- | --- |

| • | our current reports on Form 8-K |

| --- | --- |

| • | our proxy statement |

| | |

| --- | --- |

| • | any amendments to the above-listed reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 |

All of our SEC filings on our website are available free of charge.

The information on our website is not incorporated into this Form 10-K.

Acquisition of Microsemi

On May 29, 2018, we completed our acquisition of Microsemi Corporation (Microsemi), a publicly traded company headquartered in Aliso Viejo, California.

We paid an aggregate of approximately $8.19 billion in cash to the stockholders of Microsemi.

The total consideration transferred in the acquisition, including approximately $53.9 million of non-cash consideration for the exchange of certain share-based payment awards of Microsemi for stock awards of Microchip, was approximately $8.24 billion.

In addition to the consideration transferred, we recognized in our consolidated financial statements $3.23 billion in liabilities of Microsemi consisting of debt, taxes payable and deferred, pension obligations, restructuring, and contingent and other liabilities of which $2.06 billion of existing debt was paid off.

We financed the purchase price using approximately $8.10 billion of borrowings consisting of $3.10 billion of loans under our revolving line of credit (the "Revolving Credit Facility"), $3.00 billion of term loans ("Term Loan Facility") provided under our amended and restated Credit Agreement, and $2.00 billion in newly issued senior secured notes.

| | | |

| --- | --- | --- |

| | [Signatures](#s9D91732111C75687886080A038B6AB2E) | [62](#s9D91732111C75687886080A038B6AB2E) |

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

At March 31, [removed: 2019,] [added: 2020,] we owned and used the facilities described below:

| Bangalore, India | | 294,000 | | [removed: Research] [added: Design] and Development; Sales and Marketing Support, and Administrative Offices |

| Chennai, India | | [removed: 91,000] [added: 187,000] | | Design and [removed: Engineering] [added: Development] |

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

Our Chennai, India facility is currently under construction which will add 96,000 square feet of office space.

Our aggregate monthly rental payment for our leased facilities is approximately $4.6 million.

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

| | |

| --- | --- |

| Item 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |

Our common stock is traded on the NASDAQ Global Market under the symbol "MCHP."

*Stock Price Performance Graph*

The following graph and table show a comparison of the five-year cumulative total stockholder return, calculated on a dividend reinvestment basis, for Microchip Technology Incorporated, the Standard & Poor's (S&P) 500 Stock Index, and the Philadelphia Semiconductor Index.

Comparison of 5 year Cumulative Total Return*


*$100 invested on March 31, 2014 in stock or index, including reinvestment of dividends

Fiscal year ending March 31.

Copyright © 2017 S&P, a division of McGraw Hill Financial.

All rights reserved.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Cumulative Total Return | | | | | | | | | | |

| | | March 2014 | | March 2015 | | March 2016 | | March 2017 | | March 2018 | | March 2019 |

| Microchip Technology Incorporated | | 100.00 | | 105.55 | | 107.37 | | 168.33 | | 212.04 | | 195.92 |

| S&P 500 Stock Index | | 100.00 | | 112.73 | | 114.74 | | 134.45 | | 153.26 | | 167.81 |

| Philadelphia Semiconductor Index | | 100.00 | | 120.57 | | 119.69 | | 182.14 | | 243.30 | | 260.60 |

Data acquired by Research Data Group, Inc. (www.researchdatagroup.com)

On May 14, 2019, there were approximately 564 holders of record of our common stock.

This figure does not reflect beneficial ownership of shares held in nominee names.

Refer to "Item 12 - Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters," at page 58 below, for the information required by Item 201(d) of Regulation S-K with respect to securities authorized for issuance under our equity compensation plans at March 31, 2019.

Issuer Purchases of Equity Securities

In May 2015, our Board of Directors authorized the repurchase of up to 20.0 million shares of our common stock in the open market or in privately negotiated transactions.

As of March 31, 2016, we had repurchased 8.6 million shares under this authorization for approximately $363.8 million.

In January 2016, our Board of Directors authorized an increase in the existing share repurchase program to 15.0 million shares of common stock from the approximately 11.4 million shares remaining under the prior authorization.

There were no repurchases of common stock during fiscal 2019.

There is no expiration date associated with this repurchase program.

Our common stock is traded on the NASDAQ Global Market under the symbol "MCHP."

*Stock Price Performance Graph*

The following graph and table show a comparison of the five-year cumulative total stockholder return, calculated on a dividend reinvestment basis, for Microchip Technology Incorporated, the Standard & Poor's (S&P) 500 Stock Index, and the Philadelphia Semiconductor Index.

Comparison of 5 year Cumulative Total Return*


*$100 invested on March 31, 2015 in stock or index, including reinvestment of dividends

Fiscal year ending March 31.

Copyright © 2020 Standard & Poor's, a division of S&P Global.

All rights reserved.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | |

| | | Cumulative Total Return | | | | | | | | | | |

| | | March 2015 | | March 2016 | | March 2017 | | March 2018 | | March 2019 | | March 2020 |

| Microchip Technology Incorporated | | 100.00 | | 101.73 | | 159.48 | | 200.89 | | 185.62 | | 154.16 |

| S&P 500 Stock Index | | 100.00 | | 101.78 | | 119.26 | | 135.95 | | 148.86 | | 138.47 |

| Philadelphia Semiconductor Index | | 100.00 | | 99.27 | | 151.06 | | 201.80 | | 216.14 | | 238.58 |

Data acquired by Research Data Group, Inc. (www.researchdatagroup.com)

On May 14, 2020, there were approximately 568 holders of record of our common stock.

This figure does not reflect beneficial ownership of shares held in nominee names.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

For a description of our dividend policies, see Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources," included herein.

Refer to "Item 12 - Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters," at page 56 below, for the information required by Item 201(d) of Regulation S-K with respect to securities authorized for issuance under our equity compensation plans at March 31, 2020.

Issuer Purchases of Equity Securities

From time to time, our Board of Directors has authorized the repurchase of shares of our common stock in the open market or in privately negotiated transactions.

Most recently, in January 2016, our Board of Directors authorized an increase in the then existing share repurchase program to 15.0 million shares of common stock.

There were no repurchases of common stock during fiscal 2020.

There is no expiration date associated with this repurchase program.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

You should read the following selected consolidated financial data for the five-year period ended March 31, [removed: 2019] [added: 2020] in conjunction with our consolidated financial statements and notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Items 7 and 8 of this Form 10-K.

Our consolidated statements of income data for each of the years in the three-year period ended March 31, [removed: 2019,] [added: 2020,] and the balance sheet data as of March 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] are derived from our audited consolidated financial statements, included in Item 8 of this Form 10-K.

The statement of income data for the years ended March 31, [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] and balance sheet data as of March 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] have been derived from our audited consolidated financial statements not included herein (in the tables below all amounts are in millions, except per share data).

| | [removed: |] Year ended March 31, | | | | | | | | | | | | | | | | | | |

| | [removed: | 2019 (1)] [added: 2020] | | | | [removed: 2018] [added: 2019(1)] | | | | [removed: 2017 (1)] [added: 2018] | | | | [removed: 2016] [added: 2017(1)] | | | | [removed: 2015] [added: 2016] | | |

| Consolidated Statements of Income data: | | | | | | | | | | | | | | | | | | | | [removed: |]

| Net sales | [removed: |] $ | [removed: 5,349.5] [added: 5,274.2] | | | $ | [removed: 3,980.8] [added: 5,349.5] | | | $ | [removed: 3,407.8] [added: 3,980.8] | | | $ | [removed: 2,173.3] [added: 3,407.8] | | | $ | [removed: 2,147.0] [added: 2,173.3] | |

| Special charges and other, net (2) | [removed: |] $ | [removed: 33.7] [added: 46.7] | | | $ | [removed: 17.5] [added: 33.7] | | | $ | [removed: 98.6] [added: 17.5] | | | $ | [removed: 4.0] [added: 98.6] | | | $ | [removed: 2.8] [added: 4.0] | |

| Loss on settlement of debt (3) | [removed: |] $ | [removed: (12.6] [added: (5.4] | ) | | $ | [removed: (16.0] [added: (12.6] | ) | | $ | [removed: (43.9] [added: (16.0] | ) | | $ | [removed: —] [added: (43.9] | [added: )] | | $ | [removed: (50.6] [added: —] | [removed: )] |

| Net income from continuing operations | [removed: |] $ | [removed: 355.9] [added: 570.6] | | | $ | [removed: 255.4] [added: 355.9] | | | $ | [removed: 170.6] [added: 255.4] | | | $ | [removed: 323.9] [added: 170.6] | | | $ | [removed: 365.3] [added: 323.9] | |

| Basic net income per common share from continuing operations | [removed: |] $ | [removed: 1.51] [added: 2.39] | | | $ | [removed: 1.10] [added: 1.51] | | | $ | [removed: 0.79] [added: 1.10] | | | $ | [removed: 1.59] [added: 0.79] | | | $ | [removed: 1.84] [added: 1.59] | |

| Diluted net income per common share from continuing operations | [removed: |] $ | [removed: 1.42] [added: 2.23] | | | $ | [removed: 1.03] [added: 1.42] | | | $ | [removed: 0.73] [added: 1.03] | | | $ | [removed: 1.49] [added: 0.73] | | | $ | [removed: 1.65] [added: 1.49] | |

| Dividends declared per common share | [removed: |] $ | [removed: 1.457] [added: 1.465] | | | $ | [removed: 1.449] [added: 1.457] | | | $ | [removed: 1.441] [added: 1.449] | | | $ | [removed: 1.433] [added: 1.441] | | | $ | [removed: 1.425] [added: 1.433] | |

| Consolidated Balance Sheets data: | | | | | | | | | | | | | | | | | | | | [removed: |]

| Total assets | [removed: |] $ | [removed: 18,350.0] [added: 17,426.1] | | | $ | [removed: 8,257.2] [added: 18,350.0] | | | $ | [removed: 7,686.9] [added: 8,257.2] | | | $ | [removed: 5,537.9] [added: 7,686.9] | | | $ | [removed: 4,780.7] [added: 5,537.9] | |

| Net long-term debt and capital lease obligations, less current maturities (3) | [removed: |] $ | [removed: 8,956.0] [added: 8,882.1] | | | $ | [removed: 1,769.1] [added: 8,956.0] | | | $ | [removed: 2,912.1] [added: 1,769.1] | | | $ | [removed: 2,465.8] [added: 2,912.1] | | | $ | [removed: 1,840.0] [added: 2,465.8] | |

| [removed: Microchip Technology stockholders'] [added: Stockholders'] equity | [removed: |] $ | [removed: 5,287.5] [added: 5,585.5] | | | $ | [removed: 3,279.8] [added: 5,287.5] | | | $ | [removed: 3,270.7] [added: 3,279.8] | | | $ | [removed: 2,150.9] [added: 3,270.7] | | | $ | [removed: 2,044.7] [added: 2,150.9] | |

(2) Refer to Note [removed: 4] [added: 5] to our consolidated financial statements for a discussion of the special charges and other, net.

(3) Refer to Note [removed: 12 Debt and Credit Facility] [added: 7, Debt,] for further discussion.

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

| (1) | Refer to Note 2 to our consolidated financial statements for a discussion of our acquisition of Microsemi during fiscal 2019. During fiscal 2017, we completed our acquisition of Atmel. |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | |

| --- | --- |

| (1) | Refer to Note 2 to our consolidated financial statements for an explanation of our material business combinations during fiscal 2019 and fiscal 2017. |

| Item 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |

Note Regarding Forward-looking Statements

This report, including "Item 1 – Business," "Item 1A – Risk Factors," and "Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations," 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 12 and elsewhere in this Form 10-K.

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 June 2019 days of inventory levels will be down 8 days to up 11 days compared to the March 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 deferred cost of sales are recorded at their approximate carrying value and will have low risk of material impairment; |

| • | 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 and interface 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 our existing facilities will provide sufficient capacity to respond to increases in demand with modest incremental capital expenditures; |

| • | 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; |

None.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that [removed: because of the material weaknesses in internal control over financial reporting described below,] our disclosure controls and procedures were [removed: not] effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

[removed: Our disclosure controls and] procedures include components of our internal control over financial reporting.

Our management, including our principal executive officer and [added: our] principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted [added: accounting principles.]

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

Management assessed our internal control over financial reporting as of March 31, [removed: 2019,] [added: 2020,] the end of our fiscal year.

Based on our [removed: assessment and the existence of a material weakness related to accounting for income taxes and the existence of a material weakness related to IT system access,] [added: assessment,] management has concluded that our internal control over financial reporting was [removed: not] effective as of the end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Ernst & Young LLP, an independent registered public accounting firm, who audited our consolidated financial statements included in this Form 10-K has issued an attestation report on our internal control over financial reporting as of March 31, [removed: 2019,] [added: 2020,] which is included on page [removed: F-2.][added: F-5.]

During the three months ended March 31, [removed: 2019,] [added: 2020,] we transitioned certain of Microsemi's processes to our internal control processes and we expect to transition more of such processes throughout the remainder of calendar year [removed: 2019.][added: 2020.]

[removed: However, other] [added: Other] than with respect to [added: the remediation efforts and] our transition of Microsemi to our systems and control environment as [removed: describe] [added: described] above, during the three months ended March 31, [removed: 2019,] [added: 2020,] there was no change in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our disclosure controls and

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2019, we identified a material weakness in our internal controls related to accounting for income taxes and we also identified a material weakness in our internal controls related to IT system access.

Both of these material weaknesses were remediated as of March 31, 2020.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

Material Weaknesses in Internal Control Over Financial Reporting

A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

In reviewing the accounting for certain transactions completed in fiscal 2019 as part of the realignment of our legal structure and other significant transactions, our management identified deficiencies in the operating effectiveness of controls intended to properly document and review relevant facts used to determine and apply the appropriate tax accounting under accounting standards generally accepted in the United States.

Additionally, our controls did not operate to validate the completeness and accuracy of information used in the execution of certain key tax controls.

These control deficiencies impacted the deferred tax, long-term income tax payable, and income tax benefit accounts and related disclosures and resulted in adjustments to our annual financial statements as of and for the year ended March 31, 2019.

The errors arising from the underlying deficiencies are not material to the financial statements reported in any interim or annual period and therefore, did not result in a revision to previously filed financial statements.

However, the control deficiencies could result in a failure to timely prevent or detect misstatements of the aforementioned accounts and disclosures that could be material to the annual or interim consolidated financial statements.

Accordingly, our management has concluded that the deficiencies, in the aggregate, constitute a material weakness in our internal control over financial reporting.

In the fourth quarter of fiscal 2019, we also identified deficiencies in the design of our internal control over financial reporting as our management determined that there were not sufficient controls to prevent, detect and respond to unauthorized access to our IT systems in a timely manner.

Network authentication, segmentation and monitoring were in place, but were not sufficiently designed to address changes in the current risk environment.

Our management has concluded that these deficiencies, in the aggregate, constitute a material weakness in our internal control over financial reporting

accounting principles.

In accordance with guidance issued by the Securities and Exchange Commission, registrants are permitted to exclude material business combinations from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred.

Our management’s evaluation of internal control over financial reporting excluded the internal control activities of Microsemi, which we acquired on May 29, 2018 as discussed in Note 2 of the consolidated financial statements.

We have included the financial results of Microsemi in our consolidated financial statements from the date of acquisition.

Total revenues excluded from our assessment of internal control over financial reporting represented approximately 28% of our consolidated revenues for the fiscal year ended March 31, 2019.

Total Microsemi assets excluded from our assessment of internal control over financial reporting represented approximately 4% of our consolidated total assets as of March 31, 2019.

Remediation Plans and Other Information

Our management has begun implementing a remediation plan to address the control deficiencies that led to the material weakness related to accounting for income taxes as described above.

The remediation plan includes:

| | |

| --- | --- |

| • | strengthening our income tax control with improved documentation standards, technical oversight and training; and |

| • | hiring additional qualified accounting and/or tax professionals. |

With respect to the foregoing material weakness, we currently plan to have our enhanced review procedures and documentation standards in place in the first quarter of fiscal 2020.

Our goal is to remediate this material weakness by the end of fiscal 2020, subject to there being sufficient opportunities to conclude, through testing, that the enhanced control is operating effectively.

Our management has also begun implementing a remediation plan to address the control deficiencies that led to the material weakness related to IT system access as described above.

| • | hiring additional qualified information services professionals; |

| • | strengthening technical access controls by implementing additional multi-factor authentication mechanisms; |

| • | redesigning and implementing network structure to contain and isolate relevant systems; and |

| • | implementing additional controls related to on-going incident response and monitoring. |

With respect to the foregoing material weakness related to IT system access, we currently plan to have implemented additional multi-factor authentication and implemented additional controls in the first quarter of fiscal 2020.

Our goal is to remediate this material weakness by the end of fiscal 2020, subject to there being sufficient opportunities to conclude, through testing, that the enhanced controls are operating effectively.

On May 29, 2018, we completed our acquisition of Microsemi which operated under its own set of systems and internal controls.

In connection with the identified material weaknesses related to accounting for income taxes and to IT system access, we have taken steps to remediate the material weaknesses as described above.

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

Information on the members of our Board of Directors is incorporated herein by reference to our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders under the captions "The Board of Directors," and "Proposal One – Election of Directors."

Information on the composition of our audit committee and the members of our audit committee, including information on our audit committee financial experts, is incorporated by reference to our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders under the caption "The Board of Directors – Committees of the Board of Directors – Audit Committee."

Information on our executive officers is provided in Item 1, Part I of this Form 10-K under the caption "Executive Officers of the Registrant" at page [removed: 10,] [added: 11,] above.

Information with respect to our code of ethics that applies to our directors, executive officers (including our principal executive officer and our principal financial and accounting officer) and employees is incorporated by reference to our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders under the caption "Code of Business Conduct and Ethics." A copy of our Code of Business Conduct and Ethics is available on our website at the Investor Relations section under Mission Statement/Corporate Governance on www.microchip.com.

Information regarding material changes, if any, to procedures by which security holders may recommend nominees to our Board of Directors is incorporated by reference to our proxy statement for the [removed: 2019] [added: 2020] annual meeting of stockholders under the caption "Requirements, Including Deadlines, for Receipt of Stockholder Proposals for the [removed: 2019] [added: 2020] Annual Meeting of Stockholders; Discretionary Authority to Vote on Stockholder Proposals."

Information with respect to compliance with Section 16(a) of the Exchange Act, is incorporated herein by reference to our proxy statement for our 2019 annual meeting of stockholders under the caption "Delinquent Section 16(a) Reports."

Information with respect to executive compensation is incorporated herein by reference to the information under the caption "Executive Compensation" in our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders.

Information with respect to director compensation is incorporated herein by reference to the information under the caption "The Board of Directors – Director Compensation" in our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders.

Information with respect to compensation committee interlocks and insider participation in compensation decisions is incorporated herein by reference to the information under the caption "The Board of Directors – Compensation Committee Interlocks and Insider Participation" in our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders.

Our Board compensation committee report on executive compensation is incorporated herein by reference to the information under the caption "Executive Compensation – Compensation Committee Report on Executive Compensation" in our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders.

| | |

| --- | --- |

| Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |

Information with respect to securities authorized for issuance under our equity compensation plans is incorporated herein by reference to the information under the caption "Executive Compensation – Equity Compensation Plan Information" in our proxy statement for our 2019 annual meeting of stockholders.

Information with respect to security ownership of certain beneficial owners, members of our Board of Directors and management is incorporated herein by reference to the information under the caption "Security Ownership of Principal Stockholders, Directors and Executive Officers" in our proxy statement for our 2019 annual meeting of stockholders.

[Table of Contents](#s9C6CB149155E50BA880434F63B790EC2)

Information with respect to securities authorized for issuance under our equity compensation plans is incorporated herein by reference to the information under the caption "Executive Compensation – Equity Compensation Plan Information" in our proxy statement for our 2020 annual meeting of stockholders.

Information with respect to security ownership of certain beneficial owners, members of our Board of Directors and management is incorporated herein by reference to the information under the caption "Security Ownership of Principal Stockholders, Directors and Executive Officers" in our proxy statement for our 2020 annual meeting of stockholders.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

The information required by this Item pursuant to Item 404 of Regulation S-K is incorporated by reference to the information under the caption "Certain Transactions" contained in our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders.

The information required by this Item pursuant to Item 407(a) of Regulation S-K regarding the independence of our directors is incorporated by reference to the information under the caption "Meetings of the Board of Directors" contained in our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders.

The information required by this Item related to principal accountant fees and services as well as related pre-approval policies is incorporated by reference to the information under the caption "Independent Registered Public Accounting Firm" contained in our proxy statement for our [removed: 2019] [added: 2020] annual meeting of stockholders.

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

| | Report of Independent Registered Public Accounting Firm | [removed: F-1] [added: [F-1](#s1F25F2AC0C615D6CAE538B4AA01B191A)] |

| | Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting | [removed: F-2] [added: [F-5](#s0641F30580005F40B41E3FFF09BEF768)] |

| | Consolidated Balance Sheets as of March 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] | [removed: F-3] [added: [F-6](#sD0FEEB05A824525BA1BFEED2F3D871EF)] |

| | Consolidated Statements of Income for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: F-4] [added: [F-7](#sBC10F8C64B375A95A705919505D5E9CB)] |

| | Consolidated Statements of Comprehensive Income for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: F-5] [added: [F-8](#s8D4CA693EA745EAFBBA584A6728827A5)] |

| | Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: F-6] [added: [F-9](#s29B8C4499A5D58C6B5FCE86BD9FBD95D)] |

| | Consolidated Statements of Changes in Equity for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: F-8] [added: [F-11](#sABB11F9F21B4525BB3E8DACD71C3AA43)] |

| | Notes to Consolidated Financial Statements | [removed: F-10] [added: [F-13](#s99985CAF43EE5D8A920AF922D1DB93DF)] |

| (3) | The Exhibits filed with this Form 10-K or incorporated herein by reference are set forth in the Exhibit Index beginning on page [removed: 64] [added: 60] hereof, which Exhibit Index is incorporated herein by this reference. | |

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

| May [removed: 30, 2019] [added: 21, 2020] | By: /s/ Steve Sanghi |

IN WITNESS WHEREOF, each of the undersigned has executed the foregoing power of attorney on this [removed: 30th] [added: 21st] day of May, [removed: 2019.][added: 2020.]

| /s/ Steve Sanghi | | | Chief Executive Officer and Chairman of the Board | | May [removed: 30, 2019] [added: 21, 2020] |

| /s/ Matthew W. Chapman | | | Director | | May [removed: 30, 2019] [added: 21, 2020] |

| /s/ L.B. Day | | | Director | | May [removed: 30, 2019] [added: 21, 2020] |

| /s/ Esther L. Johnson | | | Director | | May [removed: 30, 2019] [added: 21, 2020] |

| /s/ Wade F. Meyercord | | | Director | | May [removed: 30, 2019] [added: 21, 2020] |

| /s/ J. Eric Bjornholt | | | Senior Vice President and Chief Financial Officer | | May [removed: 30, 2019] [added: 21, 2020] |

| [removed: 10.5] [added: 10.7] | | [Pledge and Security Agreement, dated as of February 8, 2017, by and among Microchip Technology Incorporated, the other grantors party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent](http://www.sec.gov/Archives/edgar/data/827054/000119312517034626/d346970dex102.htm) | | 8-K | | 000-21184 | | 10.2 | | 2/8/2017 | | |

| [removed: 10.6] [added: 10.11] | | [Commitment Letter dated March 1, 2018, between Microchip Technology Incorporation and JPMorgan Chase Bank, N.A.](http://www.sec.gov/Archives/edgar/data/827054/000119312518068156/d517266dex101.htm) | | 8-K | | 000-21184 | | 10.1 | | 3/2/2018 | | |

| [removed: 10.7] [added: 10.12] | | Form of Indemnification Agreement between Registrant and its directors and certain of its officers \[Paper filing not on SEC website.\] | | S-1 | | 33-57960 | | 10.1 | | 2/5/1993 | | |

| [removed: 10.8] [added: 10.13] | | [Microchip Technology Incorporated 2012 Inducement Award Plan](http://www.sec.gov/Archives/edgar/data/827054/000082705412000225/exhibit48.htm) | | S-8 | | 333-183074 | | 4.8 | | 8/3/2012 | | |

| [removed: 10.9*] [added: 10.14*] | | [2004 Equity Incentive Plan as amended and restated on May 21, 2019](http://www.sec.gov/Archives/edgar/data/827054/000082705419000139/ex1012004equityincentivepl.htm) | | 8-K | | 000-21184 | | 10.1 | | 5/24/2019 | | |

| [removed: 10.10*] [added: 10.16*] | | [Form of Notice of Grant of Restricted Stock Units (officer) for 2004 Equity Incentive Plan](http://www.sec.gov/Archives/edgar/data/827054/000082705413000327/exhibit10211-12x2013.htm) | | S-8 | | 333-192273 | | 10.2 | | 11/12/2013 | | |

| [removed: 10.11] [added: 10.17*] | | [Form of Notice of Grant of Restricted Stock Units (non-officer) for 2004 Equity Incentive Plan](http://www.sec.gov/Archives/edgar/data/827054/000082705413000327/exhibit10311-12x2013.htm) | | S-8 | | 333-192273 | | 10.3 | | 11/12/2013 | | |

| [removed: 10.12*] [added: 10.18*] | | [Form of Notice of Grant for 2004 Equity Incentive Plan (including Exhibit A Stock Option Agreement)](http://www.sec.gov/Archives/edgar/data/827054/000104746904032009/a2145061zex-4_5.htm) | | S-8 | | 333-119939 | | 4.5 | | 10/25/2004 | | |

| [removed: 10.13*] [added: 10.19*] | | [Form of Notice of Grant of Restricted Stock Units for 2004 Equity Incentive Plan (including Exhibit A Restricted Stock Units Agreement)](http://www.sec.gov/Archives/edgar/data/827054/000110465906038580/a06-12509_1ex10d6.htm) | | 10-K | | 000-21184 | | 10.6 | | 5/31/2006 | | |

| [removed: 10.14*] [added: 10.20*] | | [Restricted Stock Units Agreement (Domestic) for 2004 Equity Incentive Plan](http://www.sec.gov/Archives/edgar/data/827054/000082705407000175/ex10_3.htm) | | 10-Q | | 000-21184 | | 10.3 | | 11/7/2007 | | |

| [removed: 10.15] [added: 10.21*] | | [Restricted Stock Units Agreement (Foreign) for 2004 Equity Incentive Plan](http://www.sec.gov/Archives/edgar/data/827054/000082705407000175/ex10_4.htm) | | 10-Q | | 000-21184 | | 10.4 | | 11/7/2007 | | |

| [removed: 10.16*] [added: 10.22*] | | [Form of Global RSU Agreement for 2004 Equity Incentive Plan (including Notice of Grant of Restricted Stock Units)](http://www.sec.gov/Archives/edgar/data/827054/000082705410000248/ex10_1.htm) | | 8-K | | 000-21184 | | 10.1 | | 9/27/2010 | | |

| [removed: 10.17] [added: 10.23*] | | [Form of RSU Grant Notice and Global RSU Agreement [removed: V-4004](https://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1017grantnoticeandgl.htm)] [added: V-4004](http://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1017grantnoticeandgl.htm)] | | [added: 10-K] | | [added: 000-21184] | | [added: 10.17] | | [added: 5/30/2019] | | [removed: X] |

| [removed: 10.18*] [added: 10.24*] | | [Form of Notice of Stock Option Grant and Stock Option [removed: Agreement](https://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1018noticeofstockopt.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1018noticeofstockopt.htm)] | | [added: 10-K] | | [added: 000-21184] | | [added: 10.18] | | [added: 5/30/2019] | | [removed: X] |

| [removed: 10.19*] [added: 10.25*] | | [Form of CEO RSU Grant and RSU [removed: Agreement](https://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1019ceograntandrsuagt.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1019ceograntandrsuagt.htm)] | | [added: 10-K] | | [added: 000-21184] | | [added: 10.19] | | [added: 5/30/2019] | | [removed: X] |

| [removed: 10.20*] [added: 10.26*] | | [Form of [removed: S16 RSU] [added: Notice of] Grant [removed: and] [added: of] RSU [removed: Agreement](https://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1020s16grantandrsuagt.htm)] [added: Agreement](http://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1020s16grantandrsuagt.htm)] | | [added: 10-K] | | [added: 000-21184] | | [added: 10.20] | | [added: 5/30/2019] | | [removed: X] |

| [removed: 10.21*] [added: 10.28*] | | [Microchip Technology Incorporated 2001 Employee Stock Purchase Plan as amended through February 19, [removed: 2019](https://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex10212001esppamended2.htm)] [added: 2019](http://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex10212001esppamended2.htm)] | | [added: 10-K] | | [added: 000-21184] | | [added: 10.21] | | [added: 5/30/2019] | | [removed: X] |

| [removed: 10.22] [added: 10.29*] | | [Microchip Technology Incorporated International Employee Stock Purchase Plan as amended May [removed: 69, 2019](https://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1022iesppupdated5619.htm)] [added: 6, 2019](http://www.sec.gov/Archives/edgar/data/827054/000082705419000143/ex1022iesppupdated5619.htm)] | | [added: 10-K] | | [added: 000-21184] | | [added: 10.22] | | [added: 5/30/2019] | | [removed: X] |

| [removed: 10.23*] [added: 10.30*] | | [Executive Management Incentive Compensation Plan as amended on May 16, 2016](http://www.sec.gov/Archives/edgar/data/827054/000082705416000429/ex101emicp.htm) | | 8-K | | 000-21184 | | 10.1 | | 8/18/2016 | | |

| [removed: 10.24*] [added: 10.31*] | | [Discretionary Executive Management Incentive Compensation Plan](http://www.sec.gov/Archives/edgar/data/827054/000082705406000108/ex10_3.htm) | | 8-K | | 000-21184 | | 10.3 | | 8/24/2006 | | |

| [removed: 10.25] [added: 10.32*] | | [Management Incentive Compensation Plan as amended by the Board of Directors on May 17, 2013](http://www.sec.gov/Archives/edgar/data/827054/000082705413000171/a03-31x2013ex1021.htm) | | 10-K | | 000-21184 | | 10.21 | | 5/30/2013 | | |

| [removed: 10.26*] [added: 10.33*] | | [Microchip Technology Incorporated Supplemental Retirement Plan](http://www.sec.gov/Archives/edgar/data/827054/000095014702001573/ex4-1_1.txt) | | S-8 | | 333-101696 | | 4.1.1 | | 12/6/2002 | | |

| [removed: 10.27*] [added: 10.34*] | | [Adoption Agreement to the Microchip Technology Incorporated Supplemental Retirement Plan dated January 1, 1997](http://www.sec.gov/Archives/edgar/data/827054/000095014702001573/ex4-1_3.txt) | | S-8 | | 333-101696 | | 4.1.3 | | 12/6/2002 | | |

| [removed: 10.28*] [added: 10.35*] | | [Amendment dated December 9, 1999 to the Adoption Agreement to the Microchip Technology Incorporated Supplemental Retirement Plan](http://www.sec.gov/Archives/edgar/data/827054/000095014702001573/ex4-1_4.txt) | | S-8 | | 333-101696 | | 4.1.4 | | 12/6/2002 | | |

| [removed: 10.29*] [added: 10.36*] | | [February 3, 2003 Amendment to the Adoption Agreement to the Microchip Technology Incorporated Supplemental Retirement Plan](http://www.sec.gov/Archives/edgar/data/827054/000095014703000708/ex10-28.txt) | | 10-K | | 000-21184 | | 10.28 | | 6/5/2003 | | |

| [removed: 10.30*] [added: 10.37*] | | [Amendments to Supplemental Retirement Plan](http://www.sec.gov/Archives/edgar/data/827054/000110465906007461/a06-4622_1ex10d1.htm) | | 10-Q | | 000-21184 | | 10.1 | | 2/9/2006 | | |

| [removed: 10.31*] [added: 10.38*] | | [Amended and Restated Adoption Agreement to the Microchip Technology Incorporated Supplemental Retirement Plan dated October 8, 2008, as amended December 15, 2008](http://www.sec.gov/Archives/edgar/data/827054/000082705416000344/ex1028.htm) | | 10-K | | 000-21184 | | 10.28 | | 5/24/2016 | | |

| [removed: 10.32*] [added: 10.39*] | | [Change of Control Severance Agreement](http://www.sec.gov/Archives/edgar/data/827054/000082705408000248/ex10_1.htm) | | 8-K | | 000-21184 | | 10.1 | | 12/18/2008 | | |

| [removed: 10.33*] [added: 10.40*] | | [Change of Control Severance Agreement](http://www.sec.gov/Archives/edgar/data/827054/000082705408000248/ex10_2.htm) | | 8-K | | 000-21184 | | 10.2 | | 12/18/2008 | | |

| [removed: 10.34] [added: 10.41] | | [Development Agreement dated as of August 29, 1997 by and between Registrant and the City of Chandler, Arizona](http://www.sec.gov/Archives/edgar/data/827054/0000950147-98-000110.txt) | | 10-Q | | 000-21184 | | 10.1 | | 2/13/1998 | | |

| [removed: 10.35] [added: 10.42] | | [Addendum to Development Agreement by and between Registrant and the City of Tempe, Arizona, dated May 11, 2000](http://www.sec.gov/Archives/edgar/data/827054/000095014701500896/ex10-14.txt) | | 10-K | | 000-21184 | | 10.14 | | 5/15/2001 | | |

EXHIBIT INDEX

| 4.4 | | [Description of Registered Securities](https://www.sec.gov/Archives/edgar/data/827054/000082705420000119/ex44q4fy20.htm) | | | | | | | | | | X |

| 10.5 | | [Amendment No.1 to Amended and Restated Credit Agreement, dated as of September 26, 2019, among Microchip Technology Incorporated, the Subsidiary Guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.](http://www.sec.gov/Archives/edgar/data/827054/000082705419000266/exhibit101-093019.htm) | | 8-K | | 000-21184 | | 10.1 | | 10/1/2019 | | |

| 10.6 | | [Second Amendment to Amended and Restated Credit Agreement, dated as of March 21, 2020.](http://www.sec.gov/Archives/edgar/data/827054/000119312520083097/d901097dex101.htm) | | 8-K | | 000-21184 | | 10.1 | | 3/24/2020 | | |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

EXHIBIT INDEX

| 10.8 | | [Pledge and Security Agreement, dated as of March 27, 2020, by and among Microchip Technology Incorporated, the other grantors from time to time party thereto and JPMorgan chase Bank, N.A., as administrative agent.](http://www.sec.gov/Archives/edgar/data/827054/000119312520088655/d905730dex102.htm) | | 8-K | | 000-21184 | | 10.2 | | 3/27/2020 | | |

| 10.9 | | [364-Day Senior Secured Bridge Credit Agreement, dated as of March 27, 2020, by and among Microchip Technology Incorporated, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent.](http://www.sec.gov/Archives/edgar/data/827054/000119312520088655/d905730dex101.htm) | | 8-K | | 000-21184 | | 10.1 | | 3/27/2020 | | |

| 10.10 | | [Guaranty, dated as of March 27, 2020, by the subsidiaries of Microchip Technology Incorporated party thereto as guarantors in favor of JPMorgan Chase Bank, N.A., as administrative agent](http://www.sec.gov/Archives/edgar/data/827054/000119312520088655/d905730dex103.htm) | | 8-K | | 000-21184 | | 10.3 | | 3/27/2020 | | |

| 10.15* | | [2004 Equity Incentive Plan as Amended and Restated November 12, 2019](http://www.sec.gov/Archives/edgar/data/827054/000082705420000029/ex101201911122004equit.htm) | | 10-Q | | 000-21184 | | 10.1 | | 2/4/2020 | | |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

EXHIBIT INDEX

| 10.27* | | [Notice of Grant of Restricted Stock Units (TSR)](http://www.sec.gov/Archives/edgar/data/827054/000082705420000019/exhibit101.htm) | | 8-K | | 000-21184 | | 10.1 | | 1/7/2020 | | |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

EXHIBIT INDEX

| 104 | | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | | | | | | | | | | X |

| | | Furnished herewith | | | | | | | | | | |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

EXHIBIT LIST

| 2.1 | | [Agreement and Plan of Merger, dated as of January 19, 2016, by and among Microchip Technology, Atmel Corporation, and Hero Acquisition Corporation](http://www.sec.gov/Archives/edgar/data/827054/000119312516432650/d117661dex21.htm) | | 8-K | | 000-21184 | | 2.1 | | 1/19/2016 | | |

| | | Furnished herewith. | | | | | | | | | | |

YEAR ENDED MARCH 31, [removed: 2019][added: 2020]

[Table of [removed: Contents](#s9C6CB149155E50BA880434F63B790EC2)][added: Contents](#s501CD12FEE3D5169A03054EEC3946C34)]

[removed: MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES][added: To the Shareholders and the Board of Directors of Microchip Technology Incorporated]

[removed: | Report] [added: Report] of Independent Registered Public Accounting [removed: Firm | [F-1](#s1E79DB75E3D956CBAD141377B6F5B42F) |][added: Firm]

| Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting | [removed: [F-2](#s2922DD5685E958C48EC5AF5A4F5BF48C)] [added: [F-5](#s0641F30580005F40B41E3FFF09BEF768)] |

| Consolidated Balance Sheets as of March 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] | [removed: [F-4](#s850C3BCB197F5242A0DAC40DDF3BD7F8)] [added: [F-6](#sD0FEEB05A824525BA1BFEED2F3D871EF)] |

| Consolidated Statements of Income for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: [F-5](#s74F0245EA6315F3FA0396170B3054CFA)] [added: [F-7](#sBC10F8C64B375A95A705919505D5E9CB)] |

| Consolidated Statements of Comprehensive Income for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: [F-6](#s617A6A06675D530DA82581EE4E2581AA)] [added: [F-8](#s8D4CA693EA745EAFBBA584A6728827A5)] |

| Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: [F-7](#s4552AF3634AC5D0B92F6331BEE5F4741)] [added: [F-9](#s29B8C4499A5D58C6B5FCE86BD9FBD95D)] |

| Consolidated Statements of Changes in Equity for each of the three years in the period ended March 31, [removed: 2019] [added: 2020] | [removed: [F-9](#s2B5DD821D0C8544C89CF885C51F6AFDF)] [added: [F-11](#sABB11F9F21B4525BB3E8DACD71C3AA43)] |

| Notes to Consolidated Financial Statements | [removed: [F-11](#s2C8FB3CBF434506B84F08969C91A4AFF)] [added: [F-13](#s99985CAF43EE5D8A920AF922D1DB93DF)] |

We have audited the accompanying consolidated balance sheets of Microchip Technology Incorporated (the Company) as of March 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended March 31, [removed: 2019,] [added: 2020,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended March 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated May [removed: 30, 2019] [added: 21, 2020] expressed an [removed: adverse] [added: unqualified] opinion thereon.

[removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING][added: | Report of Independent Registered Public Accounting Firm | [F-1](#s1F25F2AC0C615D6CAE538B4AA01B191A) |]

We have audited Microchip Technology [removed: Incorporated's] [added: Incorporated’s] internal control over financial reporting as of March 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, [removed: because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria] Microchip Technology Incorporated (the Company) [removed: has not maintained] [added: maintained, in all material respects,] effective internal control over financial reporting as of March 31, [removed: 2019,] [added: 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended March 31, [removed: 2019,] [added: 2020,] and the related [removed: notes.][added: notes and our report dated May 21, 2020 expressed an unqualified opinion thereon.]

[removed: | Inventory valuation | 45.0 | | | | 10.7 | | |][added: Inventory Valuation]

[removed: |] [added: May 21,] 2020 [removed: | | $ | — | |]

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

| | | |

| --- | --- | --- |

| | | |

| *Description of the Matter* | | The Company's inventories totaled $685.7 million as of March 31, 2020. As explained in Note 1 to the consolidated financial statements, the Company assesses the valuation of inventory each reporting period based on the lower of cost or net realizable value. The Company primarily reserves for obsolete and unmarketable inventory based on inventory on hand in excess of 12-month forecast demand. Estimated 12-month forecast demand is generally determined based on annualized sales using the prior three-month period. The Company uses the most recently developed sales forecast to refine the estimated demand to adjust for circumstances in which historical sales are not expected to be representative of future demand including new products with little or no historical demand, products being replaced or discontinued for which demand is expected to decrease, or other customer specific or economic factors. Auditing management's estimates for obsolete or unmarketable inventory involved subjective auditor judgment because the assumptions used to make the estimate require judgments about future market and economic conditions outside the Company's control. In particular, the adjustments to the obsolete or unmarketable inventory estimates are sensitive to significant assumptions impacting forecast demand, including changes in economic and market conditions such as the impacts of COVID-19. |

| *How We Addressed the Matter in Our Audit* | | We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's obsolete or unmarketable inventory estimation process, including management's assessment of the assumptions and data underlying the obsolete or unmarketable inventory reserves. Our substantive audit procedures included, among others, evaluating the significant assumptions stated above and the accuracy and completeness of the underlying data used in management's obsolete or unmarketable inventory assessment. We compared on-hand inventories to demand forecasts, assessed the reasonableness of management’s demand forecasts through testing historical sales quantities, and evaluated adjustments to demand forecasts for specific product considerations, such as specific customer demand. We also assessed the historical accuracy of management's estimates and the related assumptions by performing a retrospective review on the accuracy of prior period demand forecast estimates. |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

Estimating Variable Consideration for Distributor Sales

| | | |

| --- | --- | --- |

| | | |

| *Description of the Matter* | | The Company's sales arrangements provide certain distributors with price concessions and product return rights, which results in variable consideration. During the year ended March 31, 2020, approximately $2,626.9 million of the Company's total $5,274.2 million in net sales represents sales to distributors, which has been adjusted for estimates of the price concessions and product return rights that are expected to be claimed. As explained in Note 1 to the consolidated financial statements, the Company estimates the amount of consideration to which it will be entitled using recent historical data and applying the expected value method. The Company records a reduction of the original sale amount for the estimated variable consideration resulting from price concessions and product returns. At March 31, 2020, such reserves totaled $353.0 million. Auditing management's estimates of variable consideration resulting from price concessions and product returns under the distributor contracts involved subjective auditor judgment because the estimates rely on a number of factors that are forward-looking and could be affected by future economic and market conditions including the impacts of COVID-19. The estimated concession and return rates are generally made using recent, observable experience from the prior quarter. The recent experience is evaluated to determine whether adjustments to the concession rates are needed for changing market or economic conditions. For example, estimated variable consideration resulting from price concessions and product returns included in the transaction price reflects management's evaluation of contractual terms, historical experience and assumptions about future economic conditions. Changes in those assumptions can have a material effect on the amount of variable consideration recognized. |

| *How We Addressed the Matter in Our Audit* | | We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's process to calculate the variable consideration resulting from price concessions and product returns, including management's assessment of the price concession and return rate assumptions and data underlying the estimate. Our substantive audit procedures included, among others, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management's estimate. This included comparing management’s accrual for future price concessions at a disaggregated level to historical results and testing value of the inventory held by distributors at the end of the period through a combination of inspection of source documentation for transactions executed during the period and confirmations with the distributors. We confirmed contractual terms and conditions directly with a selection of distributor customers. We evaluated whether recent return and concession experience from the prior quarter is a reasonable approximation for expected future concessions in consideration of the current market conditions. In addition, we assessed the historical accuracy of management's estimates for variable consideration resulting from price concessions and product returns and the related assumptions by performing a retrospective review on the accuracy of prior period estimates. |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

Unrecognized Tax Benefits

| | | |

| --- | --- | --- |

| | | |

| *Description of the Matter* | | As more fully described in Note 13 to the consolidated financial statements, the Company operates in a number of tax jurisdictions and its income tax returns are subject to examination by tax authorities in those jurisdictions that may challenge any tax position on these returns. Because the matters challenged by authorities are typically complex and subject to interpretation, their ultimate outcome is uncertain. The Company uses significant judgment in (1) determining whether a tax position’s technical merits are more-likely-then-not to be sustained, and (2) measuring the amount of tax benefit that qualifies for recognition. As of March 31, 2020, the Company recognized accrued liabilities for unrecognized tax benefits associated with various tax positions totaling $757.3 million. Auditing the recognition and measurement of the Company's tax transactions (in particular, intra-group intellectual property right transfers) and positions was challenging because the conclusions regarding the recognition and measurement of the tax positions is complex and highly subjective judgments are made by management to evaluate the technical merits of each position, which are based on interpretations of complex tax laws as well as administrative and legal rulings. In certain cases, the Company’s conclusions involved valuation methodologies and subjective assumptions such as revenue growth rates, measures of profitability, terminal rates, and discount rates. |

| *How We Addressed the Matter in Our Audit* | | We evaluated the design and tested the operating effectiveness of internal controls over the Company’s process to assess the technical merits and measurement of unrecognized tax benefits. For example, we tested management’s review of the inputs into intellectual property valuations and management’s assessment of other third-party information used in the evaluation of the completeness and measurement of unrecognized tax benefits. Our audit procedures included, among others, evaluating the assumptions the Company used to develop its tax positions and related unrecognized income tax benefit amounts by jurisdiction and testing the completeness and accuracy of the underlying data used by the Company to calculate its uncertain tax positions. We involved our tax professionals to assist us with obtaining an understanding of the Company’s tax structure, assessing the Company’s compliance with tax laws, related developments in administrative rulings and court cases, identifying tax law changes in jurisdictions that may impact the Company’s unrecognized tax benefits and assessing the technical merits of the Company’s tax positions. This included assessing the Company’s correspondence with the relevant tax authorities and evaluating income tax opinions or other third-party advice obtained by the Company. We also used our knowledge of, and experience with, the application of international and local income tax laws to evaluate the Company’s accounting for its tax positions. For certain material tax positions related to intra-group transactions, we assessed the assumptions and pricing methods used in setting arm’s length prices and the documentation to support the pricing, and used our tax and valuation professionals to assist in testing certain significant assumptions and pricing methods. We have also evaluated the Company’s income tax disclosures included in Note 13 in relation to these matters. |

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

May 21, 2020

[Table of Contents](#s501CD12FEE3D5169A03054EEC3946C34)

| | |

| --- | --- |

To the Shareholders and the Board of Directors of Microchip Technology Incorporated

May 30, 2019

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified and included in management’s assessment.

Management has identified a material weakness in the operating effectiveness of controls related to the Company’s income tax process.

Management has also identified a material weakness in the design effectiveness of certain IT general controls relating to system access.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Microsemi Corporation, which is included in the March 31, 2019 consolidated financial statements of Microchip Technology Incorporated and constituted approximately four percent of consolidated total assets as of March 31, 2019, and twenty eight percent of consolidated total revenues for the year then ended.

Our audit of internal control over financial reporting of Microchip Technology Incorporated also did not include an evaluation of the internal control over financial reporting of Microsemi Corporation.

The material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal 2019 consolidated financial statements, and this report does not affect our report dated May 30, 2019, which expressed an unqualified opinion thereon.

| Item1. | Financial Statements |

CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| ASSETS | | | | | | | |

| | March 31, | | | | | | |

| | 2019 | | | | 2018 | | |

| Cash and cash equivalents | $ | 428.6 | | | $ | 901.3 | |

| Short-term investments | 2.3 | | | | 1,295.3 | | |

| Accounts receivable, net | 880.6 | | | | 563.7 | | |

| Inventories | 711.7 | | | | 476.2 | | |

| Other current assets | 191.6 | | | | 119.8 | | |

| Total current assets | 2,214.8 | | | | 3,356.3 | | |

| Property, plant and equipment, net | 996.7 | | | | 767.9 | | |

| Goodwill | 6,663.9 | | | | 2,299.0 | | |

| Intangible assets, net | 6,685.6 | | | | 1,662.0 | | |

| Long-term deferred tax assets | 1,677.2 | | | | 100.2 | | |

| Other assets | 111.8 | | | | 71.8 | | |

| Total assets | $ | 18,350.0 | | | $ | 8,257.2 | |

| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |

| Accounts payable | $ | 226.4 | | | $ | 144.1 | |

| Accrued liabilities | 787.3 | | | | 229.6 | | |

| Deferred income on shipments to distributors | — | | | | 333.8 | | |

| Current portion of long-term debt | 1,360.8 | | | | 1,309.9 | | |

| Total current liabilities | 2,374.5 | | | | 2,017.4 | | |

| Long-term debt | 8,946.2 | | | | 1,758.4 | | |

| Long-term income tax payable | 756.2 | | | | 754.9 | | |

| Long-term deferred tax liability | 706.1 | | | | 205.8 | | |