Trends and Challenges Organizations follow to Capture the Market Date:   Friday , August 31, 2012 Chandler, Arizona headquartered Microchip Technology (NASDAQ: MCHP) is a manufacturer of microcontroller, memory and analog semiconductors. Its products include microcontrollers (PICmicro, dsPIC / PIC24, PIC32), Serial EEPROM devices, Serial SRAM devices, KEELOQ devices, radio frequency (RF) devices, thermal, power and battery management analog devices, as well as linear, interface and mixed signal devices. Some of the interface devices include USB, ZigBee/MiWi, Controller Area Network, and Ethernet. Technology continues to become more pervasive in all aspects of our lives, while the semiconductor is the driving force behind all these innovative technologies. In fact, the growth in the semiconductor market revolves around building more intelligence into everyday devices. Users have come to expect improved interfaces in all of the products they purchase and interact with. This includes the expectation for touch-sensing interfaces, as well as technologies that give us bigger, brighter and better displays. Therefore, understanding the market trends and challenges faced by the customers, and leading the market with pioneering technologies are critical factors for the industry’s success. Still, the biggest technical challenges for embedded systems designers remain time to market for new ideas, and then keeping the new ideas coming. Some of the specific areas where they are facing particular challenges stem from the demands they face for products with higher functionality in smaller form factors, along with lower power consumption yielding longer battery life and more intuitive display technologies, which are increasingly moving from traditional consumer applications to a broad spectrum of embedded designs. Human-to-machine interface has been a leading force for technology answers, in every space from smart phones to mobile computing to consumer products and appliances, and finally making its way into automotive in a big way. Microchip has made significant investments in developing new technologies for human-interface and display needs, and we plan to continue focusing on that space. Our mTouch™ portfolio of touch-sensing solutions works in conjunction with our vast microcontroller product line to enable everything from capacitive buttons and sliders, all the way up to projected-capacitive touch screens with multi-touch capabilities. In some cases, we have integrated the peripherals for driving graphic displays and capacitive touch sensing into a single microcontroller. Wireless-connectivity integration continues to proliferate, and its cost-effective solution base is becoming quite real. Our efforts here are also focused on providing unique and complete solutions that provide true ease of use, as well as rapid implementation that covers all of the major standards. In particular, our 32-bit PIC32 microcontroller portfolio has developed critical mass and will be a major force in the battle for high-performance embedded control computing. More recently, we have seen an increasing need for Bluetooth® connectivity in embedded applications. Our recent acquisition of Roving Networks brings Microchip’s customers a rich portfolio of Bluetooth solutions, while expanding our Wi-Fi® capabilities. Maximizing battery life is another essential area for embedded designers. Lowering power consumption while providing acceptable performance is challenging, as low power and high performance are opposing forces. Our eXtreme Low Power (XLP) PIC® microcontrollers have the industry’s lowest active and sleep power consumption, along with high levels of integration in small packages. This XLP technology allows Microchip to adopt more advanced processes, while keeping sleep leakage currents low. Microchip has also made great strides in reducing active power—providing the best of both worlds, in terms of the lowest overall power consumption. At Microchip, we remain dedicated to helping our clients solve their business challenges, with technical solutions and products that give them a unique competitive advantage in their marketplaces. We also continue to develop new technologies and new products at a record pace. Most importantly, we are the market leader in helping designers get to market faster, develop their new products in a low-risk environment and reduce their overall system-level cost of production.