Say goodbye to 2023 and look forward to 2024

——Microchip is willing to work hand in hand with you to create a better future.

Microchip President and CEO

Ganesh Moorthy

It’s time to say goodbye to 2023. As we bid farewell to the old and welcome the new, I would like to express my most sincere gratitude to all Microchip employees, customers, suppliers, channel partners and shareholders. It is your unwavering support and commitment that allowed us to overcome the challenges of the past year and laid a solid foundation for Microchip's long-term development.

The situation in 2023 has changed. Although the business momentum was strong at the beginning, we later encountered macroeconomic instability, but we still dealt with it all effectively. Faced with the weakening of demand visibility, we not only help customers reduce inventory risks and strive for a win-win result, but also significantly shorten the delivery time of most products from 52 weeks to less than 8 weeks. We firmly believe that keeping lead times short is the best strategy to ride the wave during these difficult times, allowing us and our customers to respond to unpredictable market conditions in a more agile and efficient manner.

We are committed to achieving an optimal balance of inventory to both meet customer demand and prepare for strong long-term growth as the macro environment improves. As with all semiconductor industry cycles, we are proactively employing proven, proven strategies that incorporate stability and resilience to meet challenges. We remain focused on sustainable long-term growth while adapting our speed and responsiveness to implement short-term adjustments as needed.

Microchip's inherent stability and resilience are embedded in our core values, and our culture and people are the cornerstone of our success. All of this is further enhanced by our in-house experienced leadership team. We focus on complete system solutions in key trend areas and are committed to smoothly promoting the entire process of "design-win", making us invincible in the markets we serve. This also drives our continued investment in employee development and empowerment, ensuring we retain valuable team members during challenging business cycles. It is undeniable that our employees are our greatest asset!

The solid cash generation capabilities of our business further underscore the effectiveness of Microchip's stability, resilience and growth strategy. In November of this year, we announced our 85th consecutive quarterly dividend payment and our 79th dividend increase since our inception. Throughout 2023, we returned approximately $1.7 billion to shareholders through dividends and share repurchases. This demonstrates our strong commitment to returning capital to shareholders and highlights our strong track record in doing so.

As we enter 2024, my optimism remains unabated thanks to our strong business model and absolute confidence in our leadership team. Our diligent global team allows us to effectively navigate business cycles. We will continue to steadfastly strengthen our partnerships, steadily adjust our course, and continuously enhance shareholder value - a testament to our continued success.

Despite the current macroeconomic challenges, we remain convinced that semiconductors are the engine of innovation that can continue to drive us toward richer human experiences. Our diverse product portfolio serves as a springboard for innovation in applications ranging from defense and aerospace solutions to data centers, automotive, medical equipment, industrial installations and communications infrastructure – and we are right there. at the heart of innovation. The future is extremely bright and full of hope, and we are excited to be with you all the way. Let us join hands and continue to innovate. Moving forward towards 2024!