Microchip Technology (MCHP) 10-Q 6 Nov 09 2010 Q2 Quarterly report Financial data

CONOLIDATED BALANCE SHEETS

CONOLIDATED BALANCE SHEETS (USD $)
In Thousands	Sep. 30, 2009	Mar. 31, 2009
ASSETS
Cash and cash equivalents	$541,045	$446,329
Short-term investments	822,949	943,616
Accounts receivable, net	106,651	88,525
Inventories	108,451	131,510
Prepaid expenses	14,055	11,447
Deferred tax assets	78,076	75,681	[1]
Other current assets	56,229	51,736
Total current assets	1,727,456	1,748,844	[1]
Property, plant and equipment, net	497,958	531,687
Long-term investments	108,729	50,826
Goodwill	36,165	36,165
Intangible assets, net	28,775	25,718
Other assets	19,202	18,526	[1]
Total assets	2,418,285	2,411,766	[1]
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	33,926	29,228
Accrued liabilities	50,163	42,486
Deferred income on shipments to distributors	86,261	83,931
Total current liabilities	170,350	155,645
Junior convertible debentures	337,403	334,184	[1]
Long-term income tax payable	75,522	70,051
Deferred tax liability	372,700	365,734	[1]
Other long-term liabilities	3,993	3,834
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, $0.001 par value; 450,000,000 shares authorized; 218,789,994 shares issued and 183,578,105 shares outstanding at September 30, 2009; 218,789,994 shares issued and 182,769,124 shares outstanding at March 31, 2009	184	183
Additional paid-in capital	1,276,206	1,273,876	[1]
Retained earnings	1,247,094	1,299,317	[1]
Accumulated other comprehensive income	4,349	4,312
Common stock held in treasury: 35,211,889 shares at September 30, 2009; 36,020,870 shares at March 31, 2009	(1,069,516)	(1,095,370)
Total stockholders' equity	1,458,317	1,482,318	[1]
Total liabilities and stockholders' equity	$2,418,285	$2,411,766	[1]
[1]As adjusted due to the adoption of ASC subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion

PARENTHETICAL DATA TO THE CONSO

PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEETS (USD $)
	Sep. 30, 2009	Mar. 31, 2009
Stockholders' equity:
Preferred stock - par value	0.001	0.001
Preferred stock - shares authorized	5,000,000	5,000,000
Preferred Stock - Shares Issued	0	0
Common stock - par value	0.001	0.001
Common stock - shares authorized	450,000,000	450,000,000
Common stock - shares issued	218,789,994	218,789,994
Common stock - shares outstanding	183,578,105	182,769,124
Treasury stock - shares	35,211,889	36,020,870

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 30, 2009		3 Months Ended Sep. 30, 2008		6 Months Ended Sep. 30, 2009		6 Months Ended Sep. 30, 2008
Net sales	$226,661		$269,706		$419,610		$537,878
Cost of sales	103,321	[3]	105,553	[2]	199,835	[4]	210,128	[5]
Gross profit	123,340		164,153		219,775		327,750
Operating expenses:
Research and development	29,568	[3]	31,343	[2]	57,204	[4]	62,895	[5]
Selling, general and administrative	41,046	[3]	45,629	[2]	77,429	[4]	91,042	[5]
Special charge	0		0		1,238		0
Total operating expenses	70,614		76,972		135,871		153,937
Operating income	52,726		87,181		83,904		173,813
Other income (expense):
Interest income	4,479		10,152		7,781		20,351
Interest expense	(8,030)		(6,870)	[1]	(15,549)		(14,512)	[1]
Other, net	2,107		1,671		7,801		4,416
Income before income taxes	51,282		92,134	[1]	83,937		184,068	[1]
Income tax provision	6,797		16,414	[1]	12,084		32,801	[1]
Net income	$44,485		$75,720	[1]	$71,853		$151,267	[1]
Basic net income per common share	0.24		0.41	[1]	0.39		0.82	[1]
Diluted net income per common share	0.24		0.4	[1]	0.39		0.8	[1]
Dividends declared per common share	0.339		0.338		0.678		0.668
Basic common shares outstanding	183,190		183,615		183,023		184,139
Diluted common shares outstanding	186,922		187,936		186,224		189,493
[1]As adjusted due to the adoption of ASC subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion
[2]Includes share-based compensation expense as follows: Cost of sales $2,053 Research and development $2,640 Selling, general and administrative $3,800
[3]Includes share-based compensation expense as follows: Cost of sales $1,869 Research and development $3,108 Selling, general and administrative $4,523
[4]Includes share-based compensation expense as follows: Cost of sales $3,579 Research and development $6,097 Selling, general and administrative $8,822
[5]Includes share-based compensation expense as follows: Cost of sales $3,678 Research and development $5,075 Selling, general and administrative $7,439

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	6 Months Ended Sep. 30, 2009	6 Months Ended Sep. 30, 2008
Cash flows from operating activities:
Net income	$71,853	$151,267	[1]
Adjustments to reconcile net income to net cash provided by operating activitie
Depreciation and amortization	45,298	48,181
Deferred income taxes	5,545	8,534
Share-based compensation expense related to equity incentive plans	18,498	16,192
Tax benefit from equity incentive plans	716	9,350
Excess tax benefit from share-based compensation	(709)	(8,555)
Convertible debt derivatives - revaluation and amortization	152	(624)
Amortization of convertible debenture issuance costs	247	383
Gain on sale of assets	0	(98)
Special charge	1,238	0
Purchases/sales of trading securities	86,970	(15,945)
Gain on trading securities	(7,425)	(4,060)
Unrealized impairment loss on available-for-sale investments	1,642	1,196
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(18,126)	17,431
Decrease (increase) in inventories	23,050	(2,962)
Increase in deferred income on shipments to distributors	2,330	8,066
Increase in accounts payable and accrued liabilities	11,137	22,332
Change in other assets and liabilities	676	16,799	[1]
Net cash provided by operating activities	243,092	267,487
Cash flows from investing activities:
Purchases of available-for-sale investments	(551,394)	(344,992)
Sales and maturities of available-for-sale investments	532,034	183,028
Investment in other assets	(4,893)	(596)
Proceeds from sale of assets	0	144
Capital expenditures	(9,733)	(68,016)
Net cash used in investing activities	(33,986)	(230,432)
Cash flows from financing activities:
Payment of cash dividend	(124,074)	(123,145)
Repurchase of common stock	0	(123,929)
Proceeds from sale of common stock	8,975	25,466
Excess tax benefit from share-based compensation	709	8,555
Net cash used in financing activities	(114,390)	(213,053)
Net increase (decrease) in cash and cash equivalents	94,716	(175,998)
Cash and cash equivalents at beginning of period	446,329	487,736
Cash and cash equivalents at end of period	$541,045	$311,738
[1]As adjusted due to the adoption of ASC subtopic 470-20, Debt with Conversion and Other Options - Cash Conversion

BASIS OF PRESENTATION

BASIS OF PRESENTATION
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Basis of Presentation	(1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Microchip Technology Incorporated and its wholly-owned subsidiaries (the Company).All intercompany balances and transactions have been eliminated in consolidation.The Company owns 100% of the outstanding stock in all of its subsidiaries. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC).In the opinion of management, all adjustments of a normal recurring nature which are necessary for a fair presentation have been included.Certain information and footnote disclosures normally included in audited consolidated financial statements have been condensed or omitted pursuant to such SEC rules and regulations.It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009.The results of operations for the three and six months ended September 30, 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2010 or for any other period. Subsequent events have been evaluated through November 6, 2009, which is the date the financial statements were issued.

RECENTLY ISSUED ACCOUNTING PRON

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Adopted and Recently Issued Accounting Pronouncements	(2) Adopted and Recently Issued Accounting Pronouncements Accounting Standards Codification. Effective July 1, 2009, the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) became the single official source of authoritative, nongovernmental generally accepted accounting principles (GAAP) in the United States.The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission.The codification was effective for interim and annual reporting periods ending after September 15, 2009, except for certain nonpublic nongovernmental entities.The Company's accounting policies were not affected by the conversion to ASC.However, references to specific accounting standards in the footnotes to the Company's consolidated financial statements have been changed to refer to the appropriate section of ASC. Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion.On April 1, 2009, the Company adopted the Cash Conversion Subsections of ASC Subtopic 470-20, Debt with Conversion and Other Options Cash Conversion (the Cash Conversion Subsections), which clarify the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion.The Cash Conversion Subsections require issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized.The Cash Conversion Subsections require bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in the Company's consolidated statements of operations. The Cash Conversion Subsections require retrospective application to the terms of instruments as they existed for all periods presented.The adoption of the Cash Conversion Subsections affects the accounting for the Company's 2.125% junior subordinated convertible debentures issued in December 2007 and due in December 2037.The retrospective application of this guidance affects the Company's fiscal years 2008 and 2009. The following table sets forth the effect of the retrospective application of the Cash Conversion Subsections on certain previously reported line items (in thousands, except per share data): Condensed Consolidated Statements of Income: Three Months Ended September 30, 2008 Six Months Ended September 30, 2008 As Reported As Adjusted As Reported As Adjusted Interest expense $ (5,582 ) $ (6,870 ) $ (11,983 ) $ (14,512 ) Income before income taxes $ 93,422 $ 92,134 $ 186,597 $ 184,068 Income tax provision $ 16,910 $ 16,414 $ 33,775 $ 32,801 Net income $ 76,512 $ 75,720 $ 152,822 $ 151,267 Basic net income per common share $ 0.42 $ 0.41 $ 0.83 $ 0.82 Diluted net income per commo

SPECIAL CHARGE

SPECIAL CHARGE
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Special Charge	(3)Special Charge During the three months ended June 30, 2009, the Company agreed to the terms of a patent license with an unrelated third-party and signed an agreement on July 9, 2009. The patent license settled alleged infringement claims. The total payment made to the third-party in July 2009 was $1.4 million, $1.2 million of which was expensed in the first quarter of fiscal 2010 and the remaining $0.2 million was recorded as a prepaid royalty that will be amortized over the remaining life of the patent, which expires in June 2010.

INVESTMENTS

INVESTMENTS
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Investments	(4)Investments The Company's investments are intended to establish a high-quality portfolio that preserves principal, meets liquidity needs, and delivers an appropriate yield in relationship to the Company's investment guidelines and market conditions.The following is a summary of available-for-sale and trading securities at September 30, 2009 (amounts in thousands): Available-for-sale Securities Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Government agency bonds $ 398,086 $ 981 $ 55 $ 399,012 Municipal bonds 302,925 3,710 --- 306,635 Auction rate securities 17,259 --- --- 17,259 Corporate bonds 177,126 1,390 273 178,243 $ 895,396 $ 6,081 $ 328 $ 901,149 Trading Securities Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Marketable equity securities $ 5 $ --- $ 1 $ 4 Auction rate securities 28,021 --- --- 28,021 Put option on auction rate securities 2,504 --- --- 2,504 $ 30,530 $ --- $ 1 $ 30,529 At September 30, 2009, the Company's available-for-sale and trading securities are presented on the condensed consolidated balance sheets as short-term investments of $822.9 million and long-term investments of $108.7 million. The Company has classified its strategic investments in publicly traded companies as trading securities. During the three months ended September 30, 2009, the Company sold all but $4,000 of the $29.8million of trading securities that it owned at June 30, 2009.During the three and six months ended September 30, 2009, the Company recognized a gain in earnings of $1.9 million and $6.6million, respectively, on these trading securities.The Company had a net realized gain of $4.9 million and $1.0 million, respectively, on trading securities that it sold during the three and six months ended September 30, 2009. At September 30, 2009, $45.3 million of the fair value of the Company's investment portfolio was invested in auction rate securities (ARS).With the continuing liquidity issues in the global credit markets, the Company's ARS have experienced multiple failed auctions. In September2007 and February2008, auctions for $24.9 million and $34.8 million, respectively, of the original purchase value of the Company's investments in ARS first failed. While the Company continues to earn interest on these investments based on a pre-determined formula with spreads tied to particular interest rate indices, the estimated market value for these ARS no longer approximates the original purchase value. The $24.9 million in failed auctions have continued to fail through the filing date of this Quarterly Report on Form 10-Q.The fair value of the failed ARS of $17.3million has been estimated based on market information and estimates determined by management and could change significantly based on market conditions. The Company evaluated the impairments in the value of t

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Fair Value Measurements	(5)Fair Value Measurements Accounting rules for fair value clarify that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Observable inputs such as quoted prices in active markets; Level 2 Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3 Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value on a recurring basis at September 30, 2009 are as follows (amounts in thousands): Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Balance Assets Money market fund deposits $ 329,339 $ --- $ --- $ 329,339 Deposit accounts --- 211,706 --- 211,706 Government agency bonds --- 399,012 --- 399,012 Municipal bonds --- 306,635 --- 306,635 Auction rate securities --- --- 45,280 45,280 Put option on auction rate securities --- --- 2,504 2,504 Corporate bonds --- 178,243 --- 178,243 Marketable securities 4 --- --- 4 Total assets measured at fair value $ 329,343 $ 1,095,596 $ 47,784 $ 1,472,723 For Level 3 valuations, the Company estimated the fair value of its ARS based on the following: (i)the underlying structure of each security; (ii)the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; (iii)consideration of the probabilities of default, auction failure, or repurchase at par for each period; and (iv) estimates of the recovery rates in the event of default for each security.The Company estimated the value of the put option on the ARS by evaluating the estimated cash flows before and after the receipt of the put option, discounted at rates reflecting the likelihood of default and lack of liquidity, or in the case of the payment of the par value to be paid by the broker at exercise of the put option, the counterparty credit risk.The estimated fair values that are categorized as Level 3 as well as the marketable securities and put options on publicly traded stock could change significantly based on future market conditions. Refer to Note 4 for further discussion of the Company's investments in ARS. The following table presents a reconciliation for all assets and liabilities measured at fair value on a recurring basi

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Fair Value of Financial Instruments	(6) Fair Value of Financial Instruments The carrying amount of cash equivalents approximates fair value because their maturity is less than three months.The carrying amount of short-term and long-term investments approximates fair value as the securities are marked to market as of each balance sheet date with any unrealized gains and losses reported in stockholders' equity.The carrying amount of accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short-term maturity of the amounts.The fair value of the Company's junior subordinated convertible debentures was $1,055.2 million at September 30, 2009, based on the trading price of the bonds, compared to the carrying value of $337.4 million.See Note 11 for additional information regarding the carrying value of the Company's junior subordinated convertible debentures.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Accounts Receivable	(7) Accounts Receivable Accounts receivable consists of the following (amounts in thousands): September 30, 2009 March 31, 2009 Trade accounts receivable $ 109,315 $ 91,325 Other 556 376 109,871 91,701 Less allowance for doubtful accounts 3,220 3,176 $ 106,651 $ 88,525

INVENTORIES

INVENTORIES
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Inventories	(8) Inventories The components of inventories consist of the following (amounts in thousands): September 30, 2009 March 31, 2009 Raw materials $ 3,886 $ 3,693 Work in process 91,770 114,676 Finished goods 12,795 13,141 $ 108,451 $ 131,510 Inventory impairment charges establish a new cost basis for inventory and charges are not subsequently reversed to income even if circumstances later suggest that increased carrying amounts are recoverable.

PROPERTY PLANT AND EQUIPMENT

PROPERTY PLANT AND EQUIPMENT
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Property Plant and Equipment	(9) Property, Plant and Equipment Property, plant and equipment consists of the following (amounts in thousands): September 30, 2009 March 31, 2009 Land $ 39,671 $ 39,671 Building and building improvements 335,578 334,717 Machinery and equipment 1,162,588 1,148,588 Projects in process 104,341 114,478 1,642,178 1,637,454 Less accumulated depreciation and amortization 1,144,220 1,105,767 $ 497,958 $ 531,687 Depreciation expense attributed to property, plant and equipment was $43.5million in the six months ended September 30, 2009 and $47.2million in the six months ended September 30, 2008.

INCOME TAXES

INCOME TAXES
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Income Taxes	(10)Income Taxes The provision for income taxes reflects tax on foreign earnings and federal and state tax on U.S. earnings.The Company had an effective tax rate of 14.4% for the six-month period ended September 30, 2009 and 17.8% for the six-month period ended September 30, 2008.The Company's effective tax rate is lower than statutory rates in the U.S. due primarily to its mix of earnings in foreign jurisdictions with lower tax rates. At March31, 2009, the Company had $70.1 million of unrecognized tax benefits.Unrecognized tax benefits increased by $5.5 million in the six months ended September 30, 2009 compared to the March 31, 2009 balances as a result of the accrual for uncertain tax positions and the accrual of deficiency interest on these positions. The Company files U.S. federal, U.S. state, and foreign income tax returns. For U.S. federal, and in general for U.S. state tax returns, the fiscal 2002 through fiscal 2004 and fiscal 2006 through fiscal 2009 tax years remain open for examination by tax authorities. For foreign tax returns, the Company is generally no longer subject to income tax examinations for years prior to fiscal 2002. The Company recognizes liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional tax payments are more likely than not.The Company believes that it maintains adequate reserves to offset any potential income tax liabilities that may arise upon final resolution of matters for open tax years. The U.S. IRS is currently auditing the Company's fiscal years ended March 31, 2002, 2003, 2004, 2006, 2007 and 2008.The Company believes that it has appropriate support for the income tax positions taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. If such amounts ultimately prove to be unnecessary, the resulting reversal of such reserves would result in tax benefits being recorded in the period the reserves are no longer deemed necessary. If such amounts prove to be less than an ultimate assessment, a future charge to expense would be recorded in the period in which the assessment is determined. Although the timing of the resolution and/or closure on audits is highly uncertain, the Company does not believe it is reasonably possible that its unrecognized tax benefits would materially change in the next 12months.

2.125% JUNIOR SUBORDINATED CONV

2.125% JUNIOR SUBORDINATED CONVERTIBLE DEBENTURES
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Junior Subordinated Convertible Debentures	(11)2.125% Junior Subordinated Convertible Debentures The Company's $1.15 billion principal amount of 2.125% junior subordinated convertible debentures due December 15, 2037, are subordinated in right of payment to any future senior debt of the Company and are effectively subordinated in right of payment to the liabilities of the Company's subsidiaries.The debentures are convertible, subject to certain conditions, into shares of the Company's common stock at an initial conversion rate of 29.2783 shares of common stock per $1,000 principal amount of debentures, representing an initial conversion price of approximately $34.16 per share of common stock.As of September 30, 2009, none of the conditions allowing holders of the debentures to convert had been met.As a result of a cash dividend of $0.339 per share paid in September 2009, the conversion rate was adjusted to 32.1283 shares of common stock per $1,000 of principal amount of debentures, representing a conversion price of approximately $31.13 per share of common stock. As the debentures can be settled in cash upon conversion, for accounting purposes, the debentures were bifurcated into a liability component and an equity component, which are initially recorded at fair value. The carrying value of the equity component at September 30, 2009 and at March 31, 2009 was $822.4 million. The estimated fair value of the liability component of the debentures at the issuance date was $327.6 million, resulting in a debt discount of $822.4 million. The unamortized debt discount was $811.9 million at September 30, 2009 and $815.0 million at March 31, 2009. The carrying value of the debentures was $337.4 million at September 30, 2009 and $334.2 million at March 31, 2009. The remaining period over which the unamortized debt discount will be recognized as non-cash interest expense is 28.25 years. In the three and six months ended September 30, 2009, the Company recognized $1.6million and $3.1million, respectively, in non-cash interest expense related to the amortization of the debt discount.In the three and six months ended September 30, 2008, the Company recognized $1.4million and $2.8million, respectively, in non-cash interest expense related to the amortization of the debt discount.The Company recognized $6.1 million and $12.2 million of interest expense related to the 2.125% coupon on the debentures in the three and six months ended September30, 2009 and 2008, respectively. The debentures also include certain embedded features related to the contingent interest payments, the Company making specific types of distributions (e.g., extraordinary dividends), the redemption feature in the event of changes in tax law, and penalty interest in the event of a failure to maintain an effective registration. These features qualify as derivatives and are bundled as a compound embedded derivative that is measured at fair value.The fair value of the derivative as of September 30, 2009 was $0.6million, compared to the value at March 31, 2009 of $0.5million, resulting in an increase of interest expense in the first six months of fiscal 2010 of $0.1million.The balance of the debentures on the Company's condens

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Derivative Instruments	(12)Derivative Instruments The Company has international operations and is thus subject to foreign currency rate fluctuations.To manage the risk of changes in foreign currency rates, the Company periodically enters into derivative contracts comprised offoreign currency forward contracts to hedge its asset and liability foreign currency exposure and a portion of its foreign currency operating expenses.Approximately 99% of the Company's sales are U.S. Dollar denominated.To date, the exposure related to foreign exchange rate volatility has not been material to the Company's operating results.As of September 30, 2009 and March 31, 2009, the Company had no foreign currency derivatives outstanding.The Company recognized an immaterial amount of net realized gains on foreign currency derivatives in the six months ended September 30, 2009.

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Employee Benefit Plans	(14) Employee Benefit Plans Share-Based Compensation Expense The following table presents details of share-based compensation expense (amounts in thousands): Three Months Ended September 30, Six Months Ended September 30, 2009 2008 2009 2008 Cost of sales $ 1,869 (1) $ 2,053 (1) $ 3,579 (1) $ 3,678 (1) Research and development 3,108 2,640 6,097 5,075 Selling, general and administrative 4,523 3,800 8,822 7,439 Pre-tax effect of share-based compensation 9,500 8,493 18,498 16,192 Income tax benefit 1,235 1,537 2,405 2,930 Net income effect of share-based compensation $ 8,265 $ 6,956 $ 16,093 $ 13,262 (1) During the three and six months ended September 30, 2009, $1.8 million and $3.6 million, respectively, was capitalized to inventory and $1.9million and $3.6 million, respectively, of previously capitalized inventory was sold.During the three and six months ended September 30, 2008, $1.7million and $3.1 million, respectively, was capitalized to inventory and $2.1 million and $3.7 million, respectively, of previously capitalized inventory was sold. The amount of unearned share-based compensation currently estimated to be expensed in the remainder of fiscal 2010 through fiscal 2014 related to unvested share-based payment awards at September 30, 2009 is $54.1million.The weighted average period over which the unearned share-based compensation is expected to be recognized is approximately 2.27 years. Combined Incentive Plan Information The total intrinsic value of restricted stock units (RSUs) which vested during the three and six months ended September 30, 2009 was $4.2million and $6.7 million, respectively.The aggregate intrinsic value of RSUs outstanding at September 30, 2009 was $109.5million, calculated based on the closing price of the Company's common stock of $26.50 per share on September 30, 2009.At September 30, 2009, the weighted average remaining expense recognition period was 2.37 years. The weighted average fair value per share of the RSUs awarded is calculated based on the fair market value of the Company's common stock on the respective grant dates discounted for the Company's expected dividend yield.The weighted average fair value per share of RSUs awarded in the three and six months ended September 30, 2009 was $19.10and $18.08, respectively.The weighted average fair value per share of RSUs awarded in the three and six months ended September 30, 2008 was $26.74 and $27.36, respectively. The total intrinsic value of options exercised during the three and six months ended September 30, 2009 was $2.0million and $2.3 million, respectively.This intrinsic value represents the difference between the fair market value of the Company's common stock on the date of exercise and the exercise price of each equity award. The aggregate intrinsic value of options outstanding and options exercisable at September 30, 2009 was $25.8million and $25.0 million, respectively.The aggregate intrinsic values were calculated based on t

NET INCOME PER COMMON SHARE

NET INCOME PER COMMON SHARE
	6 Months Ended Jun. 30, 2009
Notes To Financial Statements [Abstract]
Net Income Per Common Share	(15) Net Income Per Common Share The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share amounts): Three Months Ended September 30, Six Months Ended September 30, 2009 2008 2009 2008 Net income $ 44,485 $ 75,720 $ 71,853 $ 151,267 Weighted average common shares outstanding 183,190 183,615 183,023 184,139 Dilutive effect of stock options and RSUs 3,732 4,321 3,201 4,765 Dilutive effect of convertible debt --- --- --- 589 Weighted average common and potential common shares outstanding 186,922 187,936 186,224 189,493 Basic net income per common share $ 0.24 $ 0.41 $ 0.39 $ 0.82 Diluted net income per common share $ 0.24 $ 0.40 $ 0.39 $ 0.80 Diluted net income per common share for the three and six months ended September 30, 2009 does not include any incremental shares issuable upon the exchange of the debentures (see Note 11).The three-month period ended September 30, 2008 does not include any incremental shares issuable upon the exchange of the debentures.The six-month period ended September 30, 2008 includes 588,892 incremental shares issuable upon the exchange of the debentures.The debentures have no impact on diluted net income per common share unless the average price of the Company's common stock exceeds the conversion price because the principal amount of the debentures will be settled in cash upon conversion.Prior to conversion, the Company will include, in the diluted net income per common share calculation, the effect of the additional shares that may be issued when the Company's common stock price exceeds the conversion price using the treasury stock method.The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three and six months ended September 30, 2009 was $31.35 and $31.59, respectively. Weighted average common shares exclude the effect of anti-dilution option shares.As of the three and six-month periods ended September 30, 2009, the number of option shares that were antidilutive was 4,250,079 and 6,033,106, respectively.As of the three and six-month periods ended September 30, 2008, the number of option shares that were antidilutive was 275,102 and 149,529, respectively.

STOCK REPURCHASE

STOCK REPURCHASE
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Stock Repurchase	(16) Stock Repurchase During the three and six months ended September 30, 2009, the Company did not repurchase any of its shares of common stock.During the three and six months ended September 30, 2008, the Company purchased 3.3 million and 4.0 million shares of its common stock for a total of $100.3 million and $123.9 million, respectively.The timing and amount of future repurchases will depend upon market conditions, interest rates, and corporate considerations. As of September 30, 2009, the Company held approximately 35.2million shares as treasury shares.

DIVIDENDS

DIVIDENDS
	6 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Dividends	(17) Dividends A quarterly cash dividend of $0.339 per share was paid on September 3, 2009 in the aggregate amount of $62.1million.A quarterly cash dividend of $0.34 per share was declared on November 4, 2009 and will be paid on December 2, 2009 to shareholders of record as of November18, 2009.The Company expects the December 2009 payment of its quarterly cash dividend to be approximately $62.3million.

Document Information

Document Information
	6 Months Ended Sep. 30, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	2009-09-30
Amendment Flag	false

Entity Information

Entity Information (USD $)
In Thousands, except Share data	6 Months Ended Sep. 30, 2009	Oct. 30, 2009	Sep. 30, 2008
Entity Information [Line Items]
Entity Registrant Name	MICROCHIP TECHNOLOGY INC
Entity Central Index Key	0000827054
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$5,215,718
Entity Common Stock Shares Outstanding		183,591,698