UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 23, 2002
MICROCHIP TECHNOLOGY INCORPORATED
(Exact name of Registrant as specified in its charter)
Delaware 0-21184 86-062904
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation) Identification Number)
2355 West Chandler Boulevard, Chandler, Arizona 85224-6199
(Address of principal executive offices)
(480) 792-7200
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 23, 2002, we closed the acquisition of a semiconductor
manufacturing facility in Gresham, Oregon from Fujitsu Microelectronics, Inc.,
referred to as FMI. The acquisition was pursuant to a Purchase and Sale
Agreement between us and FMI, dated as of July 17, 2002, a copy of which was
filed as Exhibit 2.1 to our current report on Form 8-K filed on July 18, 2002.
Pursuant to the Purchase and Sale Agreement, we acquired, subject to
specific exclusions as set forth in the Purchase and Sale Agreement, certain of
the assets of FMI, consisting of an approximately 140-acre campus, buildings
totaling approximately 826,500 square feet (including approximately 200,000
square feet of clean room space) and manufacturing equipment. The total purchase
price was $183.5 million in cash, which we paid from our existing cash and cash
equivalent balances.
We intend to use the facility to manufacture semiconductors. FMI
manufactured semiconductors at the facility. We negotiated the purchase price at
arm's length and there is no material relationship between FMI and us or any of
our affiliates, or our officers or directors or the associates of any such
officer or director.
As part of the transaction, FMI donated approximately 60 acres of land
adjacent to the manufacturing facility, which is largely designated as a natural
resource area, directly to the City of Gresham, Oregon for local and regional
open space. At closing, the approximately 60 acres of land adjacent to the
manufacturing facility was transferred directly by FMI to the City of Gresham,
Oregon. The transfer of the 60 acres to the City of Gresham did not result in a
reduction of the total purchase price. The remaining approximately 140 acres,
including the approximately 60 acres where the manufacturing facilities are
located, provides us with ample land for future facility expansion and site
development.
One of the closing conditions of our acquisition of the Gresham facility
was the qualification of the Gresham facility under the state of Oregon's
Strategic Investment Program, or SIP. Final state of Oregon approval was
obtained on August 23, 2002. The SIP will become effective for us beginning July
1, 2003 and will be effective for a period of seven years. The SIP will provide
us with a partial property tax exemption on the Gresham facility. The SIP
exemption requires us to pay property tax on the first $100,000,000.00 of
assessed value of the Gresham facility; the $100,000,000.00 taxable base
increases each year by three percent. To maintain the SIP once it becomes
effective on July 1, 2003, we must comply with certain requirements including:
* meeting certain minimum employment levels in each of the years covered
by the SIP
* complying with a first source hiring agreement regarding hiring of new
employees at the Gresham facility, and
* annual contributions to the Mt. Hood Community College
Microelectronics Training Center.
A copy of the SIP agreement between us, Multnomah County, Oregon and the
City of Gresham, Oregon is filed as Exhibit 2.2 to this report on Form 8-K.
We currently intend to maintain our Fab 3 (Puyallup, Washington)
manufacturing facility until it is required for future production. We are,
however, evaluating whether an impairment charge on Fab 3 will be required
following our acquisition of the Gresham facility. If required, we expect that
such impairment charge would be taken in the quarter ending September 30, 2002.
Now that the acquisition of the Gresham, Oregon facility has been completed, we
will commence relocating the manufacturing process equipment from Fab 3 to our
wafer fabrication facilities in Chandler (Fab 1) and Tempe, Arizona (Fab 2), and
will also begin relocating certain equipment from Fab 3 to the Gresham, Oregon
facility to create a closer equipment match to our Fab 2 wafer fabrication
facility in order to facilitate a quicker process start at the Gresham facility.
THE FOREGOING STATEMENTS RELATED TO THE 140-ACRES PROVIDING AMPLE LAND FOR
FUTURE FACILITY EXPANSION AND SITE DEVELOPMENT, OUR INTENTION TO MAINTAIN OUR
PUYALLUP MANUFACTURING FACILITY UNTIL IT IS REQUIRED FOR FUTURE PRODUCTION,
EVALUATION OF THE PUYALLUP FACILITY TO DETERMINE IF AN IMPAIRMENT CHARGE WILL BE
REQUIRED FOLLOWING THE CLOSING OF THE ACQUISITION OF THE GRESHAM FACILITY, THE
TIMING OF ANY IMPAIRMENT CHARGE, RELOCATION OF EQUIPMENT FROM THE PUYALLUP
FACILITY TO OUR OTHER MANUFACTURING FACILITIES AND THE RELOCATION OF EQUIPMENT
FACILITATING A QUICKER PROCESS START IN THE GRESHAM FACILITY ARE FORWARD-LOOKING
STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY, INCLUDING, BUT NOT LIMITED
TO: FUTURE DEMAND FOR OUR PRODUCTS AND THOSE OF OUR CUSTOMERS; DELAYS IN PERMIT
TRANSFERS AND/OR FACILITIZATION OF THE GRESHAM FACILITY; OUR ABILITY TO RAMP
PRODUCTS INTO VOLUME PRODUCTION AT THE GRESHAM FACILITY; AVAILABILITY OF
EQUIPMENT AND OTHER SUPPLIES; THE ABILITY TO ATTRACT AND RETAIN QUALIFIED
PERSONNEL IN THE GRESHAM AREA; COMPETITIVE FACTORS, SUCH AS COMPETING
ARCHITECTURES AND MANUFACTURING TECHNOLOGIES AND ACCEPTANCE OF NEW PRODUCTS IN
THE MARKETS WE GENERALLY SERVE; OUR TIMELY INTRODUCTION OF NEW TECHNOLOGIES;
IMPACTS OF EVENTS OUTSIDE OF THE UNITED STATES, SUCH AS THE BUSINESS IMPACT OF
FLUCTUATING CURRENCIES OR UNREST OR POLITICAL INSTABILITY; DISRUPTIONS IN
INTERNATIONAL TRANSPORT OR DELIVERY OCCASIONED BY TERRORIST ACTIVITY, ARMED
CONFLICT, WAR OR AN UNEXPECTED INCREASE IN THE PRICE OF, OR DECREASE IN SUPPLY
OF, OIL; AND GENERAL INDUSTRY, POLITICAL AND ECONOMIC CONDITIONS.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
2.1 Purchase and Sale Agreement, dated as of July 17, 2002 between
Microchip Technology Incorporated and Fujitsu Microelectronics,
Inc. [Incorporated by reference to Exhibit 2.1 to Registrant's
Current Report on Form 8-K dated July 17, 2002]
2.2 Strategic Investment Program Contract dated as of August 15, 2002
by and between Registrant, Multnomah County, Oregon and City of
Gresham, Oregon
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 26, 2002 Microchip Technology Incorporated
By: /s/ Gordon W. Parnell
------------------------------------
Gordon W. Parnell
Vice President, Chief Financial
Officer (Principal Accounting and
Financial Officer)
INDEX TO EXHIBITS FILED WITH
THE CURRENT REPORT ON FORM 8-K DATED AUGUST 23, 2002
Exhibit 2.1 Purchase and Sale Agreement, dated as of July 17, 2002 between
Microchip Technology Incorporated and Fujitsu Microelectronics,
Inc. [Incorporated by reference to Exhibit 2.1 to Registrant's
Current Report on Form 8-K dated July 17, 2002 and filed July
18, 2002]
Exhibit 2.2 Strategic Investment Program Contract dated as of August 15, 2002
by and between Registrant, Multnomah County, Oregon and City of
Gresham, Oregon