KPMG Peat Marwick LLP

     One Arizona Center       Telephone 602 253 2000
     400 E. Van Buren Street
     Suite 1100
     Phoenix, AZ 85004


August 4, 1997

Microchip Technology Incorporated
Chandler, Arizona

Ladies and Gentlemen:

We  have  been  furnished  with a copy  of Form  10-Q  of  Microchip  Technology
Incorporated  (Microchip  or Company)  for the three months ended June 30, 1997,
and have read the  Company's  statements  contained  in Note 1 to the  condensed
consolidated  financial  statements  included therein.  As stated in Note 1, the
Company  changed its method of  accounting  for  inventories  from the  last-in,
first-out (LIFO) method to the first-in, first-out (FIFO) method and states that
the newly  adopted  accounting  principle  is  preferable  in the  circumstances
because  the  FIFO  method  is the  predominant  accounting  method  used in the
semiconductor  industry.  In accordance with your request,  we have reviewed and
discussed with Company  officials the  circumstances  and business  judgment and
planning upon which the decision to make this change in the method of accounting
was based.

We  have  not  audited  any  financial   statements   of  Microchip   Technology
Incorporated as of any date or for any period  subsequent to March 31, 1997, nor
have we audited the  information set forth in the  aforementioned  Note 1 to the
condensed consolidated financial statements;  accordingly,  we do not express an
opinion concerning the factual information contained therein.

With regard to the aforementioned accounting change, authoritative criteria have
not been established for evaluating the  preferability of one acceptable  method
of accounting over another acceptable method. However, for purposes of Microchip
Technology Incorporated's compliance with the requirements of the Securities and
Exchange Commission, we are furnishing this letter.

Based on our review and  discussion,  with  reliance  on  management's  business
judgment and planning,  we concur that the newly adopted method of accounting is
preferable in the Company's circumstances.

Very truly yours,
/s/ KPMG Peat Marwick LLP