Microchip Technology Announces Record Sales and EPS
Microchip Technology Inc. reported results for the three months ended September 30, 2010.
"Microchip acquired Silicon Storage Technology Inc. (SST) on April 8, 2010. At the time of the acquisition the Company determined that it would hold SST’s SuperFlash Memory and RF businesses as assets held for sale, in addition to other businesses that Microchip has sold since the acquisition date," said Steve Sanghi, Microchip’s President and CEO. "After operating the SST business for two quarters, we have found synergies between SST’s RF business and Microchip’s wireless, microcontroller and analog businesses. On the memory side, after divesting the low margin business to PCT in Taiwan in a transaction that was announced in July 2010, we have substantially improved the gross margin for the rest of the SuperFlash Memory business. Additionally, we have found that running some volume on the memory business is critical to proving out the technology before it can be licensed. There are also significant operational synergies with Microchip’s memory business and technology synergies with Microchip’s microcontroller business. Therefore, we have decided to integrate the SuperFlash Memory and RF businesses of SST into the ongoing businesses of Microchip. These businesses added $40.0 million of net sales in the three months ending September 30, 2010, and $76.3 million of net sales in the six months ended September 30, 2010."