Q: Can you give us an idea of the extent of this diversity?
A: The bulk of our sales is spread across five broad categories. About 35% of our business today is focused on consumer appliances. Microcontrollers are embedded in just about any home appliance that you can name, from garage door openers and toasters, to refrigerators, boilers and washer/dryers. Another 20% of our business is keyed to the automotive industry. We sell to every major automobile manufacturer and supplier around the world.

Q: How many microcontrollers are embedded in a typical car?
A: Over 20. High-end cars may have over 50, and that will increase as more applications are identified. A number of manufacturers will be using our products to facilitate crash sensors in their 2001 models.

Q: What segments account for the remaining 45% of Microchip’s business?
A: Telecommunications, industrial applications and office automation equipment each represent approximately 15% of our business today. The telecom industry uses our chips in cell phones and cell phone accessories, as well as in desktop phones, coin phones and other more traditional equipment.

Q: Can you give us some examples of industrial applications?
A: Gas pumps, industrial air-conditioning systems, process control equipment, to name a few. Millions of people use our microcontrollers in hotels rooms, and never even know it. Our chips are in the hotel door locks, the televisions, the remotes, the on-command movie devices, the telephones, the alarm clocks, the irons, hairdressers and thermostats… the list goes on.

Q: Where are your chips used in the office automation segment?
A: Let’s take PCs as an example. Every PC has one microprocessor, but may have from 12 to14 microcontrollers. They’re in the keyboard, the mouse, the printer, the disk drives, the sound cards and other applications.

Q: Who are the major players in the embedded, field-programmable microcontroller market?
A: By far, the largest presence is Motorola, with about 21% market share. Since 1997, we have been number two, with a 9% share, and expect to increase that lead over our other competitors. A recent survey asked manufacturers whose microcontroller architecture they plan to embed in their future products. We ranked number one. This suggests that the next several years will be very interesting. If you look at just field programmable microcontroller market share, then we are #1 today. It is because the majority of our competitors’ business is non-field programmable (hardwired) microcontrollers.

Q: Where is MicroChip Technology’s advantage?
A: There are a number of factors. First, we’re the only pure play in this market. Embedded microcontrollers are still a small portion of the business of companies like Motorola and Intel. This means that no one has our focus or commitment. Second, we introduced the first successful RISC-based microcontrollers in 1990, which provided substantially greater capabilities at no increase in cost. In this market, we remain the RISC leader.

Q: How do you identify new applications for your microcontrollers?
A: There are times when we can foresee future applications. More often, we work with customers who identify an opportunity. We stay close to customers, and make a great effort to understand their particular needs. There also are applications that take us by surprise. We never envisioned that our chips would be used in remote ignitions for cars in Canada and other cold regions.

Q: Steve, why do you now manufacture over 150 off-the-shelf field programmable chips? Is there a point where you will be creating too much product?
A: If there is, we haven’t reached it yet. Some applications require relatively simple chips. Many applications are extremely complex. Also, the life cycle of one of our microcontrollers generally exceeds seven years, so we do not have constant attrition due to rapid obsolescence.

Q: One final question, Steve. What regions of the world are responsible for your greatest growth?
A: Right now, it’s nearly an even split between the U.S., Europe and Asia. The demand for microcontrollers is truly global and ubiquitous.