Ladies and gentlemen, please stand by. We're about to begin. Good day, everyone, and welcome to this Microchip Technology Fourth Quarter and Fiscal Year 2016 Financial Results Conference Call. As a reminder, today's call is being recorded. At this time I'd like to turn the call over to Mr. Eric Bjornholt, Chief Financial Officer. Please go ahead, sir. J. Eric Bjornholt - Chief Financial Officer & Vice President: Good afternoon, everyone. During the course of this conference call, we'll be making projections and other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions and that actual events or results may differ materially. We refer you to our press releases of today as well as our recent filings with the SEC that identify important risk factors that may impact Microchip's business and results of operations. In attendance with me today are Steve Sanghi, Microchip's Chairman and CEO; and Ganesh Moorthy, Microchip's President and COO. I will comment on our fourth quarter and full fiscal year 2016 financial performance, and Steve and Ganesh will then give their comments on the results, discuss the current business environment as well as our guidance, and provide an update on the integration activities associated with the Atmel and Micrel acquisitions. We will then be available to respond to specific investor and analyst questions. I want to remind you that we're including information in our press release and this conference call on various GAAP and non-GAAP measures. We have posted a full GAAP-to-non-GAAP reconciliation on the investor relations page of our website at www.microchip.com, which we believe you find useful when comparing GAAP and non-GAAP results. I will now go through some of the operating results including net sales, gross margin, and operating…

Yes, sir. Thank you. And we first move to Vivek Arya with Bank of America Merrill Lynch.

Hi. Thank you for allowing me to ask question. This is Shankar on behalf of Vivek. On the Atmel business, can you talk about the growth in the various segments that you have analyzed after you acquired? Which are the segments you think is going to grow and how do you think you're going to position your products along with their products and strategically grow both product lines? J. Eric Bjornholt - Chief Financial Officer & Vice President: It's a little early for all the growth areas. Obviously we're coming up to speed in the different businesses. The investment roadmaps have been what they were. They were focused on 32-bit in touch alone. There wasn't as much on 8-bit. We see that as a potential area of growth for us going forward. There is some growth we believe in security, certainly in the microcontroller – 32-bit microcontroller and wireless areas that they have invested in. It's a little early to give you any specific numbers. We're working on that. We also have to look at how to balance that with investments Microchip has also been making in similar areas. So that's with respect to growth. On the positioning, I think we've very clear ways in, which products have areas of strength that they have developed. On 8-bit the AVR has a strong following a wide base of customers and applications, and so does the PIC microcontrollers. The biggest opportunity on that is going to be how do we take our analog products and create more attach around both company's efforts? Obviously we've been doing that on 8-bit for a long time now doing it for the AVR 8-bit as well. On 32-bit, microprocessors is an area that Atmel had as a strength. We hadn't been doing it. We will take that and run with it, and again, position the rest of our product lines to attach with their microprocessors. We expect on the microcontrollers that are ARM based as well as MIPS-based microcontrollers that will have PIC 32 and SAM 32 products. They each have different uniqueness around them have gone after slightly different markets. In some cases there could be commonality of customers. And so largely, on the microcontrollers, we're not expecting that these big shakeups in the roadmap. And then outside of microcontrollers really the rest of the product lines are reasonably well positioned.

Got it. Just as a follow-up on the synergies from Atmel acquisition could you provide a split-up between how much will come from the COGS side things and OpEx side of things for fiscal 2017 and then maybe in out years will that incrementally be more on the COGS side or the OpEx side? Steve Sanghi - Chairman & Chief Executive Officer: We are not able to break down the synergies in OpEx or the COGS side or revenue growth. We've given combined numbers of the earnings per share accretion for fiscal 2017, 2018, and 2019 and you know a month after the acquisition as we've looked at it we're pretty much confirming that we can achieve those numbers.

Okay. Thank you.

Next question comes from Craig Hettenbach with Morgan Stanley. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Yes, thank you. Just a question on kind of the IoT piece of business, Steve. If you can just touch on you know how you're seeing design activity there and the relative growth of those type of products versus the overall MCU business? Steve Sanghi - Chairman & Chief Executive Officer: Well, our wireless business has been doing quite well for quite some time. And honestly, we're surprised about where Atmel got some of the reputation on being well positioned in IoT. As we looked at it now closer as we own it, the wireless business was less than half of Microchip's business and losing a very large amount of money. So we are dramatically restructuring Atmel's wireless business, combining with our wireless business, and coming up with a combined roadmap – some products from us, some products from them. In fact, just today we closed one of the design centers of their wireless, which was based in Dresden, Germany. But Microchip had a very strong momentum on wireless, and taking some of the good products from Atmel, it will further aid to it. But their wireless business wasn't really cracked up to really what they positioned it with the analysts and investors. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Got it. And then just as my follow-up for a comment on just the current environment. As you mentioned, this is a sort of growth period for you. Any anecdotes you can kind of point you in terms of as you made your way through the inventory correction, whether it's customer behavior or distributors, and how the business is being managed? Steve Sanghi - Chairman & Chief Executive Officer: Are you talking about Microchip's core business or Atmel's business? Craig M. Hettenbach - Morgan Stanley & Co. LLC: Microchip's core. Steve Sanghi - Chairman & Chief Executive Officer: So our business is running normal. We completed the inventory correction back in December quarter. As we reported, the distribution inventory was basically flattish. It was down by two days last quarter. Our internal inventory seems reasonable. So I don't really think there's movement going in either direction. I think the business is really normal. Our business represents the real demand today. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Got it. Thanks.

Next question comes from John Pitzer with Credit Suisse John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): Yeah. Good afternoon, guys. Thanks for letting me ask a question, and thanks for all the detail of the conference call. Steve, I guess my first question is if I adjust for the Mobile Touch business at Atmel, it looks like the June guide is sort of implying flat to down kind of 8%, maybe like down 4% at the midpoint. I'm just kind of curious to what extent do you think this is just a hangover of some of the distribution inventory problems you had versus maybe a portfolio that wasn't as strong as you had originally thought? And I guess, importantly, when do you think you get the core Atmel business back to some level of sequential and year-over-year growth? Steve Sanghi - Chairman & Chief Executive Officer: So, there were probably more than one question in there, but the Mobile Touch business of Atmel that we didn't include is about $14 million a quarter. So if you add it to the midpoint of our guidance that we provided, it's about $250 million. So it's really neither way up or down much. We basically feel that Atmel was in the middle of a very major inventory correction. There was a very, very large amount of distribution inventory as well as the inside inventory. We have seen some of that behavior with sell-in driven companies in our prior acquisitions also, but this one was really over the top. As we announced back on April 4, that – based on a sell-in driven revenue recognition, the revenue was only in the $220 million range. So there was really a massive inventory correction in distribution. If they were standalone then the revenue…

Next question comes from Harlan Sur with JPMorgan.

Good afternoon and nice job on the quarterly execution. Your 16-bit and 32-bit businesses grew double digits sequentially in March. It's pretty solid results in a tough demand environment. I know you say broad-based, but any color, geography or end market-wise, as to the strong growth drivers? I know automotive continues to be an area of strength, but any color you can provide will be appreciated here. Ganesh Moorthy - President & Chief Operating Officer: There's nothing I can point my finger to and say this is what it was. Both businesses are like our overall microcontroller business. They are broad-based, thousands of customers, many, many, many different applications. And that work takes place over the years to establish those new designs. And as any overall improvement environment happens, we see that improvement in our business across a wide range of applications and customers. So nothing specific I can point to.

Okay. Thanks for that. And then I know the team had previously mentioned that China did not fall off a cliff in the March quarter. It's maybe the market (37:02). Is the team expecting the core Microchip China business to grow in the June quarter? Again auto in China appears to be an area of strength. I know you've got broad-based exposure here, but again, any areas in China that you're seeing strength? Is it more just inventory replenishment or do you think that is true demand pull? Steve Sanghi - Chairman & Chief Executive Officer: Well, yes, absolutely. Our June quarter business in China will be up sequentially over the March quarter. We were not able to break down by industry because we just don't roll up the revenue that way. It's broad-based. We are up in direct. We are up in distribution, so it's really fairly broad-based. Our China business will definitely be up in the March quarter.

Great. J. Eric Bjornholt - Chief Financial Officer & Vice President: It's really always up in June following the Chinese New Year funk that happened in the March quarter. So it's just a higher number of shipping days, but the demand environment is fine.

Great. Thanks for the insights. Steve Sanghi - Chairman & Chief Executive Officer: Welcome.

Next question comes from Craig Ellis with B. Riley. Craig A. Ellis - B. Riley & Co. LLC: Yeah. Thanks for taking the question, and congratulations on the nice job in the quarter. Steve, I wanted to start off with a higher-level question. The team has had four weeks to be on the inside of the Atmel business. Could you summarize for us what your biggest takeaways are now that you're on the inside looking at that business versus what you thought you were getting when you closed the deal a month ago? Steve Sanghi - Chairman & Chief Executive Officer: That's a thoughtful question and probably requires a thoughtful answer. I think if you take it from the high level, in consolidation of any industry, there are companies at the bottom that have been underperforming for years. They are being forced by either their boards or the activists investors to seek strategic alternatives, which is another word for basically selling the company. Such consolidation is now taking place in the semiconductor industry, and we have been kind of one of the consolidators. Microchip has purchased a number of companies that were all underperforming, and in each of these companies we found some negative surprises after we bought the companies. But Microchip has systematically transformed the companies that we have bought into highly profitable enterprises performing in the Microchip business model. I've given you examples of SMSC, Micrel, and Supertex before. And we believe that we'll be able to do the same with Atmel. We have competed Atmel for years. What we knew of Atmel from outside was that they have very good products and technology. And a month after we have purchased them we've confirmed that many of Atmel's product and technologies are good, and they fit very well…

And we next move to Chris Danely with Citigroup.

Hey, thanks, Steve. I was going to ask a lot of questions but your response to the last prompted to me ask this one. So with Atmel's culture being pretty screwed up, A, have you had an acquired company that's been this bad? And, B, if you could share any anecdotes, and then perhaps talk to us about how long you think it will take get things in line there? Steve Sanghi - Chairman & Chief Executive Officer: Well, I think I kind of have been on record that this is probably the worst performing company I bought, and the size and scale of it kind of makes it that much more challenging. But we've a deep experience inside of Microchip. The people we have prepared and battle-hardened to do these integrations over many, many different acquisitions. Remember, we have done acquisition in memory, which was SST. We've done acquisitions in wireless before. We have done acquisitions in logic businesses like SMSC. We have acquired manufacturing assets before where we bought one of the test plant MMT. We bought a fab plant in Oregon. So across our diverse management structure, we have deep expertise in integrating acquired companies across many, many disciplines. And the entire – that trained and battle-hardened management team of Microchip is really at work at Atmel where essentially all but one or so of the divisions are today – business units are being led by a Microchip executive, and we're basically making the operational changes, the cultural changes, the teamwork changes. We have set up meetings already where operations and business units are in a common meeting, figuring out what the demand is, what we should build. Those things were not connected. Basically, business units throw a demand over the wall and the manufacturing group will…

Great. Thanks, guys.

Next question comes from Rajvindra Gill with Needham & Company. Rajvindra S. Gill - Needham & Co. LLC: Yes. Thanks for taking my questions and congratulations as well. This is a question with respect to Atmel's growth rate, and I think you touched upon it a little bit. But just want to get some more clarity. If you look at Atmel's revenue in 2015, it declined about 17% year-on-year, roughly. Now, there were a lot of one-time items that were contributing to that fall you've calculated. But I wanted to get a sense of kind of how you're looking at Atmel's three-year or long-term growth rate, putting aside some of the one-time events that occurred in 2015 and given the fact that two thirds of Atmel's revenue is really microcontrollers and your strategy of really kind of focusing on the two-thirds of the business. How do we look at kind of Atmel's longer-term growth rate? Steve Sanghi - Chairman & Chief Executive Officer: Well, I think any answer we give either would mean nothing, or you won't believe it. So one month after this, when I'm ready to talk about what happens to Atmel's revenue three years from now? What we're seeing is that there was a very, very large shipments into distribution where distribution inventory was out of sight and when you then measure revenue by selling the revenue had a steep fall off in the later quarters, which is what you're counting in a significant revenue drop of Atmel in 2015, and I'm not disagreeing that the revenue was down 17%, 17.5%. From the number that we're guiding you today we see this number to be the starting point of stabilization in Atmel's revenue. There is some more distribution inventory correction to go through, so the second half…

The next question comes from Kevin Cassidy with Stifel. Kevin Cassidy - Stifel, Nicolaus & Co., Inc.: Hi. Thanks for taking my question. I just want to talk about the CapEx, your plans. It seems it's extremely low as a percentage of revenue. Is that just good timing or you expect that to expand in coming years or – and what is the CapEx (54:26) Steve Sanghi - Chairman & Chief Executive Officer: I guess I'd say we have the factory footprint that we need and we'll make incremental investments in the business as required. You'll probably recall that for Microchip's core business that we've pretty high CapEx in the first two quarters of last fiscal year, and with that we put some capacity in place that really isn't being utilized today. So we've got some capacity to grow into on that front. We still have a lot of work to do in determining how backend integration is going to work for Atmel. We've got some placeholders for that, but we think a $140 million is a good placeholder for the current fiscal year, and as we learn more about future investment needs we can update you on that. Steve Sanghi - Chairman & Chief Executive Officer: And Atmel revenue is down much more substantially. I mean our revenue is close to – it was record last quarter, but Atmel's revenue is down significantly from its higher numbers before. Earlier caller mentioned that 17% drop last year. So there is substantial space in their factories. So therefore, I think the capital investment should be relatively limited for growing the revenue going forward. Kevin Cassidy - Stifel, Nicolaus & Co., Inc.: Okay, great. Thank you.

Next question comes from Mark Delaney with Goldman Sachs. Mark Delaney - Goldman Sachs & Co.: Yes. Good afternoon and thanks very much for taking the question. I was hoping I could better understand some of the dynamics around the Atmel revenue. And there was some discussion in some of the online publications around some of the larger customers potentially taking business away from Atmel post merger. And I was hoping you could clarify if any of the decline in Atmel's revenue is some of these larger customers may be taking business elsewhere. Steve Sanghi - Chairman & Chief Executive Officer: So I think I mentioned that Atmel had a very, very poor pricing discipline. So we have found businesses in Atmel, particular line items to particular customers, that were at negative gross margins where you're wrapping money around every part that you're shipping, and some of that happening even on non-commodity products, even microcontrollers. I mean, why would you do that? So I think as we try to correct those things – I put the brand in three different categories, three different positioning, and let me take that angle from a marketing standpoint. A company has a brand position which is really what do the customers think of the company. Then a company has a product position, positioning where – what does the customer think of the company's products. And then the third, a company has a pricing position where what do the customers think of the value the company provides to the customers on its products. So positioning is important three different ways: brand positioning, product positioning, and pricing positioning. When I look at Microchip, I find us very strong in all three. We have a good brand reputation, we have a good product positioning, and we have…

Next question comes from Gil Alexandre with Darfil Associates (01:01:31).

My question has been answered. Thank you very much. Steve Sanghi - Chairman & Chief Executive Officer: Thank you.

Next question comes from Mark Lipacis with Jefferies.

Thanks for taking my question. The first one is a clarification I think. If I wanted to compare like apples-to-apples on revenues going forward, the Touch business comes out of the top line. Did you say this 32-bit PIC business comes out of the top line and the Atmel Wireless comes out of the top line going forward? And then aggregate about – could you share with us what that was in the previous quarter? Steve Sanghi - Chairman & Chief Executive Officer: Mark, I don't know how you got all that. The only thing that comes out of the top line is the mobile piece of the Touch business. We're dividing the Touch business into two portions, the automotive and industrial on one side, which we're keeping, and the Mobile Touch on the other side, which we're not keeping, which last quarter was $7 million on sell-in, about $14 million on sell-through. That's the only thing that's coming out. Nothing else is coming from the top line. I don't know how you got wireless. J. Eric Bjornholt - Chief Financial Officer & Vice President: So the PIC microprocessor that Ganesh mentioned earlier, that was a project that was in development at Microchip. That was not producing revenue.

Okay. Steve Sanghi - Chairman & Chief Executive Officer: Yeah, so it was a brand-new initiative at Microchip. In addition to our 32-bit PIC microcontroller line we were going to develop a PIC microprocessor line, which is with their higher end cores, they don't have Flash, it goes in a different market, they use Linux operating systems. It was a very, very large investment, and Atmel has already made that investment and had significant revenue on it. So we're not going to make those investments on our sides. But there was zero revenue. There was not even a revenue on it in the next year. And then nothing comes out of the wireless. Atmel ran a very, very small wireless business out of seven different design centers and we closed one of them, which was in Germany, in a very high cost region.

Okay, that's helpful. Steve Sanghi - Chairman & Chief Executive Officer: And we continue to sell those products and market those products. There was a very small revenue coming out of that center. So there's nothing else; it's only the Mobile Touch.

Understood that. Thanks for clarifying. And then I imagine there will be a restructuring charge in the June quarter. Is there a way to estimate that or give us a sense to how big that might be? Steve Sanghi - Chairman & Chief Executive Officer: We don't have it. We are not giving to give you a number and then want to be limited in any way to really live to that number. So restructuring charge will be whatever it will be.

Fair enough. Thank you.

And with no further questions in queue, I'd like to turn the conference back over to the management for closing remarks. Steve Sanghi - Chairman & Chief Executive Officer: Okay. We thank everyone for attending the call and asking some nice questions. We'll see some of you on the road. There are some conferences coming up. I'll personally be at the JPMorgan conference in Boston, and Eric, you will be... J. Eric Bjornholt - Chief Financial Officer & Vice President: So we're going to have to revisit the schedule but we're at another conference in early June. Steve Sanghi - Chairman & Chief Executive Officer: With that, thank you very much.

And ladies and gentlemen, that does conclude today's conference. We do thank you for your participation. You may now disconnect. Have a great rest of your day.