Please stand by, we're about to begin. Good day, everyone, and welcome to the Microchip Technology Fourth Quarter and Fiscal Year 2017 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 Microchip's Chief Financial Officer, Mr. Eric Bjornholt. Please go ahead, sir.

Good afternoon, everyone. During the course of this conference call, we will 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 release as 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 2017 financial performance, and Steve and Ganesh will then give their comments on the results and discuss the current business environment as well as our guidance. We will then be available to respond to specific investor and analyst questions. I want to remind you that we are 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 will 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 expenses. I will be referring to these results on a non-GAAP basis prior to the effects of share-based compensation and our acquisition activity. Non-GAAP net sales in the March quarter were a record $902.7 million, near the high end of our guidance and up 2.4% sequentially from net sales of $881.2 million in the immediately preceding quarter. We have posted a summary of our revenue by product line and geography on our website for your reference.…

Thank you, Eric, and good afternoon, everyone. We are very pleased with how our strategic product lines performed in the March quarter and how the combined assets of Microchip and former Atmel working in harmony continue produce differential growth results. Let's take a closer look at the performance of each of our product lines, starting with microcontrollers. Our microcontroller products performed strongly in the March quarter, with revenue being up 4.4% sequentially as compared to the December quarter, setting a new record in the process. We continue to experience broad-based growth in our business, as each of our 8-bit, 16-bit and 32-bit microcontroller product lines met or exceeded our expectations for the March quarter. Microcontrollers at over $2.3 billion in annualized revenue represented 64.3% of Microchip's overall revenue in the March quarter. We remain pleased with the performance and competitiveness of our overall 8-bit, 16-bit and 32-bit microcontroller portfolio in the broad-based market. Clients using microcontrollers that originated from Atmel heritage continue to gain confidence in Microchip's commitment to these products. As a result, we are seeing more designs that were in the pipeline which are going into production and ramping in volume, as well as continued growth in our design-in funnel, which we expect will drive future growth as these designs progress into production over time. Last month, Gartner Dataquest released their microcontroller market share report for calendar 2016. We are pleased to report that Microchip retained the number-one position for 8-bit microcontrollers and once again gained market share in calendar 2016. In the 16-bit microcontroller market, we continue to gain market share as we were the fastest-growing franchise among the top players and we remained in the number-five position. In the 32-bit microcontroller market, we gained significant market share again and climbed from the eleventh to the sixth…

Thank you, Ganesh, and good afternoon, everyone. Today I would like to first comment on the results of the fiscal fourth quarter of 2017 and total fiscal year 2017. I will then provide guidance for the fiscal first quarter of 2018. Our March quarter financial results were very strong. Our non-GAAP net sales were a record and near the high end of our revised guidance. Our non-GAAP gross margin percentage, operating profit percentage and earnings per share each exceeded well beyond the high end of our guidance. In non-GAAP earnings per share, we blew the top off, with a record earnings per share and up $0.10 above the mid-point of our guidance. Non-GAAP earnings per share were up 64.7% from the March quarter of a year ago, due to improving sales, gross margin percentage, operating expense leverage and successful execution of our core business, as well as accretion from our acquisitions. I want to thank all the employees of Microchip, including acquired employees from various acquisitions worldwide, for delivering a record quarter in every respect. This was also our 106th consecutive profitable quarter. As I reflect on fiscal year 2017, we had outstanding financial results in every quarter. And closing out the fiscal year with record sales and earnings per share was a befitting tribute to the fiscal year in which we repeatedly hit the ball out of the ballpark. Now let me decipher the financial results of Microchip from the fiscal fourth quarter. We achieved a new all-time high gross margin and operating margin percentage in our core Microchip business, excluding Atmel, substantially exceeding any prior records. On Atmel, the gross margin improved by another 235 basis points sequentially and Atmel's operating margin achieved another all-time record, exceeding 30% for the very first time. We achieved an accretion from…

In order to accommodate as many callers as we can, we ask that you ask one question and one follow-up, you may then reenter the queue and we'll take as many questions as time permits. We'll take our first question from John Pitzer with Credit Suisse. John William Pitzer - Credit Suisse Securities (USA) LLC: Yeah. Good afternoon, guys. Thanks for let me ask the questions and congratulations on the strong results. I guess, Steve, can you help me understand a little bit relative to you increasing CapEx, increasing wafer starts, when do you think you'll be able to catch up with the demand curve here in the near term? And I guess you said in the press release that there's a considerable amount of demand that you can't meet right now. Any way that you can help us quantify what you're leaving on the table in the near term?

So in terms of CapEx, the majority of CapEx that we're adding is in the back end. As I mentioned, Atmel's test technology was about a decade behind. And we're converting many of Atmel's high-volume products to Microchip's assembly test technology. The challenge with that is that the easiest way to add quickly incremental capacity is to buy up more of what they have, more of what we have in Atmel, same test systems, same capacity. But that is very, very inefficient. And if we buy more of that, we get stuck with it for five to seven years in a high-cost structure. So we're trying to buy more efficient capacity, Microchip type, which then requires the writing the test programs, converting them to Microchip's test technology, correlating and doing all that, which takes a little longer. So it's a very fine juggling exercise to reasonably able to satisfy the customers and not have lines down and yet keep a steady march towards converting those products to a very low-cost technology, which is giving gross margin improvements and all that. So driven by all that, there is significant constraint. We are unable to dollarize the constraint for you today because it changes every day. We don't know where we will end up at the end of the quarter. We know the number where we ended up last quarter, but I think we're less comfortable in sharing it. I did want to say one other thing, John. After our last earnings call, I saw in your report where you said we see Microchip entering uncharted levels of operational efficiencies and leverage, which should support long-term operating margin of 40%. You were right on. John William Pitzer - Credit Suisse Securities (USA) LLC: I get lucky every once in a while.

You're were, well, either good or lucky. Probably good. It seems that you were right on. You saw something that we saw too, but we were not ready to commit yet and not ready to guide to a 40% operating margin target yet. And we are now and we have guided as such. John William Pitzer - Credit Suisse Securities (USA) LLC: Well, see, maybe that's good lead into my second question. Clearly the scale you've amassed is giving you leverage on the operating line. I'm curious as to what benefits you might be able to see on the top line from your scale, just given that the markets you've played in have been pretty diverse. I guess are we seeing a trend where customers want to deal with fewer suppliers who can do more, and do you think that that's a long-term sort of advantage for you to perhaps gain share at a faster clip than you historically have?

So I think I would say, in our commentary, we have been very careful to not describe the market environment to be anything other than for our products. If you re-listen to what I said, I used it twice, the market environment for our products. We didn't really make any commentary on general market environment. You could talk to everybody else. That's kind of your job to figure out the general market environment. We described it for our products. So baked in in that environment is also tremendous leverage that we are getting attaching the vast portfolio of our analog products, memory products, to Wi-Fi products, to Bluetooth and others, along with various microcontroller and other products we have. Now, we have sort of 19 different product lines within Microchip today and we're getting enormous leverage in what you call attach in the past, and we have given it a new term at Microchip; we call it Total System Solutions. So, if you look at the number of devices per board that we had, let's say, five years ago, it's dramatically increasing in terms of number of devices we have per customer board today. I can't give you the number. But that is accelerating and, therefore, somewhat we're creating our own environment. There is a tremendous organic growth we have seen in our business in the last year. And if you just recall a year ago, there were organic growth concerns. And at the same time, we have added some acquisitions. So if you just look at the March quarter, we beat the earnings by $0.10. $0.05 came from higher Atmel accretion and other $0.05 came from core Microchip. So it's not one or the other. We are really just accelerating on both fronts. John William Pitzer - Credit Suisse Securities (USA) LLC: Perfect. Thanks, guys. And congratulations.

We'll go next to Craig Hettenbach with Morgan Stanley. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Thanks. Steve, with John's successful run at 40 percentile, I'll promise not to raise the bar to 45% op margins. But if we can talk about just that attach rate as a follow-up, particularly for wireless connectivity, what you're seeing for MCU with wireless attach and the momentum in that market.

We have many, many embedded systems adding connectivity to them. Certainly, wireless is a big component of that, but we also have wired connectivity in many systems. And our portfolio of connectivity is extremely rich at this point between successive acquisitions that have added to our portfolio. So embedded systems in general are becoming more valuable when they're attached. We're finding lots of opportunities for Ethernet, Wi-Fi, Bluetooth, LoRa, a number of other proprietary standards, to help these systems connect to whatever is appropriate in their environment. And it is a part of the growth that we're experiencing. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Got it. And then as my follow-up, can you talk about 32-bit, and I know you guys have the MIPS as well as the Atmel ARM core and I know there is more focus on the peripherals than the core. But just wanted to get a sense now that you're a year into Atmel, just some of the design win and product momentum that you're seeing in the marketplace for 32-bit ARM?

So we don't think of it as 32-bit ARM alone. We look at overall 32-bit business. The 32-bit product line has been growing faster than Microchip average growth that we've had. We have fully incorporated the products that came to us from Atmel, what we call the SAM products, and the products historical for Microchip, the PIC32, into our integrated roadmaps as we present it out into our customer base when we pursue new designs. And they're doing very well. And we see strengths in the portfolio that we inherited from Atmel that have taken us to new areas, not only in microcontrollers. We've also got microprocessors that were part of the portfolio. And then we have some strengths from classic microchip that continue on their efforts. And the forward-going portfolio has a single roadmap. We've brought that all together. And we're very, very confident in the 32-bit product line and its growth under the Microchip cloud (35:30). Craig M. Hettenbach - Morgan Stanley & Co. LLC: Okay. Thanks, Ganesh.

We'll take our next question from Mark Delaney with Goldman Sachs. Mark Delaney - Goldman Sachs & Co.: Yes. Good afternoon. Congratulations on the strong results and thanks very much for taking the question. I was wondering if you could talk a little bit about how you're thinking about capital allocation going forward, especially now that you've done better than you had anticipated on the leverage levels coming down. How should we think about the company's interest in engaging an additional M&A? And what are your thoughts around doing share repurchases?

So, I think it's quite simple. There are three uses of capital. There can be three different uses: using it in our own business in making investments, giving it as a dividend or using it as M&A, and you can call it maybe, fourth, stock buyback. We're getting extreme leverage on the operating expense side in our business. And it does not seem like we will have a need to go outside of our P&L model to make really a lot of OpEx or any kind of investments. In terms of CapEx, even the number we guided for the year is really a small portion of the overall yearly revenue, even though the Q1 is high, a little bit front-end loaded, largely because of slip of capital from last quarter. In terms of dividend, our dividend strategy does not change. The board is committed to continue with the dividend we have and a very, very small minuscule increase every quarter. There is no desire to really do anything different. And as far as stock buyback is concerned, we do not regularly buy back stock. We've only bought it at extreme occasions. Last time we bought stock was when we had to issue some stock in the Micrel acquisition and we wanted it to be a cash transaction, so we bought the stock back. So that really leaves M&A. Atmel acquisition now was about a year ago. It's largely consolidated. But as I mentioned, a lot of the back-end and other challenges still remain. We're still trying to convert their test technology, assembly technology, to ours, which will take some time. So if a reasonable acquisition falls in our plate, we're willing to execute it. But the valuations are fairly high right now and there is really nothing imminent that we have on our plate. Mark Delaney - Goldman Sachs & Co.: That's helpful. And then for a follow-up question I was just hoping you could help us understand what steps we should think about in terms of bridging from the company's margin levels today toward the targets. You talk a lot about the changes to Atmel's back-end operations and some potential additional leverage as you go forward. Are those the two things that get the company to its target margin ranges? Or are there other things that we should have in mind that the company would execute on to get to those levels?

Well, it's a little broader than that. We are seeing tremendous gains in reduction in wafer process essentially (38:51), both by increasing loadings in all of our three fabs as well as being able to cross-pollinate and use ours as well as Atmel technology for each of those products, whichever the best solution may be. They were good in certain things; we were good in certain things. Certain products will be cheaper here; certain products will be cheaper there. So we're getting a significant leverage out of fabs. And then, as you mentioned, we're getting significant leverage out of assembly and test technology. And overall we're getting a lot of operating expense leverage, a lot of other manufacturing leverage also out of the same footprint in our facilities and all that just pumping a tremendous amount of output. Recall that Atmel did no assembly themselves; they were zero percent assembly and they only did 10% of the tests themselves. Microchip, on the other hand, did nearly 90% of our tests ourselves and we did about 70% of our assembly ourselves. So two companies combined together now, both assembly and test percentages done in-house have dramatically gone down because of Atmel. And as we bring those things from subcontractors to inside and in the process also increase the utilization and increase the output by 5x to 10x per system per day, the results are tremendous. They're just beyond what we could have expected and beyond the leverage that we could reasonably describe. And I must say that this detail level of due diligence was not available to us. Very poor due diligence was shared. It's because we were ahead on competitors and all that. So a lot of this area we have really done it on our own clock, identify the areas where we could bring significant cost reduction. And we are basically in the process of implementing the first high-volume products on microcontrollers and memories and a few other products are already flowing out of our manufacturing facility. So this is not a pipe dream. We have delivered the front-end of that already.

I would add pricing discipline as the other element that we're proud of (41:20) over the last year to help improve the overall gross margins.

Maybe one other thing to add is that there's still benefits from the shutdown of the Micrel fab that aren't seeing recognized in the P&L we've today. So still a lot of things we're working on together. The things that Steve is talking about Atmel, that's a couple year project. So we've got a lot of headroom and things to work on over the coming quarters. Mark Delaney - Goldman Sachs & Co.: Thank you very much.

We'll take our next question from Chris Danely with Citi.

Hey. Thanks, guys. First question is just on the lead time extensions. I know you have several different products with several different lead times. But if you could, is there any way to quantify the amount of the lead time extensions? And then, Steve, when was the last time you saw this type of lead time extensions? And then do you think you'll be able to catch up the demand over the summer. Or do you think they can get worse?

It's not getting worse. Unlike what some of the people on the Street think, the letter has not accelerated the bookings in any way. It didn't accelerate the bookings last time. It didn't accelerate the bookings this time. The letter was posted on April 4, and we received these tremendous bookings in the March quarter with a book-to-bill of 1.1. And it did not change afterward. Our customers are fairly trained on they expect that – we written this letter about 10 times probably in the last 20 years or so. It's results were less than optimal one time a couple of years ago, which, soon after that, the China market fell apart. And, as a result, we had a miss. And many times, the Street just remembers what happened last time. So these letters have been very effective in informing our large 115,000-plus customers regarding what is happening and then working with them to understand the requirements, being able to build the product in a better mix to understand people's drop-dead requirements so people don't go lines down. So I can't give you one number across the range of our products, 100,000-plus SKUs. People kind of like to look at one number what the lead time is, and there's no such number. On a given product, lead time could be eight weeks today, and you get one large order and the lead time goes to 12 weeks because the parts which were after the eight weeks are now booked. On the other hand, there are plenty of products available on the shelf. So the lead time can be anywhere from in-stock to 16 weeks, I would say. All over the place.

Okay.

And we're working hard to try to get the delinquencies all down by the September quarter timeframe. It all depends on what happens in terms of the bookings on a continuing basis. But that's what all the firepower in the company is aimed towards.

Okay. Great. You mean, Steve, just going to sit in the office and call 115,000 customers and tell them that the lead times are extending?

That's what the letter's for.

So my next question is just some clarifications on the margins. In terms of the new targets, is that like half from Atmel and half from the legacy Microchip? And then just in terms of the all this accretion and upside you've seen on Atmel's operating margins, can you break out how much is COGS versus your operating expenditures?

Well, Atmel's both gross and operating margins still remain well behind Microchip's. And as I mentioned, Atmel's operating margin, we got it over 30% and gross margin was up another 235 points. Despite those numbers, they're still substantially behind Microchip's. And we've always said, based on the large amount of mix they've taken before, we never expect that to make 40% operating margin, which really means core goes above and Atmel is below and we bracket an average to about 40%. So the improvement will really come from both. As we are ramping our fabs, it's lowering wafer cost and helping both gross margin. As we are bringing Atmel's assembly test technology to Microchip's level, the help of that transition to our technology is helping Atmel gross margin, but it's bringing much more output into our factories from outside, which then is also increasing core gross margins.

Spreading the overhead over a larger base.

Spreading the overhead over a larger base, allowing us to buy more volume of lead frames to packages to molding compounds to everything else in a larger supply with better economics and all that.

Got it. Thanks, guys.

We'll go next to William Stein with SunTrust.

Thanks for taking my question. And I'll add my congrats as well. I'd like to ask about the characterization of this cycle, Steve, as you've done in the past. Clearly, we're heading into a time of a bit of tightness, a bit of this imbalance between supply and demand. How much of what you're seeing is more related to lack of capacity in the Atmel product versus accelerating demand? And do you anticipate we'll continue to see improving year-over-year growth beyond the June timeframe, which is I think the sort of consensus view at least among sell-side analysts?

Again, I will refrain from making any general remarks about the industry and largely focusing on how I see the business environment for our products. A significant impact of what we are seeing is really driven by the success of our own products in the market and the total (47:51) that I earlier talked about. Number one, there was a significant reluctance on the part of the customers during the year that Atmel was up for sale, regarding what would happen to those products, what would be supported and would not be supported. And if you, as a customer, have a concern, then you kind of always have a back-up plan in case those products were not to be available. When it became clear that Microchip would buy Atmel, customers were more even disheartened originally thinking that Microchip being a staunch competitor may discontinue AVR and ARM-based products and others. What we did was just the opposite. And as Ganesh mentioned in his commentary, the result of all that has been a tremendous amount of customer confidence that we have gained in our strategy, in what we are doing. And we're getting unfair share of the design wins and customers' ear. and then analog and Wi-Fi and memory and other attach to boot. So a large portion is really driven by that. There are always small numbers that can really drive a significant change. Beyond that, we're also seeing general strength in the economy, especially happened post-election in U.S. The whole world seems to be positive. You can talk to distributors and they are seeing strong bookings and a strong environment. Lead time for equipment is lengthening, lead time for packages, all sorts of things is lengthening. So those are some of the signs of what's happening generally in the economy. But I think what we are seeing has really also a significant company-specific element on the top of that.

Thanks for that. And one follow-up, if I can. Eric, I think more your area of expertise. I think there is a FASB pronouncement that's going to require you to transition to a sell-in rev rec. Can you confirm that that's correct and, if so, the timing and anticipated impact on your reported financials?

Yeah, so that change will be effective for Microchip April 1, 2018, so the beginning of our next fiscal year. We are going through the planning process associated with that. I guess what should be important from an investor standpoint is we are not going to change in any way our go-to-market strategy with our distributors, the way that we price our products, the way that we interact with them. But the reporting will have to be on a sell-in basis, where essentially you're making an estimation of what the net sales price of the product that you're shipping in is going to be. So our accounting team is working through that and will be effective for us next year.

Thanks. And congrats again.

We'll take our next question from Harlan Sur with JPMorgan.

Congratulations on the solid results execution and the outlook. As we think about growth and as it relates to Atmel's design win pipeline, I know you guys recently refreshed Atmel's AVR 8-bit product line. I think you guys even embedded some of your own IP into this particular product line. I know you guys do a good job of keeping track of design win rates. So, wondering if you've seen a step-up in design wins or feedback from customers for the new AVR 8-bit products?

It just depends on what timeframe you compare against. So, we have been at it for a year since we bought the company. And the funnel size is enormous. We're seeing substantial growth and the total funnel size on Microchip across 8-bit, 16-bit, 32-bit, Wi-Fi, our networking business, our automotive business, infotainment, MOST business, that the funnel size across Microchip is just enormous. I think we are incredibly and beautifully set up to really deliver what we are telling you.

Thanks for the insights there. And then, on the analog side, you guys are basically within striking distance of $1 billion in annualized sales. I think last I asked this question, about 50% of these products are tied to your MCU programs and the other 50% is sold kind of standalone on their own performance merits. Is that still the right mix? Or are you getting more attraction on a standalone basis? And then maybe any updates on your analog attach rates to Atmel's MCUs.

Well, we don't really look at the analog business to be either attaching to our microcontrollers or standalone. We want to succeed in both. If we had a very high attach rate but never won anything standalone, that, to us, would be negative because that really means we can only win when it's our microcontroller. That's not the case. Even if we don't win the microcontroller, and it's a microcontroller from Freescale, Renesas, NXP, or anybody, or maybe the socket doesn't have a microcontroller, it is driven off a microprocessor or a FPGA or some sort of SoC, we still want to be able to win analog in those sockets, rather it's a – for power management or convertors or have some Wi-Fi on it or have some supervisory op amps or some other things. So right now I think as we look across, we have victory in every area. We are winning around our microcontroller, we're winning around Atmel's microcontroller and we're winning around other people's microcontrollers, SoC, FPGA, processors, et cetera, and there is no specific focus to be one way or the other. We actually have identified a built-in large opportunity to attach analog around Atmel's microcontrollers because those were the sockets we were purposely kept out. Any of the reference designs that Atmel produced before, by design they would put anybody else in it but Microchip. In the last one year, all those reference designs, tools, development tools, et cetera, they've all been refurbished to replace anybody's analog and Wi-Fi with Microchip's. So there you have incremental additive analog that we should be able to attach. And we are.

Thanks for the insight, Steve.

For our next question, we'll go to Rajvindra Gill with Needham & Company. Robert Mertens - Needham & Co. LLC: Hi. This is Robert Mertens on behalf of Rajvindra. Thanks for taking my question and congrats on the quarter. You broke out the revenue breakdown by end market. You had about 25% in the automotive end market and you mentioned that this was around the eighth largest semi supplier. Do you have any visibility towards what areas of automotive you're seeing your products go into, if there's strength in infotainment versus ADAS or power management? Or any granularity there would be great. Thank you.

We are in a broad range of applications, but we have some specific ones we have a larger exposure to – so you mentioned infotainment. But I'd broaden that to networking inside the car as one area. We are in many access control applications in the car. We are in touch control for a range of both touch screen and touch buttons and things. We're in many USB connectivity inside the car. We're in all the garage door openers inside the car. So it's a pretty broad set of applications and with some specific areas in which we have a much higher penetration than even normal.

I think we have 51 chips in a Mercedes S-Class car, 55 in a Hyundai Genesis. It's everywhere, up and down the car. So, it's much more broader than anybody can describe. Robert Mertens - Needham & Co. LLC: Okay. And then in terms of I guess products going from the high end S-class to Hyundai Genesis and going more mid-market, are you seeing that be a trend that's taking off now or still a quarter or so out?

Well, those trends don't happen in a quarter. If you look at the keyless entry, where you don't need the mechanical key anymore, began nearly 20 years ago from General Motor (sic) [General Motors] cars. I think we put the first keyless entry where you don't have to use a mechanical key to open the car. We did the first hotel room door lock years ago. Before that, there used to be mechanical keys that even opened the hotel room door lock. And as you have seen over the years, people don't even know there's a mechanical key exists for hotel rooms or cars and stuff like that. So these changes are a lot slower, happen over time. These are not one quarter phenomena. There are 400 different car models that have the HomeLink on it, all-exclusive product of Microchip. There are many hundreds of models that have our MOST bus. There are a large number of models that have our touch in it, and so on and so forth. They all start at the high level and, every year in the following model year, the company will take it down to the middle-range models. And a few years from now, it could get to the lower-end models. Feature-by-feature they migrate down, but the trend doesn't change as much quarter-to-quarter.

I think the way to think about it is we have a high presence in all car segments; it's not just at the high end that we are present. That was just an example to show you in a rich environment of electronics, we have a pretty high percentage. But if you look at the lower-end cars, we have just as high a percentage in many of those cars. Robert Mertens - Needham & Co. LLC: Okay. That's very helpful. Thank you.

We'll go now to Christopher Rolland with Susquehanna Financial Group.

Hi, guys. This is Liz Pate in for Chris Rolland. Most of my questions have been asked and answered. But just a quick one on the pricing environment. Maybe you can talk about how that is currently industry-wide, and specifically on the Atmel products. Do you still have some ability to raise prices on those products? And thanks.

So we've been talking about it for multiple quarters. It's taken us time to implement the price changes across a broad range of customers. Some of them have been phased-in over time so that they don't all come together in one quarter. But I would say, at this point in time, a substantial portion of the price increases that we've began last June or so are in place. And as we go in – going forward, it's really no programmed increases in prices. What we have done is also put in a significant discipline on new designs, because what we were doing with the price increases was correcting past issues where pricing was done poorly. And those new designs are all being done using a more disciplined process to make sure that we don't have to come back and change the pricing out in time. But pricing for our market tends to be something that it happens at the point of a design-in, and so that's when the competition for what the best performance price-value equation is. And then that happens a year or two before designs usually go into production and there isn't as much pricing discussion that takes place once the designs have been completed and production is getting started.

Okay. Thanks.

I want to add, though, that to extend what Ganesh said, that as all the new quotes we are making, really in the last year, have all substantially better disciplined pricing than the average pricing we are having on Atmel parts today, as these designs are going to production, it has been about a year now. So designs are starting to go to production on those things that we quoted on our clock. There will be a steady stream of wind on the back where every quarter the mix gets richer and richer with higher and higher percentage of pricing to be better disciplined pricing coming from Microchip and smaller and smaller percentage of older devices on which we raised the price, but we couldn't raise it all the way to where the new prices are. So this would be a long-term tailwind that will continue to blow in the back.

Perfect. Thanks. And congrats on the quarter.

Thanks.

We'll go now to Craig Ellis with B. Riley. Craig A. Ellis - B. Riley & Co. LLC: Thank you for taking the question and congratulations on your execution. The first question is a gross margin question maybe most appropriate for Eric. I believe the company was expecting to see the benefit of the Micrel San Jose fab shutdown in the first part of the calendar quarter. Is that in fact happening? And, if so, is it more in the calendar first quarter, calendar second quarter or more evenly distributed?

So I would say the benefits from the Micrel shutdown have been coming over time. We still probably have a couple of quarters to go as we sell through all the older inventory and all the 8-inch inventory starts to be realized in the cost of sales. So we have got benefits from that the last two quarters, but expect that to continue on in the June and September quarters also. Craig A. Ellis - B. Riley & Co. LLC: Thanks, Eric. And then the follow-up question is for Steve. And, Steve, it goes back to a comment that I think you made a few calls ago, when you indicated that, if industry were to grow, I think the number was high-single digits or 10%, I don't recall specifically, that that would favor vertically integrated manufacturers. So my question is this. With demand strong, with the global economy showing signs of improvement and with what appears to have been a five-year period of fairly disappointing analog CapEx, are you seeing signs in your business where the environment is favoring a vertically integrated manufacturer, like Microchip? And, if not, do you think that will occur later this year, or is that something that would be further into the future? Thank you.

Well, I think it is happening already. You are seeing it on our results and you will see it in our results in the coming quarters also. If Atmel was a standalone company today, they wouldn't be able to take advantage of these tremendous improvements we're making on assembly test technology inside capacity being able to bring large volumes on our test technology already running in our Thailand facility producing 5x higher output per system. Subcontractors have no incentive to give you that kind of output. They get paid by the hour on the test system. So if you dramatically improve output and output goes up 5x and now you only have to pay them for 20% of the hours, they're not happy. So there the incentives are not aligned properly. You're seeing tremendous benefit of our vertical manufacturing, both from fab, probe, assembly and tests already and you will continue to see it as we go forward. Craig A. Ellis - B. Riley & Co. LLC: Very helpful. Thank you.

That does conclude today's question and answer session. At this time, I'll turn the conference back to Mr. Steve Sanghi for any final remarks.

Well, thank you, everybody. We are pleased to deliver an outstanding quarter and an outstanding fiscal year. And watch us grow, hopefully we can deliver another one. And we'll see some of you at the conferences we will go to later this quarter. Thank you.

This does conclude today's conference. Thank you for your participation. You may now disconnect.