Microchip Technology Inc. (NASDAQ:MCHP) Q4 2020 Earnings Conference Call - Final Transcript

Mar 02, 2020 • 05:00 pm ET

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Microchip Technology Inc. (NASDAQ:MCHP) Q4 2020 Earnings Conference Call - Final Transcript

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Operator
Operator

Please standby. We're about to begin. Good day, everyone, and welcome to the Microchip Technology Q4 FY'20 Business Update Conference Call. [Operator Instructions]

At this time, I'd like to turn the call over to Microchip's Chief Executive Officer, Mr. Steve Sanghi. Please go ahead, sir.

Executive
Steve Sanghi

Thank you, operator, and 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 of today as well as the recent filings with the SEC that identify important risk factors that may impact Microchip's business and results of operations.

Today, I would first describe some of the steps that Microchip has taken to cope with the COVID-19 virus. I would then discuss the effect we are seeing on our supply chain as well as our customers and provide revised the net sales guidance for the current quarter. We will then be available to answer investors and analyst questions and I have Mr. Ganesh Moorthy, Microchip's President and COO and Eric Bjornholt, our CFO with me here today.

As we continue to monitor the impact of the COVID-19 virus, our top priority remains a health, safety and well-being of our employees and their families. We have implemented a very strict policy on travel to and from the affected regions, there will be no business travel to and from the countries of China, Hong Kong, Taiwan, South Korea, Singapore, Italy and Iran, which are the most affected countries so far. As any other country shows significant increase in the affected patients. We have been adding those countries to the list. If any employee is returning from an effected country, he or she is required to follow a strict 14-day quarantine period during which such employees required to work from home. You may have question about Iran. While we do not do business in Iran. We do have employees from the Iranian origin. With Iranian New year approaching, there might be family travel that we are mindful of hence adding it onto the list of countries. We are also restricting travel to any event in any country, including the US if the event will have large number of people gathering. Therefore, we have canceled I would attendance at three different investor conferences this quarter and we are doing this conference call instead. At this point, none of our 18,000 employees or their family members have tested positive for the virus, knock on wood.,

Now, the impact on our suppliers and customers. At the Goldman Sachs Conference on February 12, I described that our supply chain from China is fairly small and the factories of our partners were just then coming back to production with the utilization ranging from 30% to 100%. We expected most factories to return to full loading within a week,