DEF 14A: Definitive proxy statements

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12

MICROCHIP TECHNOLOGY INCORPORATED
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[MICROCHIP LOGO]

MICROCHIP TECHNOLOGY INCORPORATED

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
August 20, 1999
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The Annual Meeting of Stockholders of Microchip Technology Incorporated, a
Delaware corporation (the "Company"), will be held at 9:00 a.m. local time on
Friday, August 20, 1999, at the Company's facility at 1200 South 52nd Street,
Tempe, Arizona, for the following purposes:

1. To elect directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified;

2. To approve an amendment to the Company's Employee Stock Purchase Plan to
increase by 400,000 the number of shares of Common Stock reserved for issuance
thereunder;

3. To ratify the appointment of KPMG LLP as the independent auditors of the
Company for the fiscal year ending March 31, 2000; and

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

Only stockholders of record at the close of business on June 25, 1999 are
entitled to notice of and to vote at the meeting.

All stockholders are cordially invited to personally attend the meeting. To
assure your representation at the meeting, however, you are urged to mark, sign,
date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she previously has returned a
proxy.

Sincerely,

/s/ C. Philip Chapman
C. Philip Chapman
Secretary


Chandler, Arizona
July 14, 1999
[MICROCHIP LOGO]

MICROCHIP TECHNOLOGY INCORPORATED
2355 West Chandler Boulevard
Chandler, Arizona 85224-6199

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PROXY STATEMENT
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VOTING AND OTHER MATTERS

GENERAL

The enclosed proxy is solicited on behalf of Microchip Technology
Incorporated, a Delaware corporation (the "Company"), by the Company's board of
directors (the "Board of Directors") for use at the Annual Meeting of
Stockholders to be held at 9:00 a.m. local time on Friday, August 20, 1999 (the
"Meeting"), or at any adjournment thereof, for the purposes set forth in this
Proxy Statement and in the accompanying Notice of Annual Meeting of
Stockholders. The Meeting will be held at the Company's facility at 1200 South
52nd Street, Tempe, Arizona.

These proxy solicitation materials were first mailed on or about July 14,
1999, to all stockholders entitled to vote at the Meeting.

VOTING SECURITIES AND VOTING RIGHTS

Stockholders of record at the close of business on June 25, 1999 (the
"Record Date") are entitled to notice of and to vote at the Meeting. On the
Record Date, 51,232,157 shares of Common Stock were issued and outstanding.

The presence, in person or by proxy, of the holders of a majority of the
total number of shares of Common Stock outstanding on the Record Date
constitutes a quorum for the transaction of business at the Meeting. Shares that
are voted "FOR," "AGAINST," or "WITHHELD FROM" a matter are treated as being
present at the Meeting for purposes of establishing a quorum and are also
treated as shares entitled to vote at the Meeting (the "Votes Cast") with
respect to such matter. Each stockholder voting at the Meeting, either in person
or represented by proxy, may cast one vote per share of Common Stock held on all
matters to be voted on at the Meeting. Assuming that a quorum is present, the
affirmative vote of a majority of the Votes Cast is required: (i) to amend the
Company's Employee Stock Purchase Plan, as proposed; and (ii) to ratify the
appointment of the Company's independent auditors. In the election of directors,
the five nominees receiving the highest number of affirmative votes shall be
elected as directors. Votes withheld from any director are counted for purposes
of determining the presence of a quorum, but have no other legal effect under
Delaware law.

VOTING OF PROXIES; ABSTENTIONS; BROKER NON-VOTES

Votes cast in person or by proxy at the Meeting will be tabulated by the
election inspector(s) appointed for the Meeting. When a proxy is properly
executed and returned, the shares it represents will be voted at the Meeting as
directed. Any proxy that is returned using the form of proxy enclosed and that
is not marked as to a particular item will be voted: (i) "FOR" the election of
each of the nominees set forth in this Proxy Statement; (ii) "FOR" approval of
each of the other matters presented to stockholders in this Proxy Statement; and
(iii) as the proxy holders deem advisable on other matters that may come before
the Meeting. A stockholder may indicate on the enclosed proxy or its substitute
that it is abstaining from voting on a particular matter (an "abstention"). A
broker may indicate on the enclosed proxy or its substitute that it does not
have discretionary authority as to certain shares to vote on a particular matter
(a "broker non-vote"). Abstentions and broker non-votes are each tabulated
separately. The election inspector(s) will determine whether a quorum is present
at the Meeting. In general, Delaware law provides that a majority of the shares
entitled to vote, present in person or represented by proxy, constitutes a
quorum. Abstentions and broker non-votes of shares that are entitled to vote are
treated as shares that are present in person or represented by proxy for
purposes of determining the presence of a quorum. In determining whether a
proposal has been approved, abstention of shares that are entitled to vote are
treated as Votes Cast with respect to such proposal, but not as voting for such
proposal and hence have the same effect as votes against such proposal; broker
non-votes of shares that are entitled to vote are not treated as Votes Cast with
respect to the particular proposal on which the broker has expressly not voted,
and hence have no effect on the outcome of the voting on a proposal that
requires a majority of the Votes Cast (such as the approval of a plan
amendment). However, with respect to a proposal that requires a majority of the
outstanding shares of Common Stock, a broker non-vote has the same effect as a
vote against the proposal.
REVOCABILITY OF PROXIES

Any person giving a proxy may revoke the proxy at any time before its use
by delivering to the Company written notice of revocation or a duly executed
proxy bearing a later date or by attending the Meeting and voting in person.

SOLICITATION

The Company will pay all expenses of this solicitation. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for expenses incurred in forwarding solicitation materials to
such beneficial owners. Proxies also may be solicited by certain of the
Company's directors and officers, personally or by telephone, without additional
compensation. The Company may also, at its sole expense, retain a proxy
solicitation firm to assist in the distribution of proxy solicitation materials
and in the collection of proxies. If so, the Company believes that the expense
will not exceed $15,000.

ELECTION OF DIRECTORS

NOMINEES

A board of five directors is to be elected at the Meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for each of
the nominees named below. All of the nominees are currently directors of the
Company. In the event that any such nominee is unable or declines to serve as a
director at the time of the Meeting, the proxies will be voted for any nominee
designated by the current Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a director.
The term of office of each person elected as a director at the Meeting will
continue until the next annual meeting of stockholders and until a successor has
been elected and qualified.

The following table sets forth certain information regarding the nominees
for director of the Company:

NAME AGE POSITION(S) HELD
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Steve Sanghi ......................... 43 Chairman of the Board, President
and Chief Executive Officer
Albert J. Hugo-Martinez(1)(2) ........ 53 Director
L.B. Day(1) .......................... 54 Director
Matthew W. Chapman(2) ................ 48 Director
Wade F. Meyercord .................... 58 Director

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(1) Member of the Compensation Committee
(2) Member of the Audit Committee

Mr. Sanghi is currently, and has been since August 1990, President of the
Company, since October 1991, Chief Executive Officer and since October 1993,
Chairman of the Board of Directors. He has served as a director of the Company
since August 1990. He served as the Company's Chief Operating Officer from
August 1990 through October 1991 and as Senior Vice President of Operations from
February 1990 through August 1990. Mr. Sanghi is also the chairman of the board
of directors of ADFlex Solutions, Inc., a U.S. supplier of flexible
circuit-based interconnect solutions.

Mr. Hugo-Martinez has served as a director of the Company since October
1990. Since February 1999, he has served as President and Chief Executive
Officer of Network Webware, Inc., an Internet software company. From March 1996
until November 1999, he served as President and Chief Executive Officer and a
member of the board of directors of GTI Corporation, a manufacturer of ISDN and
local area network subcomponents. From 1987 to 1995, he served as President and
Chief Executive Officer of Applied Micro Circuits Corporation, a manufacturer of
high-performance bipolar and BiCMOS gate arrays.

2
Mr. Day has served as a director since December 1994. Since 1976, he has
served as President of L.B. Day & Company, Inc., a management consulting firm
specializing in organizational structure, development and strategic planning.
Mr. Day is also a member of the board of directors of CFI ProServices, Inc., a
supplier of integrated software solutions and services to financial institutions
throughout the United States.

Mr. Chapman has served as a director since May 1997. Since 1988, he has
served as Chief Executive Officer of CFI ProServices, Inc., a supplier of
integrated software solutions and services to financial institutions throughout
the United States ("CFI"), and since 1991, he has also served as Chairman of
CFI.

Mr. Meyercord has served as a director since June 1999. Since 1997, he has
served as Senior Vice President, e-commerce and Quality Assurance of Diamond
Multimedia Systems, Inc., a supplier of Internet multimedia appliances. From
1987 to 1997, he served as President of Meyercord & Associates, a management
consulting firm specializing in strategy and infrastructure improvement. Mr.
Meyercord is also a member of the board of directors of California Micro Devices
Corporation, an integrated passive electronics components manufacturer.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Company's By-Laws authorize the Board of Directors to appoint from
among its members one or more committees comprised of one or more directors. The
Board of Directors has appointed a standing Audit Committee, currently comprised
of directors Hugo-Martinez and Chapman, and a standing Compensation Committee,
currently comprised of directors Hugo-Martinez and Day. The Company does not
have a nominating committee or any committee that performs the functions of a
nominating committee. The Audit Committee is primarily responsible for
appointing the Company's independent accounting firm and for reviewing and
evaluating the Company's accounting principles and its systems of internal
controls. The Audit Committee also reviews the annual financial statements,
significant accounting and tax issues and the scope of the annual audit with the
Company's independent auditors. The Compensation Committee reviews and acts on
all matters relating to compensation levels and benefit plans for the Company's
key executives. See "Board Compensation Committee Report on Executive
Compensation," below.

The Board of Directors met six times during the fiscal year ended March 31,
1999. The Company's Audit Committee met twice, and the Company's Compensation
Committee met four times, during the fiscal year ended March 31, 1999. No
director has attended fewer than 75% of the aggregate number of Board of
Directors' and committee meetings held during the fiscal year ended March 31,
1999.

DIRECTOR COMPENSATION AND OTHER INFORMATION

Director Fees

During fiscal 1999 and through the first quarter of fiscal 2000, directors
received a $10,000 annual retainer, paid in quarterly installments, and $1,000
per meeting for each regular and special Board of Directors meeting. No
compensation was paid for telephonic meetings of the Board of Directors or for
meetings of committees of the Board of Directors.

Commencing July 1, 1999, directors will receive a $12,500 annual retainer,
paid in quarterly installments (prorated for the remaining three fiscal quarters
of fiscal 2000), and $1,500 per meeting for each regular and special Board of
Directors meeting that a director attends in person. No compensation is paid for
telephonic meetings of the Board of Directors or for meetings of committees of
the Board of Directors.

Stock Options

Under the terms of the Company's 1993 Stock Option Plan, each non-employee
director is automatically granted an option to purchase 10,000 shares of Common
Stock upon his or her first election to the Board of Directors, and an
additional option to purchase 5,000 shares of Common Stock as of the first
business day of the month in which the annual stockholders' meeting is held. On
August 3, 1998, each of directors Hugo-Martinez, Day and Chapman was granted an
option to acquire 5,000 shares of Common Stock at an exercise price of $29.5625,
such options to vest in a series of 12 equal and successive monthly installments
commencing one month after the grant date. Following his initial appointment to
the Board of Directors on June 16, 1999, Mr. Meyercord was granted an option to
acquire 10,000 shares of Common Stock at an exercise price of $49.625 per share.
This option vests in a series of 36 equal and successive monthly installments
commencing one month after the grant date.

3
EXECUTIVE COMPENSATION

SUMMARY OF CASH AND OTHER COMPENSATION

The following table sets forth the compensation for the three fiscal years
ended March 31, 1999, 1998 and 1997 earned by the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers whose salary plus bonus for fiscal 1999 exceeded $100,000 for services
rendered in all capacities to the Company (collectively, the "Named Executive
Officers"):

SUMMARY COMPENSATION TABLE