CHANDLER, Arizona — February 9, 2026
Executive Summary
Microchip Technology Incorporated has announced its intention to conduct a private offering of $600 million in aggregate principal amount of Convertible Senior Notes due 2030. The proposed offering will be made exclusively to persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act of 1933. According to the company, the notes will be senior, unsecured obligations, with interest payable semi-annually in arrears, and will include an option for initial purchasers to acquire up to an additional $90 million in aggregate principal amount of notes within a specified post-issuance period. Microchip stated that it intends to use a portion of the net proceeds from the offering to fund capped call transactions and to apply the remaining proceeds toward repayment of outstanding obligations under its commercial paper program. The terms of the notes, including the interest rate and conversion rate, are expected to be determined at the time of pricing.
Announcement Overview
Microchip Technology Incorporated announced a proposed private offering of Convertible Senior Notes due 2030 as part of its ongoing capital markets activity. The company stated that the offering is subject to market conditions and other factors and will be conducted in reliance on Rule 144A under the Securities Act, limiting participation to qualified institutional buyers.
According to Microchip, the offering will consist of $600 million in aggregate principal amount of notes, with an additional option granted to the initial purchasers to acquire up to $90 million in additional notes within a 13-day period beginning on and including the date the notes are first issued. The company indicated that the notes will rank as senior, unsecured obligations and will accrue interest payable on a semi-annual basis.
Microchip further stated that, upon conversion, it will satisfy its conversion obligations by paying cash up to the aggregate principal amount of the notes being converted and may, at its election, deliver cash, shares of its common stock, or a combination of cash and shares with respect to any conversion value in excess of the principal amount.
The company emphasized that the offering is not a registered offering and that neither the notes nor any shares of common stock potentially issuable upon conversion will be registered under the Securities Act or under the securities laws of any other jurisdiction.
Key Announcement Details
- Announcement type: Proposed private debt offering
- Issuer: Microchip Technology Incorporated
- Security offered: Convertible Senior Notes
- Aggregate principal amount: $600 million
- Additional purchase option: Up to $90 million aggregate principal amount
- Maturity date: 2030
- Offering format: Private placement under Rule 144A
- Eligible investors: Qualified institutional buyers
- Ranking: Senior, unsecured obligations
- Interest payments: Semi-annual, payable in arrears
- Conversion settlement: Cash up to principal amount; cash, shares, or combination for excess, at issuer’s election
- Interest rate: To be determined at pricing
- Conversion rate: To be determined at pricing
- Use of proceeds: Capped call transactions and repayment of commercial paper
- Financial advisor: J. Wood Capital Advisors LLC
- Concurrent equity activity: Up to $25 million in common stock purchases by financial advisor
- Hedging structure: Privately negotiated capped call transactions
- Registration status: Unregistered securities
- Jurisdictional limitation: Offered only pursuant to applicable exemptions
Structure of the Convertible Senior Notes
According to Microchip, the proposed notes will be issued as senior, unsecured obligations, meaning they will rank equally with the company’s existing senior unsecured debt and will not be secured by any specific assets. Interest on the notes will be payable semi-annually in arrears, with the precise interest rate to be determined at the time of pricing.
The company stated that the notes will be convertible at the option of the holders under certain conditions and during specified periods. Upon conversion, Microchip will pay cash equal to the aggregate principal amount of the notes converted and may elect to settle any conversion value above the principal amount in cash, shares of common stock, or a combination of both.
The conversion rate and other economic terms, including the initial conversion price, will be set at pricing and will be disclosed in the final offering documentation. Microchip noted that these terms are subject to prevailing market conditions at the time of issuance.
Use of Proceeds
Microchip stated that it intends to allocate the net proceeds of the offering across two primary uses. First, the company plans to use a portion of the proceeds to pay the cost of capped call transactions entered into with certain option counterparties. If the initial purchasers exercise their option to acquire additional notes, Microchip expects to use a portion of the incremental proceeds to enter into additional capped call transactions.
Second, the company intends to use the remaining net proceeds to repay notes outstanding under its commercial paper program. According to Microchip, this allocation reflects its broader capital management strategy and its approach to balancing long-term financing with short-term liquidity instruments.
Capped Call Transactions and Dilution Management
In connection with the pricing of the notes, Microchip expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers, their affiliates, or other financial institutions serving as option counterparties. The company stated that the capped call transactions are expected to cover, subject to customary anti-dilution adjustments, the number of shares of common stock underlying the notes sold in the offering.
According to Microchip, the capped call transactions are generally intended to reduce potential dilution to its common stock upon conversion of the notes and/or offset any cash payments the company elects to make in excess of the principal amount of the converted notes. The effectiveness of these transactions is subject to a cap, as defined in the applicable agreements.
The company also disclosed that the option counterparties or their affiliates may purchase shares of common stock or enter into derivative transactions in connection with establishing their initial hedge positions. Such activity may occur concurrently with or shortly after the pricing of the notes.
Market Activity and Hedging Considerations
Microchip stated that hedging activities related to the capped call transactions, as well as the concurrent stock purchases by J. Wood Capital Advisors LLC, could influence the market price of the company’s common stock or the notes. The company noted that these activities could increase or reduce the magnitude of price movements during the relevant periods.
In addition, the option counterparties or their affiliates may modify their hedge positions over time by entering into or unwinding derivative transactions or by purchasing or selling shares of common stock or other securities in secondary market transactions. According to Microchip, such activity may occur prior to the maturity of the notes, during any observation period related to conversion, or in connection with redemption, repurchase, or other specified events.
Microchip indicated that these market activities could affect the ability of noteholders to convert the notes and, in certain circumstances, could influence the number of shares or the value of consideration received upon conversion.
Regulatory and Offering Limitations
Microchip emphasized that the notes will be offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The company stated that neither the notes nor any shares of common stock potentially issuable upon conversion have been or will be registered under the Securities Act or the securities laws of any other jurisdiction.
As a result, the securities may not be offered or sold in the United States except pursuant to an applicable exemption from registration requirements. Microchip further stated that the announcement does not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction where such an offer, solicitation, or sale would be unlawful.
Financial Advisory and Concurrent Equity Purchases
In connection with the pricing of the notes, Microchip disclosed that it has been advised that J. Wood Capital Advisors LLC, its financial advisor with respect to the offering, intends to purchase up to $25 million of shares of the company’s common stock. These purchases are expected to be made concurrently with the offering in privately negotiated transactions with institutional investors through one of the initial purchasers or its affiliate.
According to Microchip, this activity is separate from the offering of the notes and forms part of the overall transaction framework surrounding the issuance.
About Microchip Technology Incorporated
Microchip Technology Incorporated is a global provider of embedded control and processing solutions designed to support smart, connected, and secure applications. The company traces its origins to 1989, when it was spun out as an independent semiconductor business, and has since expanded through organic development and strategic acquisitions.
Headquartered in Chandler, Arizona, Microchip designs and manufactures a broad portfolio of microcontrollers, analog devices, connectivity products, and secure solutions used across industrial, automotive, consumer, aerospace, defense, and communications markets. The company serves tens of thousands of customers worldwide and supports product deployment across North America, Europe, and Asia.
Microchip operates a vertically integrated model encompassing product design, wafer fabrication, assembly, and test, supported by a global sales and distribution network. Its product portfolio includes 8-bit, 16-bit, and 32-bit microcontrollers, field-programmable gate arrays, power management solutions, timing products, and security devices.
As of its most recent public disclosures, Microchip reported annual revenue measured in the billions of dollars and maintained a diversified end-market exposure designed to support long-term demand across multiple economic cycles. The company’s common stock is listed on the Nasdaq Global Select Market under the symbol MCHP.
Investor Relations Contact
Sajid Daudi
Head of Investor Relations
Microchip Technology Incorporated
Phone: (480) 792-7385
Source Attribution
Source: Company announcement
