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© Microchip Electronics Production | March 30, 2011

Microchip: 'We ramp up capacity as we speak'

Microchip states that - with main manufacturing units located in the USA - production is not affected by the recent disaster that struck Japan (and rival Renesas). President & CEO Steve Sanghi has written a letter to customers and potential customers alike.

"Microchip has substantial manufacturing capacity to help those customers who are stranded because of a disruption in their supply chain. We have already initiated the ramp of our fab, assembly and test facilities to produce more supply of our products. Microchip also has more than 1'000 global design partners prepared to help every customer in identifying substitute microcontrollers, analog, memory and wireless solutions from Microchip’s extensive portfolio, in addition to converting code and assisting with product design. We also have a network of more than 80 distributors throughout the world that are ready to help customers in sourcing production quantities of Microchip’s semiconductors." "Now, here is the challenge. Recently, the lead times of Microchip’s products have come down and, as a result, many customers have only placed near-term backlog. Before we commit our availability to competitors’ customers who are stranded, we would like to ensure that our current customers are taken care of. Despite zero disruptions in our supply line today, the circumstances are changing every day. Some allocations of Microchip’s raw materials could develop in the near future, if Microchip’s Japanese suppliers start to allocate the output of their unaffected facilities. This fear of raw-material allocation, together with significant demand from our competitors’ stranded customers, is likely to take the lead times of Microchip’s products back out." "So, here is a call to action for all of Microchip’s existing customers. Please make sure that you immediately review your needs and place an order for no less than 12 weeks of your requirements. I have issued similar calls before. History bears out that those who heeded my requests were better off, while the others had to pay expedite charges or suffer delays in product delivery." "I am expecting a huge surge of redesign inquiries, as system manufacturers move to rescue their microcontroller and analog product supplies. Therefore, our existing customers should get in line first. We work from backlog, and those who commit backlog to us secure the supply first. In a couple of weeks, we will look at the availability above backlog and start committing that to stranded customers looking for substitutions."
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