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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="B62427YCE8VK_HTM_TOC"/><a name="eolPage3"><font id="TAB1" style="MARGIN-LEFT: 531pt"></font></a>&#160;</div>
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        23, 2006</strong></font></div>
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                  Charter)</font></div>
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                  792-7200</strong></font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
                  the appropriate box below if the Form 8-K filing is intended to
                  simultaneously satisfy the filing obligation of the registrant
                  under any
                  of the following provisions:</font></div>
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                  Written communications pursuant to Rule 425 under the Securities
                  Act (17
                  CFR 230.425)</font></div>
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                  Soliciting material pursuant to Rule 14a-12 under the Exchange
                  Act (17 CFR
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                  Pre-commencement communications pursuant to Rule 14d-2(b) under
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                  Exchange Act (17 CFR 240.14d-2(b))</font></div>
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                  Pre-commencement communications pursuant to Rule 13e-4(c) under
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        OF CONTENTS</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" colspan="9" valign="top" width="78%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="top" width="8%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Page</u></font></div>
              </td>
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              <td align="left" colspan="9" valign="top" width="78%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8.8pt" align="left"><a href="#entryintomaterialagreement"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item&#160;1.01
                  Entry Into a Material Definitive Agreement</font></a></div>
              </td>
              <td colspan="2" valign="top" width="8%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="#terminationofagreement">Item
                  1.02 Termination of a Material
                  Definitive Agreement</a></font></div>
              </td>
              <td colspan="2" valign="top" width="8%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
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                  Financial Statements and Exhibits</font></a></div>
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                  Form of Executive Severance Agreement</font></a></div>
              </td>
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                  Form of Executive Severance Agreement</font></a></div>
              </td>
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        Into a Material Definitive Agreement</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Executive
        Severance Agreements</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        October 23, 2006, the Board of Directors of Microchip Technology Incorporated
        (the &#8220;Company&#8221;) authorized the Company to enter into Executive Severance
        Agreements with the following executive officers of the Company:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        Sanghi &#8212;President, Chief Executive Officer and Chairman of the
        Board</font></div>
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        V. Drehobl &#8212;Vice President, Security, Microcontroller and Technology Development
        Division</font></div>
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        W.
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        Executive Severance Agreements are not employment contracts and do not specify
        an employment term, compensation levels or other terms or conditions of
        employment. The Agreements provide for certain severance benefits to the
        executive in the event his employment is terminated under specified
        circumstances, as well as certain benefits upon a Change of Control (as defined
        in the Agreement).</font></div>
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        respect to the President and Chief Executive Officer, the Chief Financial
        Officer and the Vice President of Worldwide Sales, if the executive&#8217;s employment
        terminates for reasons other than Cause (as defined in the Agreement) within
        the
        Change of Control Period (as defined in the Agreement), the executive will
        be
        entitled to receive severance benefits consisting of the following primary
        components:</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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              <td align="left" valign="top" width="85%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                  one-time payment of his base salary in effect immediately prior
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                  Change of Control or termination date, whichever is greater, for
                  the
                  following periods: (1)&#160;in the case of the President and Chief
                  Executive Officer, two years; (2)&#160;in the case of the Chief Financial
                  Officer and the Vice President of Worldwide Sales, one year;
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                  one-time payment of his bonuses for which he was or would have
                  been
                  eligible in the year in which the Change of Control occurred or
                  for the
                  year in which termination occurred, whichever is greater, for the
                  following periods: (1)&#160;in the case of the President and Chief
                  Executive Officer, two years; (2)&#160;in the case of the Chief Financial
                  Officer and the Vice President of Worldwide Sales, one year;
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#8226;</strong></font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="85%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                  continuation of medical and dental benefits (subject to any required
                  employee contributions) for the following periods: (1) in the case
                  of the
                  President and Chief Executive Officer and the Chief Financial Officer,
                  two
                  years; (2) in the case of the Vice President of Worldwide Sales,
                  one year;
                  provided in each case that such benefits would cease sooner if
                  and when
                  the executive becomes covered by the plans of another employer;
                  and</font></div>
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            <tr>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="85%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                  payment to cover any excise tax that may be due under Section 4999
                  of the
                  Internal Revenue Code (the &#8220;Code&#8221;), if the payments provided for in the
                  Agreement constitute &#8220;parachute payments&#8221; under Section 280G of the Code
                  and the value of such payments is more than three times the executive&#8217;s
                  &#8220;base amount&#8221; as defined by Section 280G(b)(3) of the
                  Code.</font></div>
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          </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;With
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          and
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          Control
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          compensation held by the executive shall become fully vested.
</font></div>
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        Executive Officer, the Chief Financial Officer and the Vice President of
        Worldwide Sales, if the executive terminates his employment for Good Reason
        (as
        defined in the Agreement), or the executive&#8217;s employment is terminated for
        reasons other than Cause (as defined in the Agreement) within the Change
        of
        Control Period (as defined in the Agreement), the executive will be entitled
        to
        receive severance benefits consisting of the following primary
        components:</font></div>
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            <tr>
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              </td>
              <td align="left" valign="top" width="2%">
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              </td>
              <td align="left" valign="top" width="85%">
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                  one-time payment of his base salary in effect immediately prior
                  to the
                  Change of Control or termination date, whichever is greater, for
                  one year;
                  and</font></div>
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            </tr>
            <tr>
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              <td align="left" valign="top" width="1%">&#160;</td>
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            </tr>
            <tr>
              <td align="left" valign="top" width="2%">
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              </td>
              <td align="left" valign="top" width="2%">
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              </td>
              <td align="left" valign="top" width="85%">
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                  one-time payment of his bonuses for which he was or would have
                  been
                  eligible in the year in which the Change of Control occurred or
                  for the
                  year in which termination occurred, whichever is greater, for one
                  year;
                  and</font></div>
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              <td align="left" valign="top" width="1%">&#160;</td>
              <td align="left" valign="top" width="85%">&#160;</td>
            </tr>
            <tr>
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              </td>
              <td align="left" valign="top" width="2%">
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              </td>
              <td align="left" valign="top" width="85%">
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                  continuation of medical and dental benefits (subject to any required
                  employee contributions) for one year (provided in each case that
                  such
                  benefits would cease sooner if and when the executive becomes covered
                  by
                  the plans of another employer); and</font></div>
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              <td align="left" valign="top" width="2%">&#160;</td>
              <td align="left" valign="top" width="1%">&#160;</td>
              <td align="left" valign="top" width="85%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="2%">
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              <td align="left" valign="top" width="2%">
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="85%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                  payment to cover any excise tax that may be due under Section 4999
                  of the
                  Internal Revenue Code (the &#8220;Code&#8221;), if the payments provided for in the
                  Agreement constitute &#8220;parachute payments&#8221; under Section 280G of the Code
                  and the value of such payments is more that three times the executive&#8217;s
                  &#8220;base amount&#8221; as defined by Section 280G(b)(3) of the
                  Code.</font></div>
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        </table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;With
        respect
        to the executive officers named above other than the President and Chief
        Executive Officer, the Chief Financial Officer and the Vice President of
        Worldwide Sales, immediately upon termination during the Change of Control
        Period other than for Cause (as defined in the Agreement) all equity
        compensation held by the executive shall become fully vested.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="eolPage7"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>General</em></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Executive Severance Agreements were approved by both the Board of Directors
        after considering the compensation levels and terms of the Company&#8217;s management
        and the compensation practices of similarly situated companies. The Board
        of
        Directors views these Agreements as important steps in retaining and motivating
        key management personnel in the event of a Change of Control.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Copies
        of
        the forms of Executive Severance Agreements, are attached as Exhibit&#160;10.1
        and Exhibit&#160;10.2 to this Current Report on Form 8-K and are incorporated by
        reference herein. The foregoing summary of terms of the Executive Severance
        Agreements is not complete and is qualified in its entirety by reference
        to the
        exhibits to this filing. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Promotion
        of Executive Officer</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        October 23, 2006, the Company&#8217;s Board of Directors elected Mr. Moorthy as
        Executive Vice President and increased his base salary to $225,000 effective
        November 6, 2006.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        of a Material Definitive Agreement</strong></font></a></div>
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        the
        case of the President and Chief Executive Officer, the Chief Financial Officer
        and the Vice President of Worldwide Sales, the Agreements described above
        replace the existing agreements between the Company and such persons which
        were
        entered into on March&#160;6, 1996, May 8, 2000, and January 17, 1996,
        respectively, and provided for acceleration of the executive&#8217;s stock options in
        the event of termination of employment in connection with a Change of Control
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        for
        Cause (defined in the agreements being terminated.)</font></div>
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            <tr>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="ex10_1.htm"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                  of Executive Severance Agreement</font></a></div>
              </td>
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            <tr>
              <td align="left" valign="top" width="3%">
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              <td align="left" valign="middle" width="35%">
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                  Agreement</font></a></div>
              </td>
            </tr>

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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">4</font></div>
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        to the requirements of the Securities Exchange Act of 1934, the Registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
                  October 27, 2006</font></div>
              </td>
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Microchip
                  Technology Incorporated</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant)</font></div>
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              <td align="left" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="35%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                  Gordon W. Parnell</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gordon
                  W. Parnell</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
                  President, Chief Financial Officer</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Principal
                  Accounting and Financial Officer)</font></div>
              </td>
            </tr>

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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
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UNITED
        STATES
SECURITIES
        AND EXCHANGE COMMISSION
Washington,
        D.C. 20549
FORM
        8-K
CURRENT
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
        SECURITIES EXCHANGE ACT OF 1934
Date
        of
        Report (Date of earliest event reported)
October
        23, 2006
MICROCHIP
                  TECHNOLOGY INCORPORATED
(Exact
                  Name Of Registrant As Specified In Its
                  Charter)
Delaware
0-21184
86-0629024
(State
                  Or Other Jurisdiction Of Incorporation)
(Commission
                  File No.)
(IRS
                  Employer Identification No.)
2355
                  West Chandler Boulevard, Chandler, Arizona
                  85224-6199
(Address
                  Of Principal Executive Offices
)
(480)
                  792-7200
(Registrant's
                  Telephone Number, Including Area
                  Code)
Check
                  the appropriate box below if the Form 8-K filing is intended to
                  simultaneously satisfy the filing obligation of the registrant
                  under any
                  of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities
                  Act (17
                  CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange
                  Act (17 CFR
                  240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under
                  the
                  Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under
                  the
                  Exchange Act (17 CFR 240.13e-4(c))
TABLE
        OF CONTENTS
Page
Item 1.01
                  Entry Into a Material Definitive Agreement
3
Item
                  1.02 Termination of a Material
                  Definitive Agreement
4
Item 9.01
                  Financial Statements and Exhibits
4
SIGNATURE
5
EXHIBITS
6
EX-10.1
                  Form of Executive Severance Agreement
EX-10.2
                  Form of Executive Severance Agreement
Item 1.01.
Entry
        Into a Material Definitive Agreement
Executive
        Severance Agreements
On
        October 23, 2006, the Board of Directors of Microchip Technology Incorporated
        (the "Company") authorized the Company to enter into Executive Severance
        Agreements with the following executive officers of the Company:
Steve
        Sanghi —President, Chief Executive Officer and Chairman of the
        Board
Stephen
        V. Drehobl —Vice President, Security, Microcontroller and Technology Development
        Division
David
        S.
        Lambert —Vice President, Fab Operations
Mitchell
        R. Little —Vice President, Worldwide Sales and Applications
Ganesh
        Moorthy —Executive Vice President
Gordon
        W.
        Parnell —Chief Financial Officer and Vice President, Finance
Richard
        J. Simoncic —Vice President, Analog and Interface Products Division
The
        Executive Severance Agreements are not employment contracts and do not specify
        an employment term, compensation levels or other terms or conditions of
        employment. The Agreements provide for certain severance benefits to the
        executive in the event his employment is terminated under specified
        circumstances, as well as certain benefits upon a Change of Control (as defined
        in the Agreement).
With
        respect to the President and Chief Executive Officer, the Chief Financial
        Officer and the Vice President of Worldwide Sales, if the executive's employment
        terminates for reasons other than Cause (as defined in the Agreement) within
        the
        Change of Control Period (as defined in the Agreement), the executive will
        be
        entitled to receive severance benefits consisting of the following primary
        components:
•
a
                  one-time payment of his base salary in effect immediately prior
                  to the
                  Change of Control or termination date, whichever is greater, for
                  the
                  following periods: (1) in the case of the President and Chief
                  Executive Officer, two years; (2) in the case of the Chief Financial
                  Officer and the Vice President of Worldwide Sales, one year;
                  and
•
a
                  one-time payment of his bonuses for which he was or would have
                  been
                  eligible in the year in which the Change of Control occurred or
                  for the
                  year in which termination occurred, whichever is greater, for the
                  following periods: (1) in the case of the President and Chief
                  Executive Officer, two years; (2) in the case of the Chief Financial
                  Officer and the Vice President of Worldwide Sales, one year;
                  and
•
a
                  continuation of medical and dental benefits (subject to any required
                  employee contributions) for the following periods: (1) in the case
                  of the
                  President and Chief Executive Officer and the Chief Financial Officer,
                  two
                  years; (2) in the case of the Vice President of Worldwide Sales,
                  one year;
                  provided in each case that such benefits would cease sooner if
                  and when
                  the executive becomes covered by the plans of another employer;
                  and
•
a
                  payment to cover any excise tax that may be due under Section 4999
                  of the
                  Internal Revenue Code (the "Code"), if the payments provided for in the
                  Agreement constitute "parachute payments" under Section 280G of the Code
                  and the value of such payments is more than three times the executive's
                  "base amount" as defined by Section 280G(b)(3) of the
                  Code.
3
With
          respect
          to the President and Chief Executive Officer, the Chief Financial Officer
          and
          the Vice President of Worldwide Sales, immediately prior to a Change of
          Control
          (regardless of whether the executive's employment terminates), all equity
          compensation held by the executive shall become fully vested.
With
        respect
        to the executive officers named above other than the President and Chief
        Executive Officer, the Chief Financial Officer and the Vice President of
        Worldwide Sales, if the executive terminates his employment for Good Reason
        (as
        defined in the Agreement), or the executive's employment is terminated for
        reasons other than Cause (as defined in the Agreement) within the Change
        of
        Control Period (as defined in the Agreement), the executive will be entitled
        to
        receive severance benefits consisting of the following primary
        components:
•
a
                  one-time payment of his base salary in effect immediately prior
                  to the
                  Change of Control or termination date, whichever is greater, for
                  one year;
                  and
•
a
                  one-time payment of his bonuses for which he was or would have
                  been
                  eligible in the year in which the Change of Control occurred or
                  for the
                  year in which termination occurred, whichever is greater, for one
                  year;
                  and
•
a
                  continuation of medical and dental benefits (subject to any required
                  employee contributions) for one year (provided in each case that
                  such
                  benefits would cease sooner if and when the executive becomes covered
                  by
                  the plans of another employer); and
•
a
                  payment to cover any excise tax that may be due under Section 4999
                  of the
                  Internal Revenue Code (the "Code"), if the payments provided for in the
                  Agreement constitute "parachute payments" under Section 280G of the Code
                  and the value of such payments is more that three times the executive's
                  "base amount" as defined by Section 280G(b)(3) of the
                  Code.
With
        respect
        to the executive officers named above other than the President and Chief
        Executive Officer, the Chief Financial Officer and the Vice President of
        Worldwide Sales, immediately upon termination during the Change of Control
        Period other than for Cause (as defined in the Agreement) all equity
        compensation held by the executive shall become fully vested.
General
The
        Executive Severance Agreements were approved by both the Board of Directors
        after considering the compensation levels and terms of the Company's management
        and the compensation practices of similarly situated companies. The Board
        of
        Directors views these Agreements as important steps in retaining and motivating
        key management personnel in the event of a Change of Control.
Copies
        of
        the forms of Executive Severance Agreements, are attached as Exhibit 10.1
        and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated by
        reference herein. The foregoing summary of terms of the Executive Severance
        Agreements is not complete and is qualified in its entirety by reference
        to the
        exhibits to this filing.
Promotion
        of Executive Officer
On
        October 23, 2006, the Company's Board of Directors elected Mr. Moorthy as
        Executive Vice President and increased his base salary to $225,000 effective
        November 6, 2006.
Item 1.02.
Termination
        of a Material Definitive Agreement
Termination
        of Prior Agreements
In
        the
        case of the President and Chief Executive Officer, the Chief Financial Officer
        and the Vice President of Worldwide Sales, the Agreements described above
        replace the existing agreements between the Company and such persons which
        were
        entered into on March 6, 1996, May 8, 2000, and January 17, 1996,
        respectively, and provided for acceleration of the executive's stock options in
        the event of termination of employment in connection with a Change of Control
        (defined in the agreements being terminated) unless such termination was
        for
        Cause (defined in the agreements being terminated.)
Item 9.01.
Financial
        Statements and Exhibits
(d)
Exhibits
10.1
Form
                  of Executive Severance Agreement
10.2
Form
                  of Executive Severance
                  Agreement
4
SIGNATURE
Pursuant
        to the requirements of the Securities Exchange Act of 1934, the Registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized.
Dated:
                  October 27, 2006
Microchip
                  Technology Incorporated
(Registrant)
By:
/s/
                  Gordon W. Parnell
Gordon
                  W. Parnell
Vice
                  President, Chief Financial Officer
(Principal
                  Accounting and Financial Officer)
5
EXHIBITS
10.1
Form
                  of Executive Severance Agreement
10.2
Form
                  of Executive Severance
                  Agreement
6