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      Form 8-K 082406
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      AND EXCHANGE COMMISSION</strong></font></div>
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      D.C. 20549</strong></font></div>
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      8-K</strong></font></div>
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      REPORT PURSUANT TO SECTION&#160;13 OR 15(d) OF</strong></font></div>
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      SECURITIES EXCHANGE ACT OF 1934</strong></font></div>
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      of
      Report (Date of earliest event reported)</font></div>
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      18, 2006</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="center"><img src="mich4c.jpg" alt=""></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>MICROCHIP
                TECHNOLOGY INCORPORATED</strong></font></div>
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                Name Of Registrant As Specified In Its
                Charter)</font></div>
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                  Or Other Jurisdiction Of Incorporation)</font></div>
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                  File No.)</font></div>
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                  Employer Identification No.)</font></div>
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                  West Chandler Boulevard, Chandler, Arizona
                  85224-6199</strong></font></div>
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                  Of Principal Executive Offices</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font></div>
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                  792-7200</strong></font></div>
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                  Telephone Number, Including Area
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                the appropriate box below if the Form 8-K filing is intended to
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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 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"><strong>Item
      1.01 Entry into a Material Definitive Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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"><strong>Amendments
      to 2004 Equity Incentive Plan </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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
      August
      18, 2006, the stockholders of Microchip Technology Incorporated (the &#8220;Company&#8221;)
      approved an amendment to the Company&#8217;s 2004 Equity Incentive Plan (the &#8220;Equity
      Plan&#8221;) to remove the 30% limitation on the number of shares that can be granted
      as restricted stock units (&#8220;RSUs&#8221;). The amendment was approved by the Company&#8217;s
      Board of Directors on May 1, 2006. The purpose of the amendment was to enable
      the Company to continue to grant RSUs as its primary equity compensation
      incentive. The Equity Plan provides for the grant of stock options, stock
      appreciation rights, restricted stock (which may be granted in the form of
      restricted stock shares or RSUs), performance shares, performance units, and
      deferred stock units to Company employees, including executive officers, and
      consultants as well as for automatic grants of awards to the non-employee
      members of the Company&#8217;s Board of Directors. The Compensation Committee or its
      delegates may determine the awards to be made under the Equity Plan, but for
      the
      CEO whose awards are made at the discretion of the Compensation Committee
      alone.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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
      August
      18, 2006, the Company&#8217;s Board of Directors further amended the Equity Plan such
      that the annual option grants for non-employee directors would be made on the
      date of the Company&#8217;s annual stockholders meeting. Prior to the amendment, the
      grant date for such awards had been the first day of the month in which the
      annual stockholders meeting was scheduled.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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">A
      copy of
      the Equity Plan, as amended, is attached hereto as Exhibit 10.1.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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"><strong>Executive
      Management Incentive Compensation Plan</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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
      August
      18, 2006, the stockholders of the Company approved the Executive Management
      Incentive Compensation Plan (the &#8220;Executive Plan&#8221;) to replace the Company&#8217;s
      existing Management Incentive Compensation Plan (the &#8220;Management Plan&#8221;) as it
      applies to executive officers.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      The
      Executive Plan was approved by the Company&#8217;s Board of Directors on May 1, 2006.
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Executive Plan will be effective on October 1, 2006 and provides for the payment
      of cash bonuses to the Company&#8217;s executive officers based upon the objectives
      set by the Compensation Committee after receipt of recommendations from the
      Company&#8217;s CEO. At the end of each fiscal quarter, the Compensation Committee
      will determine whether the objectives were met and determine the amount of
      payout to each participant. The CEO may make recommendations regarding awards
      to
      be made, other than those for himself. The purpose of the Executive Plan is
      to
      motivate the Company&#8217;s executive officers to achieve performance objectives and
      to reward them when those objectives are satisfied. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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
      performance objectives for each fiscal quarter for fiscal 2007 are based upon
      the following areas: quarterly sequential sales growth (overall and in the
      Company&#8217;s 16-bit and analog product divisions), gross margin percentage,
      operating expense percentage, operating profit percentage and earnings per
      share. The quarterly payments in fiscal 2007 for the Company&#8217;s CEO and the four
      other mostly highly paid executive officers participating in the Executive
      Plan
      are targeted at an aggregate of approximately $290,000 for all such officers.
      Because the amount of cash bonuses are dependent upon satisfaction of the
      performance objectives, the exact amount of the payout (if any) to an executive
      officer under the program cannot be determined at this time. Actual bonuses
      may
      be higher or lower than the targets depending upon the level of performance
      achieved by the Company. The maximum payment that any participant may receive
      under the Executive Plan in any Company fiscal year is $2,500,000.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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">A
      copy of
      the Executive Plan is attached hereto as Exhibit 10.2.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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"><strong>Discretionary
      Executive Incentive Compensation</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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
      August
      18, 2006, the Company&#8217;s Board of Directors approved the Discretionary Executive
      Management Incentive Compensation Plan (the &#8220;Discretionary Plan&#8221;) to replace the
      discretionary portion of the Company&#8217;s Management Plan as it applies to
      executive officers. The Discretionary Plan is intended to increase stockholder
      value and the success of the Company by providing incentive and reward to
      executive officers for exceptional performance in</font></div><br>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <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">achieving
      key objectives. Cash bonuses awarded under the Discretionary Plan are determined
      by the Compensation Committee of the Board of Directors based upon the
      objectives set by the Compensation Committee. At the end of each fiscal quarter,
      the Compensation Committee will determine whether the objectives have been
      met
      and determine the amount of payouts (if any) under the Executive Plan. The
      CEO
      may make recommendations regarding objectives and awards, other than awards
      for
      himself. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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">Quarterly
      payments in fiscal 2007 for the executive officers participating in the
      Discretionary Plan are dependent upon the satisfaction of objectives and the
      level of performance achieved by the Company. The exact amount of the payout
      (if
      any) to an executive officer under the program cannot be determined at this
      time. The quarterly payouts for fiscal 2007 will be based upon achievement
      of
      specific operational objectives as well as additional factors as the
      Compensation Committee may determine.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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">A
      copy of
      the Discretionary Plan is attached hereto as Exhibit 10.3.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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"><strong>Management
      Incentive Compensation Plan</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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">Since
      1992, the Company has had a management incentive compensation plan for
      motivating its executive officers, managers and senior technical employees
      using
      a formula based upon the Company&#8217;s financial performance. As described above, on
      August 18, 2006, the Company&#8217;s stockholders approved the Executive Plan to
      replace the Management Plan as it applies to executive officers in order to
      enhance the Company&#8217;s ability to obtain tax deductions for &#8220;performance-based
      compensation&#8221; under Section 162(m) of the Internal Revenue Code of 1986, as
      amended. In connection with the approval of the Executive Plan and the
      Discretionary Plan, the Company&#8217;s Board of Directors approved an amendment and
      restatement of the Management Plan so that it applies to awards to employees
      who
      are not executive officers and to more closely correspond to the applicable
      provisions of the Executive Plan and the Discretionary Plan. The purpose of
      the
      Management Plan is to motivate management and senior technical employees to
      achieve performance objectives and to reward them for achievement of those
      objectives. Incentive cash bonuses awarded under the Management Plan are
      calculated by the Compensation Committee of the Board of Directors or their
      delegates based upon the objectives set by the Compensation Committee. At the
      end of each fiscal quarter, the Compensation Committee or their delegates will
      determine whether the objectives have been met and determine the amount of
      payout under the Management Plan. The Management Plan also has a discretionary
      element to reward exceptional performance. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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">Quarterly
      payments in fiscal 2007 for the non-executive employees participating in the
      Management Plan cannot be determined at this time as they are dependent upon
      satisfaction of objectives and the level of performance achieved by the Company.
      Beginning on October 1, 2006, the Company&#8217;s executive officers will not
      participate in the Management Plan. The performance objectives for each fiscal
      quarter for fiscal 2007 are based upon the following areas: quarterly sequential
      sales growth (overall and in the Company&#8217;s 16-bit and analog product divisions),
      gross margin percentage, operating expense percentage, operating profit
      percentage and earnings per share, as well as additional objectives as the
      Compensation Committee may determine.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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">A
      copy of
      the Management Plan is attached hereto as Exhibit 10.4.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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"><strong>Item
      9.01.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 22.5pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 22.5pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
      Statements and Exhibits.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004
                Equity Incentive Plan, as amended</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                Management Incentive Compensation Plan</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Discretionary
                Executive Incentive Compensation</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Management
                Incentive Compensation Plan</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>

      </table>
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</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>
    <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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">&#160;</div>
    </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:
                August 24, 2006</font></div>
            </td>
            <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"><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>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="justify" valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="43%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="left" valign="top" width="43%" style="border-bottom: medium none;">
              <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"><u><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 id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#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></u></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="left" valign="top" width="43%">
              <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>

      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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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>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </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 style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXHIBITS</strong></font></div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004
                Equity Incentive Plan, as amended</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                Management Incentive Compensation Plan</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Discretionary
                Executive Incentive Compensation</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Management
                Incentive Compensation Plan</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>

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Form 8-K 082406
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)
August
      18, 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))
Item
      1.01 Entry into a Material Definitive Agreement
Amendments
      to 2004 Equity Incentive Plan
On
      August
      18, 2006, the stockholders of Microchip Technology Incorporated (the "Company")
      approved an amendment to the Company's 2004 Equity Incentive Plan (the "Equity
      Plan") to remove the 30% limitation on the number of shares that can be granted
      as restricted stock units ("RSUs"). The amendment was approved by the Company's
      Board of Directors on May 1, 2006. The purpose of the amendment was to enable
      the Company to continue to grant RSUs as its primary equity compensation
      incentive. The Equity Plan provides for the grant of stock options, stock
      appreciation rights, restricted stock (which may be granted in the form of
      restricted stock shares or RSUs), performance shares, performance units, and
      deferred stock units to Company employees, including executive officers, and
      consultants as well as for automatic grants of awards to the non-employee
      members of the Company's Board of Directors. The Compensation Committee or its
      delegates may determine the awards to be made under the Equity Plan, but for
      the
      CEO whose awards are made at the discretion of the Compensation Committee
      alone.
On
      August
      18, 2006, the Company's Board of Directors further amended the Equity Plan such
      that the annual option grants for non-employee directors would be made on the
      date of the Company's annual stockholders meeting. Prior to the amendment, the
      grant date for such awards had been the first day of the month in which the
      annual stockholders meeting was scheduled.
A
      copy of
      the Equity Plan, as amended, is attached hereto as Exhibit 10.1.
Executive
      Management Incentive Compensation Plan
On
      August
      18, 2006, the stockholders of the Company approved the Executive Management
      Incentive Compensation Plan (the "Executive Plan") to replace the Company's
      existing Management Incentive Compensation Plan (the "Management Plan") as it
      applies to executive officers.
The
      Executive Plan was approved by the Company's Board of Directors on May 1, 2006.
The
      Executive Plan will be effective on October 1, 2006 and provides for the payment
      of cash bonuses to the Company's executive officers based upon the objectives
      set by the Compensation Committee after receipt of recommendations from the
      Company's CEO. At the end of each fiscal quarter, the Compensation Committee
      will determine whether the objectives were met and determine the amount of
      payout to each participant. The CEO may make recommendations regarding awards
      to
      be made, other than those for himself. The purpose of the Executive Plan is
      to
      motivate the Company's executive officers to achieve performance objectives and
      to reward them when those objectives are satisfied.
The
      performance objectives for each fiscal quarter for fiscal 2007 are based upon
      the following areas: quarterly sequential sales growth (overall and in the
      Company's 16-bit and analog product divisions), gross margin percentage,
      operating expense percentage, operating profit percentage and earnings per
      share. The quarterly payments in fiscal 2007 for the Company's CEO and the four
      other mostly highly paid executive officers participating in the Executive
      Plan
      are targeted at an aggregate of approximately $290,000 for all such officers.
      Because the amount of cash bonuses are dependent upon satisfaction of the
      performance objectives, the exact amount of the payout (if any) to an executive
      officer under the program cannot be determined at this time. Actual bonuses
      may
      be higher or lower than the targets depending upon the level of performance
      achieved by the Company. The maximum payment that any participant may receive
      under the Executive Plan in any Company fiscal year is $2,500,000.
A
      copy of
      the Executive Plan is attached hereto as Exhibit 10.2.
Discretionary
      Executive Incentive Compensation
On
      August
      18, 2006, the Company's Board of Directors approved the Discretionary Executive
      Management Incentive Compensation Plan (the "Discretionary Plan") to replace the
      discretionary portion of the Company's Management Plan as it applies to
      executive officers. The Discretionary Plan is intended to increase stockholder
      value and the success of the Company by providing incentive and reward to
      executive officers for exceptional performance in
2
achieving
      key objectives. Cash bonuses awarded under the Discretionary Plan are determined
      by the Compensation Committee of the Board of Directors based upon the
      objectives set by the Compensation Committee. At the end of each fiscal quarter,
      the Compensation Committee will determine whether the objectives have been
      met
      and determine the amount of payouts (if any) under the Executive Plan. The
      CEO
      may make recommendations regarding objectives and awards, other than awards
      for
      himself.
Quarterly
      payments in fiscal 2007 for the executive officers participating in the
      Discretionary Plan are dependent upon the satisfaction of objectives and the
      level of performance achieved by the Company. The exact amount of the payout
      (if
      any) to an executive officer under the program cannot be determined at this
      time. The quarterly payouts for fiscal 2007 will be based upon achievement
      of
      specific operational objectives as well as additional factors as the
      Compensation Committee may determine.
A
      copy of
      the Discretionary Plan is attached hereto as Exhibit 10.3.
Management
      Incentive Compensation Plan
Since
      1992, the Company has had a management incentive compensation plan for
      motivating its executive officers, managers and senior technical employees
      using
      a formula based upon the Company's financial performance. As described above, on
      August 18, 2006, the Company's stockholders approved the Executive Plan to
      replace the Management Plan as it applies to executive officers in order to
      enhance the Company's ability to obtain tax deductions for "performance-based
      compensation" under Section 162(m) of the Internal Revenue Code of 1986, as
      amended. In connection with the approval of the Executive Plan and the
      Discretionary Plan, the Company's Board of Directors approved an amendment and
      restatement of the Management Plan so that it applies to awards to employees
      who
      are not executive officers and to more closely correspond to the applicable
      provisions of the Executive Plan and the Discretionary Plan. The purpose of
      the
      Management Plan is to motivate management and senior technical employees to
      achieve performance objectives and to reward them for achievement of those
      objectives. Incentive cash bonuses awarded under the Management Plan are
      calculated by the Compensation Committee of the Board of Directors or their
      delegates based upon the objectives set by the Compensation Committee. At the
      end of each fiscal quarter, the Compensation Committee or their delegates will
      determine whether the objectives have been met and determine the amount of
      payout under the Management Plan. The Management Plan also has a discretionary
      element to reward exceptional performance.
Quarterly
      payments in fiscal 2007 for the non-executive employees participating in the
      Management Plan cannot be determined at this time as they are dependent upon
      satisfaction of objectives and the level of performance achieved by the Company.
      Beginning on October 1, 2006, the Company's executive officers will not
      participate in the Management Plan. The performance objectives for each fiscal
      quarter for fiscal 2007 are based upon the following areas: quarterly sequential
      sales growth (overall and in the Company's 16-bit and analog product divisions),
      gross margin percentage, operating expense percentage, operating profit
      percentage and earnings per share, as well as additional objectives as the
      Compensation Committee may determine.
A
      copy of
      the Management Plan is attached hereto as Exhibit 10.4.
Item
      9.01.
Financial
      Statements and Exhibits.
(d)
Exhibits
10.1
2004
                Equity Incentive Plan, as amended
10.2
Executive
                Management Incentive Compensation Plan
10.3
Discretionary
                Executive Incentive Compensation
10.4
Management
                Incentive Compensation Plan
3
SIGNATURES
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:
                August 24, 2006
Microchip
                Technology Incorporated
(Registrant)
By:
/s/
                Gordon W. Parnell
Gordon
                W. Parnell
Vice
                President, Chief Financial Officer
(Principal
                Accounting and Financial Officer)
4
EXHIBITS
10.1
2004
                Equity Incentive Plan, as amended
10.2
Executive
                Management Incentive Compensation Plan
10.3
Discretionary
                Executive Incentive Compensation
10.4
Management
                Incentive Compensation Plan
5