** Shares of Microchip Technology MCHP.O down 3.8% at $52.50 post-market as co seeks capital to reduce debt

** Chandler, Arizona chipmaker announces $1.35 bln 3-yr mandatory convertible preferred stock offering

** It plans to use portion of net offering proceeds to pay for capped calls, remainder to repay debt, including commercial paper

** JP Morgan, BofA and BNP Paribas are lead joint bookrunners

** MCHP has ~$29.3 bln market based on ~537.8 mln shares outstanding

** Stock on Weds closed up 0.7% at $54.57

** YTD, shares off ~5% vs 7% drop in Philadelphia Semiconductor Index .SOX and 9.5% decline in S&P 500 Tech sector .SPLRCT

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))