SIMO

[basonista]

Silicon Motion Technology Corporation, through its wholly owned subsidiary, Silicon Motion, Inc., engages in the design, development, and marketing of semiconductor solutions for the multimedia consumer electronics market. It offers mobile storage products, including flash memory controllers and universal serial bus (USB) controllers, which are used in mobile storage media, such as flash memory cards and USB flash drives. The company also offers multimedia system-on-chips (SoCs) that consist of portable audio SoCs, multimedia display processors, and image processors, used in digital media devices, such as MP3 players, personal computer (PC) cameras, PC notebooks, and broadband multimedia phones. Silicon Motion Technology markets and sells its products primarily through independent distributors and direct sales personnel to original equipment manufacturers and original design manufacturers worldwide. The company was incorporated in 1997 and is headquartered in Jhubei City, Taiwan.

Stock is somewhat pricey at these levels but the balance sheet looks strong with no debt (past 5 years) and little dilution.  And it continues to move up.  

[setravis]

Silicon Motion Facing Positive Outlook.......

Thanks to FCI Acquisition, Market Trend
Silicon Motion Tech Corporation (SIMO) is a fabless semiconductor
company that designs, develops and markets universally compatible,
high-performance, low-power semiconductor solutions for the multimedia
consumer electronics market. The company's three major product
lines are its mobile storage business, its multimedia SoC business, and
its mobile communications business. In November of 2007, the company
moved to acquire Future Communications IC, Inc. for $90M, and
today, it is reaping the benefits of that deal. At the time of the acquisition,
CEO Wallace Kou stated, "We believe Mobile TV represents the
next major wave of innovation for the wireless handset industry and we
are very excited that FCI will be joining Silicon Motion. Korea, where
mobile TV is already well on its way to becoming widely adopted by
consumers, is the global market leader in the rollout of mobile TV, and
is a test bed for the development of other related cutting-edge advances
in mobile handset technologies. This acquisition not only allows us to
step into such a favorable environment, it also gives us the opportunity
to strengthen our portfolio of solutions for mobile devices, including for
multimedia applications. FCI's Mobile TV tuner solutions are used by
many of Korea's leading handset manufacturers, and are considered
among the best in class in terms of size, power and performance. FCI
has shipped over 35M units of CDMA transceivers and other front-end,
as well as Mobile TV tuners which have been used in over 150 phone
models. They also own over 30 patents and pending patents, and their
margins are similar to our own." Trading on Silicon Motion was up
10.779% this morning after today's earnings call in which the company
reported a 48% increase in sales and an EPS increase to $0.47, which
was in line with the Street's expectations. In today's conference call, the
company stated that it now has two strong engines of growth thanks
to its acquisition of FCI. Going forward, the company anticipates that
approximately one-third of its revenue will come from communications,
and two-thirds from storage. The FCI acquisition should account for apprimately
25% of 2008 revenues. The company's mobile tv segment is
projected to play a major role in its revenues from communications. In
the second half of 2007, mobile TV accounted for 7% of total revenue, a
larger percentage than any other listed company Silicon is aware of. It is
also well positioned in the Korean market, where it owns one-third of the
market share. Launched in 2005, Silicon is now projecting the number
of mobile TV users in Korea to double from 7M to 14M by the end of the
year. It is believed that Silicon's acquisition will bolster the company's
ability to bring mobile TV solutions to market faster in accordance with
that demand. In 4Q, Silicon reported that Samsung was its largest customer,
accounting for over 10% of its overall sales. Although the quarter
was atypical of their normal business with Samsung, it stated that
their partnership with Samsung is gaining momentum, along with other
large customers. In discussing the recent economic slowdown, Silicon
is confident that it can take advantage of the market trend. Said Kou,
"Starting in 2008, lower density platforms will become more popular because
of cheaper and higher density. That is why we believe we will
benefit, especially in the downturn of econimics." Full year revenue for
2007 was 70% higher than 2006. The company also notes a three year
decline--as it predicted--in the rate of Active Server Page (ASP) erotion
from 48% in 2005, to 35% in 2006, to 19% in 2007. According to Kou,
this decline is the result of increasing barriers to entry, and the economy
of scale is increasing its importance in the flash controller business for
three reasons. The first is due to increasing R&D needed to keep up
with non flash technology advancements, the second relates to more
engineering support needed for partners with product introduction, and
the third involves an increasing proliferation of electronic devices using
flash cards that need compatibility. Given the rising demands, the company
appears to be well positioned for the year ahead.