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Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 52.440.0%Dec 14 8:10 PM ESTNews

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To: Acesinthehole who wrote (1714)7/24/2017 8:26:06 PM
From: Elroy   of 1807
 
If true, how would this effect SIMO?


Well, lets see. SIMO gets about 1/3rd of its current revenues by supplying eMMC controllers to SK Hynix. SK Hynix then packages them with NAND and DRAM memory, and sells that module (DRAM + NAND + eMMC controller) to the cell phone companies.


eMMC is near the end of it's life, and is in the process of being replaced by either UFS 2.1 (most cell phone companies) or PCIe NVMI (Apple).


eMMC, UFS 2.1 and PCIe are all connectivity technologies - the way the controller connects to the memory.


So....as the move toward UFS 2.1 progresses we SIMO investors hope that SK Hynix will keep the same structure - Hynix supplies the NAND and DRAM memory, SIMO supplies the UFS 2.1 controller (to Hynix) and SIMO's market share stays. There is concern that SK Hynix may try to design and sell it's own SK Hynix UFS 2.1 controller and either dual source with SIMO, or not buy from SIMO at all for UFS 2.1.


SK Hynix has announced a standalone UFS 2.1 controller. but the mass market high volume sales are in the module format discussed above. SIMO used to say they expect their UFS 2.1 controller to ship in a SK module in H2 2017. Then lately SIMO said that the demand for UFS 2.1 is not there, so adoption in SIMO's target market (low end and mid-range phones) will now occur in 2018.

So.....the article sort of fits with the SIMO story.


The key thing for SIMO is to see production of this module as some point with SK memory and a SIMO UFS 2.1 controller. Until we actually see it shipping, the possibility that SIMO is wrong and SK will use its own interally developed UFS 2.1 controller in the module remains a possibility.


SIMO has a second NAND maker OEM for these modules (probably MU), so if SIMO were to lose SK Hynix in the transition from eMMC to UFS 2.1, it would be bad, but then SK and MU will fight it out in the market, and SIMO will still be involved via MU. But we'd prefer SIMO to supply both SK and MU for UFS 2.1 controllers, because that would probably allow SIMO to gain shares and show better market growth than the smartphone market growth. Two customers are better than one.
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