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From: Elroy7/28/2017 12:39:56 AM
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Lets see what tidbits are in the WDC conference call

Results from our NAND flash products were strong in the midst of a continued constrained supply environment,


Our client devices business grew by 36% year-over-year on a pro forma basis, despite the PC market being slightly weaker than expected in the quarter. This growth was driven by our progress in diversifying our customer base, and continued expansion of our product portfolio with the gains being most pronounced in mobility and client SSD.


In our JV fab operations, we continue the strong ramp on our 64-layer 3D NAND BiCS3 technology during the quarter with a significant portion of our product shipments now using this industry-leading technology. Manufacturing yields of BiCS3 continue to meet our expectations, and we are maintaining our projection for the combined JV output of 64-layer 3D NAND to be the highest in the industry in calendar 2017. Development work on BiCS4, our recently -announced 96-layer 3D NAND technology, is ongoing and we expect to begin sampling in calendar 2017 with meaningful production volumes in calendar 2018.


we continue to believe that the favorable NAND industry conditions will persist at least through the first half of calendar 2018.


Client devices revenue for the June quarter increased 36% year-over-year, primarily driven by significant growth in mobility and client SSDs.


We expect revenue for our September quarter to be approximately $5.1 billion, which would represent approximately 8% year-over-year growth


the reality is that subsequent to when we acquired SanDisk, we have been dealing with very favorable market conditions as it relates to NAND. We all know that supply and demand will even out a bit more and it'll become less of a constrained environment.


As we've stated, our enterprise SSD portfolio, although we have some competitive products, is not all that we would expect it to be.

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From: Elroy7/28/2017 7:11:50 AM
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SIMO - related tidbits in the Sk Hynix conference call:

For NAND Flash, bit shipments fell by 6% quarter-on-quarter, but ASP rose by 8% from the previous quarter thanks to strong prices across all NAND products. There was a general slowdown in smartphone demand coupled with a delay in equipment set up in the second floor of M14.


For MCP, bit shipment fell from the previous quarter as demand slowed down with the clients going into inventory adjustments. ASP rose on the back of rising prices for DRAM and NAND, and growing demand for high density products. Consequently, MCP sales fell quarter-on-quarter, while its portion out of sales stood at 20%.


Meanwhile, in the NAND market, mobile demand was lower than expected due to slowing smartphone demand in the Greater China region and limited density growth coming from the cost burden. For SSD as well, there was slowdown in density growth due to stronger prices. But in the second half, launch of new smartphones with higher density NAND will drive demand for NAND products. Particularly with the leading players expanding their market share, higher hardware specifications for smartphones will become the new norm.

And for client SSD, attach rate is expected to grow as PCs enjoy seasonal demand, but growth in content per box will be limited due to strong prices. As for enterprise SSD, demand for high-density PCIe is growing, mostly for Internet data centers despite the relatively high price. Its adoption is expected to accelerate when supply of products using 3D NAND increases. From supply side, the supply shortage is expected to ease somewhat from the fourth quarter this year. Suppliers continue to increase their 3D NAND production capacity and will start shipping 64 or 72 stack products in the fourth quarter.

As for bit shipment growth, the company is planning low 10% for DRAM and mid-20% for NAND in the third quarter.

Now for the M14, the second floor of M14, now 50% of the space allocated for NAND Flash has been already filled with equipment, and the production would start in the second quarter and it will start contributing to the NAND bit growth in the third quarter of this year.

Now regarding the NAND bit growth, now for the second quarter, let me respond separately for demand and supply. Now for demand, there were some expectations for new products to be launched in the second half, and that is why because of the seasonality, the demand for mobile has dropped a little bit.

And then from the supply side, as was explained earlier, in the course of relocating and increasing the equipment for the second floor of M14, there has been some slight delay.

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From: Elroy7/28/2017 8:08:03 AM
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Show me the money!!!!

On October 24, 2016, the Board of Directors of the Company declared payment of an annual dividend of US$0.80 per ADS1, equivalent to US$0.20 per ordinary share, which will be paid in four quarterly installments of $0.20 per ADS, equivalent to US$0.05 per ordinary share. According to the previously announced record and payment dates, the next quarterly installment will be paid on August 17, 2017 to all shareholders of record on August 7, 2017. Our depository bank’s DR Books will be closed for issuance and cancellation on August 7, 2017.

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To: Acesinthehole who wrote (1720)7/28/2017 10:30:22 AM
From: Elroy
   of 1768
 
We got SK Hynix saying the NAND supply tightness will loosen in Q4.
We got WDC reporting Q2 and falling 7% the next day.

I'm not sure all the signs are that NAND supply will remain tight through next year. WDC says their customers have ordered up through next year, probably because they want to lock in supply, but there were also questions about double ordering and what have you. The tea leaves are starting to shift mildly in SIMO's favor, no idea whether it will continue or not, but the story has always been NAND production will pick up a good bit in H2 2017, and it might happen.

What SIMO really needs is for NAND over production to become clear, and then for the investment community to do the pair trade of short the NAND makers and buy SIMO. THAT would be a nice cycle to go through!

We can only dream......

Did you read the SK Hynix tidbits? Lots of good stuff in their conference call that make the SIMO stumble in Q2 sounds pretty temporary and already over. Hopefully the train gets chugging again after the upcoming conference call.

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From: Elroy7/31/2017 5:16:19 AM
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Demand for high-speed transmissions surges
Cage Chao, Taipei; Jessie Shen, DIGITIMES [Monday 31 July 2017]


Emerging applications arising from IoT, cloud and artificial intelligence (AI) are demanding high-speed transmissions, while high-speed interfaces such as USB, PCI Express (PCIe) and DisplayPort (DP) continue to upgrade. Taiwan-based suppliers engaged in the development of high-speed transmission chips are expected to grow their shipments substantially starting the second half of 2017, according to industry sources.

With the adoption of USB Type-C interface looking to increase among smartphones, particularly those from China-based vendors, related chip suppliers including ASMedia, Weltrend, On-Bright, Etron and Amazing Microelectronic are set to benefit, said the sources. The adoption of USB Type-C is also expected to rise among new notebook models in 2017.

Other interfaces including PCIe and DP have upgraded to provide higher data speeds, and have been supported by Taiwan-based chip suppliers engaged in the server industry supply chain, the sources indicated.

Memory device controller suppliers Silicon Motion Technology and Phison Electronics have both expanded their PCIe SSD offerings to include those for industrial, cloud and car electronics applications, the sources said. Shipments PCIe SSDs are expected to hike starting the second half of 2017.

Mixed-signal IC design house Parade Technologies' embedded DP (eDP) solution has reportedly been adopted by an international vendor for data center applications, the sources noted.

Unlike their larger international peers which focus on core solutions such as CPU, GPU and SoC chips, most Taiwan-based fabless IC firms specialize in PC peripherals and chips, and tend to cooperate with their international rivals. Such a scenario will remain unchanged in the era of IoT, cloud and AI, the sources said.

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From: Elroy7/31/2017 8:01:22 PM
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Yikes, Q3 guidance is a disaster. Revenues declining heading into the seasonally strongest quarter of the year. Bathe only green light is theur guiding Q4 revenues to go up to $145m r so, using the middle of Q3 and Q4 guidance. Shorts seem to like SIMO, I think it's going to tank on thus news, maybe see $30?

Hard to believe the expected Q3 revenue decline is due to tight NAND supply. But I need to see SSD and eMMC/UFS market share info to understand the cause. Have they lost design slots in SSDs? I don't know, to whom?

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From: Elroy7/31/2017 8:40:31 PM
   of 1768
 
TAIPEI, Taiwan and MILPITAS, Calif., Aug. 01, 2017 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation ( SIMO) (“Silicon Motion” or the “Company”) today announced that its Board of Directors has authorized a new program for the Company to repurchase up to $200 million of its ADS over a 12 month period. Separately, Silicon Motion executive officers have notified the Company that they intend to purchase $2.5 million of its ADSs.

“We believe that we are building a great business with a strong foundation of increasing depth and breath of storage products, from differentiated turnkey SSD controllers to unique SSD solutions that address the growing needs of PC OEMs, hyperscaler data centers, automotive OEMs and other applications,” said Wallace Kou, Silicon Motion’s President and CEO. “This year, our business is facing very strong headwind caused by temporary NAND supply tightness. As supply growth accelerates from new 3D NAND capacity coming on line, we believe current headwind will turn to tailwind and our business will rebound.”




====




They've got about $300m cash and $25m debt. I don't want to see them blow through $200m of $300m cash on share repurchases. A token $40m share repurchase would have been fine.




In 2008 they also had a miss and the shares declined. They spent $70m buying stock around $15, then the financial crisis hit and the shares went to $2. They halted the share repurchase to conserve cash, so they were buying at $15 and not buying at a$2.

Oh well, I guess at least it indicates SIMO management believes their current problems are temporary. Time will tell if they're correct. But I think this is going to be a painful 3 months for SIMO shareholders. Next Q I think the results are going to have EPS below 50 cents, so maybe they get 12x $2 + $8 cash as a share price? $30?




Depressing......

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From: Elroy7/31/2017 9:22:31 PM
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So lets see, a few thoughts before the conference call.

I find it hard to believe that NAND tightness alone is causing a year on year decline in sales. It means that there are lower units of client SSDs being sold in 2017 than 2016, which seems amazing. There probably is a decline in merchant made SSDs (as opposed to NAND maker made SSDs), since NAND is expensive and hard to get, so I suppose it's possible. Still, it seems amazing. SIMO's client SSDs grew almost 200% in 2016, and they are going to decline in 2017 due to ....... weak NAND supply? It doesn't quite add up. I wonder if there is market share loss (to MRVL? to whom?) or if there really is a decline in client SSD units.

SIMO's balance sheet ate up $17m of free cash, Inventories jumped a bit (SIMO probably over built and then undersold in Q2), and Accounts Receivable jumped a lot, $17m!! (which usually indicates a back end loaded quarter). Accounts Payable jumped, but by nowhere near as much (about $3m). So it seems SIMO shipped a lot of product out the door in the last two weeks of the quarter. In the past we'd call this stuffing the channel, but SIMO doesn't have much of a channel (most sales are direct) and it's hard to imagine stuffing the channel when product is in very tight supply (low NAND availability). So.....if things sort of roll along as expected, this balance sheet arrangement positions them for huge cash generation quarter in the next Q or 2 since they've already got lots of inventory on hand to sell, revenues next Q are doing down, and they've got a lot of Accounts Receivable to collect. But....in the big picture, this isn't too important to the share price.

Using their Q1/2 actual revenues ($260m in sales) and the middle of Q3 and Q4 forecasts, we get them doing the following

Q3 = $125m
Q4 = $520m minus ($260m + $125m) = $135m

Q4 may be a rebound, but since they did $140m, $167m and $144m in the last three quarters of last year $135m in Q4 doesn't sound too exciting. It is good that Q4 2017 will be up from Q3 2017, but it implies either share loss (to whom??) or a declining market size (which seems hard to believe).

I'm afraid this quarter throws a bucket of cold water on the SIMO story. Are market share reports going to show client SSD units in 2017 declining from 2016 levels? That's hard to believe. However, I haven't heard any reports of NAND makers developing their own client SSD controllers, and MRVL is more focused on the enterprise, so ........ the cause of the year on year decline remains a mystery. But the fact is it's happening, maybe the conference call will provide some clarity.

As for the share repurchase, they've announced $200m? That's wayyyyy too much unless the shares go to $12 or so. That's 1/3rd of their cash position. Management is buying as well. I guess that indicated they believe in the long term SIMO story, which is good, but it doesn't guarantee much. The last time SIMO bought shares was spring 2008, around $15, and then the financial crisis hit and SIMO went to $2. Hopefully this time things are different!

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From: Elroy8/1/2017 7:33:26 AM
   of 1768
 
Something odd about SIMO's Q3 guidance, it implies a big uptick in Operating Expenses

Revenues in the middle of guidance are $125.5m
Gross margin in the middle of guidance is $57.6m

And they say operating margin in the middle of guidance will be ~16%, which is about $20.1m

That means operating expenses need to be $37.5m, which is a big jump from Q2's $32.8m

Oh well, it's just numbers at this point, I'm wondering whether the shares will stay above $30 today.....

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From: Elroy8/1/2017 7:56:01 AM
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I can't believe this. SIMO is actually up a few pennies in pre-market trading.

nasdaq.com

If it holds above $40 today I'll be amazed.....

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