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From: Elroy9/27/2017 12:59:32 AM
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Lets see what Micron has to say about NAND on their call......

Fourth quarter revenues in our Mobile Business Unit, were driven by a favorable pricing environment and significant growth in our eMCP business. Due to strong execution, sales from our mobile NAND and eMCP solutions nearly doubled year-over-year. We believe that increased DRAM and Flash capacities in flagship smartphones will continue due in part to new applications such as augmented reality in mobile devices. Our roadmap of new LPDRAM, discrete managed NAND and eMCP offerings position us well to address these market requirements.


I don't know who makes the controllers used in MU's eMCP solution. SIMO probably makes the controllers if it's a UFS solution, but I'm not sure whether eMCP means eMMC or also UFS...


During the fourth quarter, we also qualified our first 3D TLC eMCP and eMMC solutions at a major chipset vendor and now have dozens of high-density products in qualification with several OEMs. We expect production shipments to start later in 2017. Our 64-layer 3D TLC UFS products will also start OEM qualifications later in 2017, enabling us to participate in the mobile market’s highest density designs.


The Storage Business Unit recorded a revenue increase of 71% in Q4 compared with the prior year quarter, supported by strong demand for our SSD product portfolio. Late in the fourth quarter, we identified and corrected a flash component issue on select TLC 3D NAND products. We paused shipments of affected products as we worked to implement a solution to the issue, which appeared only under a narrow set of performance conditions. As a result, our SSD revenue declined sequentially during the quarter. Shipments have now restarted and we expect to resume solid sequential SSD revenue growth in Q1.


We continued to garner positive momentum with our SSD products across a broad range of customers. Our flagship SATA 5100 SSD has been qualified at enterprise server OEMs, cloud service providers and Fortune 500 companies. Demand for our client SSDs is also strong, with Micron shipping solutions to most leading PC OEMs. We see healthy demand trends for SSDs moving forward. Client SSD attach rates continue to increase. And although storage density growth has slowed temporarily due to a tight pricing environment, we foresee longer term demand for higher density SSDs.


MU is a SSD controller customer of SIMO's. This description of strong SSD sales doesn't match SIMO's Q3 guidance at all. Maybe MRVL is getting some of MU's client SSD controller business, who knows?


our 64-layer NAND production rollout is proceeding on plan and we expect to achieve mature yields in both technologies before the end of calendar 2017.


Our third-generation 3D NAND development is also proceeding well, with production expected to commence later in 2018.


We expect industry NAND bit supply growth to finish calendar 2017 in the high 30% range. At these levels, supply remains below demand, which has created a constrained environment. As the industry continues to transition to 64-layer 3D NAND, we estimate industry bit supply growth in calendar 2018 will approach the 50% range, which should better satisfy the current unfulfilled demand. We expect that Micron’s ongoing transition to 64-layer 3D NAND in fiscal 2018 will result in bit output growth that is somewhat higher than the industry range.


In fiscal Q4, 64-layer NAND represented mid-teens percent of our trade NAND bit output and we expect to achieve bit output crossover during the second half of our fiscal 2018. The dynamic industry transition to 3D NAND is taking place in the context of a NAND market that has consistently exhibited demand elasticity. We expect this behavior to continue for the foreseeable future as higher-density SSD solutions increasingly displace HDDs in client computing, cloud data centers and enterprise environments and as average capacities continue to grow with more performance-sensitive, storage-hungry devices and applications in mobile and other end markets. These trends support our view that NAND demand drivers will remain healthy into 2018.


Revenue and operating income were slightly lower quarter-over-quarter, due to the NAND component issue that Sanjay discussed earlier. With this issue behind us, we are focused on leveraging the progress we have made in penetrating the SSD markets over the past year. We estimate that our global SSD market share nearly doubled in fiscal 2017, enabling record fiscal year revenue for the Storage Business Unit.


Hmmmm, this is a bit scary. Hopefully the "NAND component issue" wasn't a defective SIMO controller.....


Sales of server and SSD solutions each were more than 3x higher than year ago levels, reflecting our focus toward a higher value-add to revenue mix.


This tells me SIMO is a not a major provider of SSD controllers to Micron. Micron had strong demand for client SSD solutions this quarter, and SIMO will have declining year on year revenues in Q3 2017. If MU's SSD products are up 3x over last year, SIMO should be growing alongside MU, but SIMO grew massively LAST year and is crapping out this year.....


in terms of NAND as it’s well-known that average capacities are increasing certainly in mobile devices, but even more importantly, SSDs are displacing HDDs at the rapid pace with the attach rates continuing to be projected to be going up over the course of next several quarters.


it’s not that this demand is perishable, I mean this demand in terms of the trend of SSDs replacing HDDs in client notebook computers where the attach rate continues to increase in 2017 attach rate of SSDs to PCs is around 35%. That attach rate over the course of next few years continues to grow to around 50% in 2018 and by 2020 timeframe expect it to go to around 75%. So, these demand trends are secular in nature.


we say that our SSD mix was about 20% of our NAND revenue and that consists of our sales of client, two client customers as well as to the hyperscale of cloud and enterprise customers. And both are roughly about the same in both of those categories. Beyond that, we don’t provide further breakdown.


specific to your second question regarding the attach rates in enterprise and server markets, so SSD attach rate is around 50% there in terms of on a SSD per unit basis and opportunity there is greater. Average capacities are definitely moving fairly fast. In fact, enterprise and data center is one of the fastest growth segments for flash in terms of year-over-year bits demand increases that are projected. Average capacities in enterprise and data center for SSDs are over 3 terabyte. That’s average capacity and that trend continues to increase by some projections tripling almost to 9 terabyte by 2020 timeframe. So as I was saying earlier, I mean, these demand trends for increasing attach rate of SSDs in client and data center cloud computing applications as well as the increases in average capacities are secular trends.


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Hmmm, well there are two super interesting SIMO things in the report. The first is that some NAND component caused a major production slowdown for them in the quarter. It's resolved, which is good, but it's possible that SIMO makes the NAND component. Or maybe not. Who knows? The other interesting thing is that MU's SSD solutions tripled year on year, while SIMO revenues in Q2 and Q3 2017 are modestly down from the same quarters of 2016. So......probably MU's SSD business is not a MAJOR customer of SIMO.


The big picture remains exactly was expected. NAND production will one day ramp, SSDs will replace more and more disk drives in PCs, and as long as SIMO holds it's market share in SSD controllers SIMO's revenues should ramp along with SSD penetration. 2018 looks like it could have serious revenue growth for SIMO, unless some unexpected pops up. The long pause of 2017 will end sometime, we're still waiting, but the ramp gets closer and closer each quarter ... we hope!

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From: Elroy9/27/2017 5:14:18 AM
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MediaTek likely to meet high end of 3Q17 guidance


Cage Chao, Taipei; Jessie Shen, DIGITIMES [Wednesday 27 September 2017]



MediaTek is expected to meet the high-end of its sales guidance for the third quarter of 2017, driven by better-than-expected sales of its recently introduced Helio P23 and P30 chips, according to market sources.

MediaTek expects to post revenues of between NT$59.2 billion (US$1.96 billion) and NT$63.9 billion, which will represent a sequential increase of 2-10%. The company saw its August revenues climb to a nine-month high of NT$22.5 billion.

MediaTek recently introduced the Helio P23 and P30 SoC series with both built using 16nm process technology and targeted at mid-range smartphones. There will be two more Helio P-series smartphone SoCs available in 2018, when 12nm will be the main process technology MediaTek's mobile chips will be made using, company co-CEO Rick Tsai said at a July investors meeting.

The upcoming MediaTek's 12nm mobile SoCs will be the Helio P40 and P70 series which are slated for launch in the first quarter of 2018, industry sources were quoted in previous reports.

MediaTek's Helio P series for the mid-range and higher mid-range smartphone SoC market segment will be a major product focus of the company, according to Tsai. MediaTek has also put increased focus on its SoC product lines for emerging IoT and car electronics applications, such as tracking devices for bicycles.

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From: Elroy9/28/2017 12:21:21 AM
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TrendForce Says NAND Flash Market to Regain Balance in 2018 with Annual Bit Supply Growing by 42.9%

technews.co

This kind of news is great for SIMO. Hopefully it's starting now, and continues for the next 18-24 months, bringing a massive crash in NAND prices, and massive jump in NAND deployment EVERYWHERE, and everyone and anyone who invests in memory tech wants to be long SIMO (benefits from excess capacity) and short the NAND makers (suffer from NAND excess capacity).

Hopefully the one year drought on the SIMO share price is over.......

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From: Elroy10/5/2017 9:34:10 PM
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SIMO will likely pre-announce revenues and gross margins Friday morning or Monday morning.

As a reminder the guidance from the Q2 call was for Q3 revenues to be between $122m and $129m, and Q3 gross margins to be between 44.9% and 46.9%.

Both of these numbers are expected to be low points in the cycle, and both should head up from here for the foreseeable future.

We shall see what happens, but if things just go according to expectations SIMO's long year of drought will hopefully come to an end, and we can see revenues, gross margins and share price appreciation return.

All the news about NAND supply in 2018 increasing sufficiently to meet demand is really good for SIMO. In general SIMO's products go into the lower mass market area of the NAND space. When NAND supply is tight (as in the past 4 quarters) the NAND makes dedicate most of their NAND product to their own high margin high end enterprise NAND products, and starve the low end where SIMO is involved. When NAND supply is excessive, all the module makers and cost sensitive product makers can get NAND, and those are the guys that use SIMO controllers. So......hopefully the NAND drought of the last 4 quarters turns into a NAND flood by next summer, and SIMO's revenues respond to the flood surge with their own surge.

But....anything can happen!

We still have the question of whether SK Hynix will go it alone in the transtion from eMMC (currently 100% sourcing controllers from SIMO) to UFS (no commitment to source anything from SIMO) in cell phone connectivity. And we hope SIMO still has Ali Baba as a customer for it's Shannon Enterprise SSDs, maybe Ali Baba has switched providers, who knows?

PC SSDs seem like a slam dunk to do well when NAND production ramps, SIMO has a diverse customer base in that area, but in the other two areas (cell phone eMMC/UFS controllers and Shannon enterprise SSDs) SIMO is highly dependent on ONE customer (Sk in eMMC/UFS and Ali Baba in Shannon), so we gotta hope the relationships with them stay strong.

And the interesting bit is SIMO's discussion of enterprise SSD controllers. They said they have two customers who will begin purchasing product in the latter half of 2017. I don't think the volumes are terribly large in enterprise SSD controllers, and two customers may not move the needle, but who knows? Hopefully enterprise SSD controllers is a new 4th area that grows steadily over time as merchant provider SIMO grabs share from internal controller groups. That's what happened in the client space, I don't see any reason why it won't happen in the enterprise space. SIMO will begin at the low end of the enterprise SSD market, make an inexpensive working product, and move up the technology stack. Hopefully!

And one last wildcard is the Chinese NAND makers. China has committed to entering the 3D NAND production, and I think they are expected to produce and ship 32 layer 3D NAND product that is ~2 years behind the current NAND makers. They will need controllers, SIMO is the logical place to get them. If China can produce 3D NAND, this could be a big story for SIMO in 2018 at some point. Even if the Chinese NAND makers are not profitable, they or their customers will need SIMO NAND controllers to make any final product.

----

If NAND production is going to ramp meaningfully in 2018, short the NAND makers and long SIMO is the way to invest in that trend. Hopefully institutional investors are reading this post!

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From: Elroy10/6/2017 12:17:35 PM
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TAIPEI, Taiwan and MILPITAS, Calif., Oct. 06, 2017 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation ( SIMO) (“Silicon Motion” or the “Company”), a global leader in designing and marketing NAND flash controllers for solid state storage devices, announces that based on its preliminary third quarter financial results, revenue is expected to be within the upper half of the original guidance range of $122 million to $129 million that the company issued on August 1, 2017. Gross margin (non-GAAP) is expected to be near the midpoint of the company's original guidance range of 45.0% to 47.0%.

The Company will release its third quarter 2017 financial results after the market closes on October 26, 2017 and will host a conference call on October 27, at 8 am Eastern Time.

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From: Elroy10/6/2017 12:27:49 PM
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There's nothing special in today's SIMO pre-announcement, but I think others are with me on the view that the just completed Q3 is the bottom for this part of the NAND memory cycle, and from here on out we're over the hill and starting to get production ramps which means controller and revenue ramps for SIMO.

Long SIMO and short the NAND makers seems a good position to be in for the next 12-24 months, we shall see...

SIMO train leaving the station....

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From: Elroy10/6/2017 11:08:12 PM
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SIMO investors seem to like the idea that the fundamental low quarter may be in, and the future looks up from here. By how much, who knows, but if SIMO can just keep it's current design slots it seems like the last four quarters of headwind should turn into a nice tailwind for SIMO. The 2D to 3D NAND transition is at least a year on for most of the NAND makers, and they all should be ramping higher yield production with higher layer count 3D NAND for the next 18 months, and maybe more. And then we'll see if the Chinese will actually be able to make some NAND chips that they can sell, if so those new NAND chips need controllers.

SIMO announced a $200m share repurchase when they did their Q2 conference call at the end of July 2017. I wonder how much they've bought? Perhaps not much. SIMO was $41 when they made the Q2 announcement, lowered expectations for Q3, and announced the buy back. They probably expected the shares to decline due to the weak Q3 revenues guidance, but instead the shares went up to $44 the next day, hovered around $42.50 for a few weeks, and are now $51. They were probably thinking it would be a good idea to buy some stock in the $30's since they expect good things in 2018. It never got there. We'll see. They don't really need to buy shares to support the stock price since the stock has risen on it's own without any unexpected good news. I'd rather have them bump up the dividend than buy back shares if the stock is doing well on it's own without their buyback support. I want the dividend cash for myself!

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From: Elroy10/9/2017 8:20:12 PM
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Last year in October.....

On October 24th SIMO announced an increase in it's quarterly dividend from 15 cents to 20 cents, for each of the next four quarters. Then they announced Q3 results on October 28th.

So.....we may get a dividend increase announcement around October 23rd.

I wonder what SIMO has done in regard to their $200 million share buyback announced about August 1st this year? They've had 2 months to buy back some stock, so if they are going to do it steadily with equal amounts purchased each month, they might have bought back up to $33 million of stock, about 800,000 shares.

But I recall a presentation they made in September at a conference, maybe the Citibank conference. They said that the trigger to buy back stock is near the 52 week low, and it hasn't been that low since the buyback announcement. Maybe they've bought back zero. I wouldn't mind, I'd rather have them increase the dividend than buy back shares. The shares are doing fine without them buying it back themselves, so let them hang on to their cash. If 2018 does have a revenue rebound as expected, I think they'll generate a ton of cash (probably more than $100 million) in the year. I'd love to see them bump the dividend up to 30 cents per Q, and say the share repurchase is still in place but they don't feel the need to buy back shares while the stock is doing a good job of going up in price on it's own.

It seems like SIMO has tailwinds on the horizon, now we just got to hope for no unexpected bad news. If things just go along normally, and SIMO keeps it's design slots it seems like it should just continue to float upward until the next downturn in NAND which is expected, I don't know, a few years from now.....

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From: Sultan10/10/2017 1:21:29 AM
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Loop Capital Raises Silicon Motion Technology Corporation (SIMO) Price Target to $59.00

americanbankingnews.com

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From: Elroy10/11/2017 9:55:29 PM
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SIMO short position declined from about 3.9 million shares on 9/15 to about 3.3 million shares on 9/30.

nasdaq.com

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