Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 53.88+0.9%4:11 PM EDTNews

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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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