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Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 39.16+2.2%Sep 28 4:00 PM EDT

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From: Elroy8/30/2019 1:14:31 AM
   of 2181
Comments from MRVL's Q2 conference call yesterday. MRVL is the only major competitor for SIMO in SSD controllers, with MRVL being focused on enterprise while SIMO is focused on client......


Turning to our storage business, storage revenue for the second quarter came in above our expectations at $275 million declining 1% sequentially better than our guidance for mid single-digit sequential decline.

But we benefited from stronger-than-expected demand from a broad set of storage controller customers in the HDD, SSD and fiber channel end markets. It appears that previously elevated inventory levels have slowly started to subside at some our storage controller customers.

Our storage controller team had a very strong showing at the recently concluded Flash Memory Summit, or FMS where we introduced two breakthrough products and NVMe over Fabric Ethernet SSD controller and a family of PCIe Gen 4 NVMe SSD controllers.

Moving on to our outlook for our storage business in the third quarter of fiscal 2020, we expect an increase in demand for our storage controllers from the data center and enterprise markets, especially from high-capacity nearline drives and some additional catching up in the SSD market from the under shipment in prior quarters.

Someone asked why the think their controller sales will not reach the previous MRVL sales peak, and the MRVL response confirms that MRVL has exited the client SSD controller market......this is big for SIMO.

So the simple way to think about it is, and again, understanding we have momentum in that business from a new design win point of view on the markets I mentioned. But if you look at the PC exposed portion, we did a pretty good job on the kind of the first transition I would say, when HDD was converting the SSD. And if you remember over the last few years we've sort of manage that HDD going down by winning new designs in SSD.

We've said even going back to our Analyst Day that, that remaining HDD to SSD conversion and notebooks, which is typically at the lower end. When that conversion happens we're probably not going to benefit from that.
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