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Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 57.84-0.7%Dec 6 3:59 PM EST

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To: Elroy who wrote (2569)7/18/2022 3:49:32 PM
From: Elroy  Read Replies (1) of 2747
Based on that negotiation timeline I posted in the previous post, it seems there were a few entities with interest to acquire SIMO. MediaTek was one of the interested buyers, and there was a NAND maker significant customer, and a few private equity shops.'s my take. SIMO will report Q2 on Jul 27, and then the shareholder vote is scheduled for Aug 31st. If a competitive bid is going to appear, it is likely to appear between those two events. So hopefully August may be interesting for us.

I sort of doubt another entity will bid, but I also don't understand why lots of larger semiconductor firms have determined that they don't want to own SIMO. With SIMO's growth forecasts (provided in the deal prospectus) it seems clear that by 2024 SIMO will be close to a monopoly in eMMC and client SSD flash controllers. Their position in UFS controllers is harder to measure, but in eMMC and client SSD SIMO is going to be the leading dominant provider who gets all the profit from those segments. The segments are necessary, very large, and in the case of eMMC modestly growing, and in the case of client PC SSD probably flat, and "other client SSDs (game consoles, autos, other stuff) growing.

Why don't the big semi boys want to own that market? It's on sale now, and once the sale closes, the opportunity to own it lessens quite a bit - you'd have to buy all of MXL to get it, and MXL may be a good semi story, I don't really know, but MXL is not monopolistic in any of its categories, and being monopolistic is the way to go in tech.
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