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   Technology StocksSilicon Motion Inc. (SIMO)

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From: Elroy5/3/2019 12:14:32 AM
1 Recommendation   of 2747
Wow. SIMO reported Q1. Revenues were $95m and they are guiding Q2 to $103m.

But this sentence is in the press release:

For full-year 2019, management believes it is likely that GAAP and Non-GAAP Revenue could be approximately similar to 2018

That means the average of Q3 and Q4 would be $180m? Hard to believe, but I like the news!

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From: Elroy5/4/2019 3:02:22 AM
   of 2747
So....I've listened to the SIMO conference call and read the transcript. Interesting times for SIMO, that's for sure.

Lets see. The Good.....

The sale of FCI seems a good thing. It removes about $18m in annual operating expenses, and should increase gross and operating margins, all else being equal.

SIMO didn't buy any stock in Q1, so they have about $9.50 per share cash plus $1.30 per share coming in from the sale of FCI. Lots of cash.

SSD controllers are expected to grow 25% in Q2, and also grow strongly in H2 2019. This is 55% of sales, and is the growth area. Also, higher margins than other SIMO products. SIMO believes it will gain meaningful market share in SSD controllers in 2019, so the internal threat from WDC and now MU is not bothering them all that much. Seems good.

eMMC/UFS controllers shrunk so much in Q1, perhaps much of the decline of this segment has occurred, in Q1 2019, and it's done shrinking. Manamgement indicated the SK Hynix business would remain flat going forward (from low Q1 levels), UFS would grow (from a small base) and Chinese module makers would grow their eMMC + SIMO controller business strongly. So, maybe this segment has bottomed, and going forward it will move up from the low Q1 2019 level? I guess it's good to get the expected decline all out of the way ASAP. Yeah, 45% sequential decline is pretty awful, so hopefully this is flattish or better going forward.

Open Channel systems with the 2 Chinese hyperscale customers seems to be on track. Revenues commence in Q3 2019 hopefully.
Enterprise controllers will have initial sales in H2 2019 (from zero base) and then grow from 2020 on if the program is successul. Lets see, it may take a while, but this is a big greenfield space for SIMO. In 2020 and 2021 this could be a significant business if they do well.

The Bad....

Chinese procurement of enterprise SSD systems (Shannon, Ferri) are weak due to macro internet weakness in China. Fair enough.

The Unbelievable.

SIMO guided full year revenues to be about flat with 2018. So (excluding FCI) that means Q1 = $89m, Q2 is guided to about $103m, and full year 2018 (excluding FCI) was $500m. So H2 2019 revenues for SIMO need to be ~$300m, or $150m per Q. Seriously? Revenues are going to jump ~50% from Q2 to Q3?

SIMO also says H2 visibility is weaker than normal, and their forecast could be completely wrong.


The good thing is due to the removal of FCI the model looks much better from EPS on a lower revenue level. For Q2 we have

Revenues = $104m.EPS = 59 cents.

And if they actually deliver $150m in Q3 (or Q4) on the same expense level ($27.5m without FCI, we get)

Revenues = $150m, EPS = $1.14

Hmmm, so it doesn't seem like it takes that much to get SIMO's EPS run rate back up to about $3.20 per year. If revenues are $122m per Q, they do about 80 cents EPS.

Well, I don't know what to say about them other than they seem to think a massive SIMO revenue pump is on the horizon, so might as well wait and see what they can do.

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To: Elroy who wrote (2044)5/6/2019 6:33:45 PM
From: jmiller099
   of 2747

Shipments of PC HDDs have been hit the hardest among all types of HDDs due to a combination of general market weaknesses and the transition of notebooks to SSDs. According to Nidec, shipments of PC HDDs decreased gradually from 289 million drives in 2013 to 124 million devices in 2018. However, this year sales of hard drives for PCs will drop sharply, going from 124 million devices in 2018 to 65 million units in 2019, or by around 48%.

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From: Elroy5/8/2019 1:16:40 AM
   of 2747
Strange article. I didn't think NAND flash prices were ever supposed to "rebound". I think the generally either decline slowly (good for NAND makers) or decline quickly (bad for NAND makers). Price increases, or "rebounds" (as we saw in the transition from 2D to 3D flash) are super ucommmon.

NAND flash prices to continue downward trend
Siu Han, Taipei; Jessie Shen, DIGITIMES
Tuesday 7 May 2019

NAND flash prices are showing no signs of rebounding despite optimism about demand recovery in the second half of 2019, according to industry sources.

The sources noted it is generally believed that NAND flash demand for smartphones will be picking up substantially in the second half of 2019. A recovery is also expected to take place in the server and datacenter market in the latter part of this year, playing another catalyst for the memory market growth, the sources continued.

Nevertheless, NAND flash memory prices are expected to continue trending down in the second half of 2019, the sources warned. The prices have already approached cash costs for many manufacturers, but remain under downward pressure, the sources indicated.

This is also hard to believe. Prices may have approached cash costs for NAND produced 9 months ago, but I don't think prices for NAND manufactured today are at cash cost today. The problem is the NAND makers all have lots of old inventory sitting on their balanace sheets.

Global trade conditions are still unfavorable to end-market demand, said the sources, adding that demand from datacenter vendors has also not seen a substantial pick-up. Near-term demand visibility is limited.

NAND flash prices could stop falling in the second half of 2019 if demand from US datacenter vendors pulls in between the latter half of June and July, the sources suggested.

NAND flash prices will continue falling but at a slower pace in the second half of 2019, according to Wallace Kou, president and CEO of Silicon Motion Technology. Falls in the memory prices are expected to narrow to single digits, said Kou.

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From: Elroy5/8/2019 11:37:46 PM
   of 2747
512GB SSDs' Price-per-GB Estimated to Fall Below US$0.1 and Hit an All-time Low This Year End, Says TrendForce

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From: Elroy5/9/2019 6:38:42 AM
1 Recommendation   of 2747
This one is a bit strange. It appears to be SK Hynix announcing some upcoming QLC 4d SSD products, with internally developed controllers. Then the CEO of SIMO is quoted saying "They're great!"??

SK Hynix ships samples of 96-layer 1Tb QLC 4D NAND

SK Hynix has delivered samples of new 1Tb quadruple-level cell (QLC) memory to major SSD controller companies, according to the company.

SK Hynix applies its own QLC technology to 96-layer charge-trap-flash-based 4D NAND flash, said the company, adding that its 96-layer-based 1Tb QLC products will be "in time for the QLC market opening."

Meanwhile, SK Hynix is ??developing its own QLC software algorithm and controller and plans to launch solution products in time to meet client demand, the company indicated.

"We plan to launch our own QLC-based SSD from next year when demand for enterprise QLC NAND is expected to become meaningful," said SK Hynix VP and head of NAND development strategy Han Joo Na in a company statement. "In particular, we intend to establish a solid position in the market for high-density eSSD, which is replacing hard disk drives (HDD), with NAND Flash solutions as large as 16TB (terabytes) or larger."

Also in the same statement, Silicon Motion Technology CEO Wallace Kou noted "we got QLC engineering samples from SK Hynix, and were impressed by its overall performance. The samples meet client SSD product requirements."

Here's another article on the topic......

According to IDC, the proportion of QLC in the NAND Flash market is expected to increase from 3% in 2019 to 22% in 2023, while the eSSD market will grow at a CAGR of 47.9% to rapidly replace HDD during the five-year period.

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From: Elroy5/15/2019 9:06:59 PM
   of 2747
Really hard to understand how all the NAND makers are gearing up to increase production efficiency and production capacity while NAND sales are near multi-year lows, SSDs are not selling, and.......where the demand!?!?!?!

Chipmakers gearing up for transition to 90/96-layer 3D NAND process technology

Major memory chip vendors are on track to enter mass production of 90/96-layer 3D NAND products in the second half of 2019, according to industry observers.

For consumer electronics devices, 90/96-layer 3D NAND node manufacturing will enable more cost efficiency compared to previous-generation 3D technologies. Chipmakers with their more advanced 90/96-layer processes are also eyeing huge opportunities arising from automotive and data center applications, the observers indicated.

On another front, major NAND flash chipmakers have moved to cut back their 64-layer 3D NAND chip output aiming to bring stability to the memory market, the observers noted. The NAND flash market has been oversupplied causing chip prices to fall further.

NAND flash bit shipments climbed over 40% on year in 2018, thanks to chipmakers' transition to 3D NAND from 2D NAND process technology. And with China's Yangtze Memory Technologies (YMTC) planning to move directly to the 128-layer generation, major NAND chip vendors are set to transition to their 128-layer 3D NAND processes in the second half of 2020, according to the observers.

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From: Elroy5/28/2019 4:50:21 AM
   of 2747
Phison positive about SSD demand in 3Q19

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From: Elroy5/28/2019 9:04:05 PM
   of 2747
hmmm, portable SSDs? I guess this is intended to help external hard disk storage be replace by ... external SSD storage? Ok, good luck with that....

Silicon Motion introduces the First Single Chip Controller for Cost Effective USB Portable SSDs

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To: Elroy who wrote (2051)5/28/2019 10:40:58 PM
From: jmiller099
   of 2747
I like my USB portable SSD. Able to run virtual machine images from it. USB Flash drives are impossible.

Also, when reading reviews for the products it is also a nice use case for photographers to use for high speed access to large RAW images or video files for final processing.

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