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   Technology StocksSilicon Motion Inc. (SIMO)


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To: Maurice H. Norcott who wrote (2553)5/31/2022 4:50:34 PM
From: Sam
1 Recommendation   of 2619
 
But SIMO can't run the company for MXL until the takeover actually happens. In the meantime, they should run it for their stockholders. So the dividend should be paid.

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To: Sam who wrote (2554)5/31/2022 7:54:12 PM
From: Elroy
   of 2619
 
But SIMO can't run the company for MXL until the takeover actually happens. In the meantime, they should run it for their stockholders. So the dividend should be paid.

SIMO didn't update next quarter of 2022 guidance when the deal was announced (and then they reported). SIMO also didn't hold their standard conference call and answer questions.

So ..... if you ask me they are running the company now to close the deal, and not solely for the benefit of shareholders. I've heard that it's standard practice in situations like this (you are being acquired) to stop investor communications, and also stop paying dividends. We shall see.

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From: Elroy6/7/2022 10:00:55 PM
1 Recommendation   of 2619
 
there was a MXL presentation at a Stifel conference today:

wsw.com

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From: Elroy6/8/2022 5:07:25 PM
   of 2619
 
Another MXL conference presentation. The MXL CEO gives a decent explanation of MXL, and some reasons for the acquisition.

siliconmotiontechnologycorporation.gcs-web.com

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From: Elroy6/17/2022 7:31:41 PM
   of 2619
 
SIMO share price is down to $84 despite indications that MXL will buy SIMO for $95.50 cash + 0.388 MXL shares per SIMO share.

My hunch is the increase in interest rates perhaps makes the deal less likely to go through? MXL was going to borrow about $3 billion to do the cash portion of the deal. Maybe they will have to pay quite a lot higher interest rate on that loan than anticipated.

Interesting.

If MXL walks away from the deal they need to pay SIMO $160m break up fee. That's not too shabby.

There are still at least 8 months before the deal closes, and I guess rates could go anywhere in the meantime, but it seems like interest rates are going up, and I imagine at some point there is an interest rate that makes this deal unattractive to MXL......maybe, hard to say! The cash generation of the two companies probably won't be affected much by increased interest rates, so even if the interest rate on the loan is higher than expected MXL's ability to pay down the loan should be similar.

Interesting interesting. My guess is the deal goes through, but the market seems to be having increased concerns that it may not.

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From: franklin16/23/2022 12:49:01 PM
   of 2619
 
From Seeking Apha

Silicon Motion And MaxLinear: Deal Not Done As Hurdles Remain In The Way

Jun. 16, 2022 8:59 AM ET Silicon Motion Technology Corporation (SIMO) MXL 4 Comments6 Likes

SummarySIMO grew sales and profits by double digits in Q1, but that was not the reason why the stock has soared higher, outperforming most.MXL intends to acquire SIMO, but longs should expect difficulties in getting the deal through for a couple of reasons.If the deal does not go through, the stock is likely to get punished due to current market conditions, especially with end-use demand going down.The deal may or may not go through as proposed, but it is still worth holding on to SIMO, provided one can stomach short-term setbacks.

It's been over a month since Silicon Motion Technology Corporation (NASDAQ: SIMO) jumped 17% in one day. The big gain coincided with the release of the Q1 earnings report, but that was not the reason for the move. The quarterly report got overshadowed by news that SIMO and MaxLinear ( MXL) agreed to merge the two together. However, it will take some time and effort for the deal to be completed, assuming of course it gets that far as the deal will need to overcome a couple of hurdles. Why will be covered next.

MXL wants SIMOBulls got a pleasant surprise when word got out that MXL is looking to acquire SIMO in a cash and stock transaction valued at $3.8B or $114.34 per ADS. Shareholders of SIMO can expect to get 0.388 share of MXL stock for each ADS, plus $93.54 in cash. MXL hopes to close the transaction in the first half of 2023.

The deal would bring together two companies that are focused on different markets, yet similar in size. The table below lists some of the multiples for SIMO and MXL. In general, SIMO trades at lower valuations than MXL. On the other hand, one could argue that is justified with MXL's greater reliance on the enterprise, unlike SIMO which is more exposed to the more fickle consumer side of things.

SIMO

MXL

Market cap

$3.14B

$3.02B

Enterprise value

$2.91B

$3.17B

Revenue ("ttm")

$981.7M

$947.0M

EBITDA

$284.5M

$189.5M

Trailing P/E

14.08

40.22

Forward P/E

11.62

17.73

PEG ratio

0.09

-

P/S

3.14

2.93

P/B

4.86

5.30

EV/sales

2.96

3.25

Trailing EV/EBITDA

10.22

16.74

Forward EV/EBITDA

8.41

7.86


Source: Seeking Alpha

Why SIMO may be under pressure to complete a dealSome may have been surprised by SIMO's decision to sell the company. After all, SIMO has done very well recently in terms of sales and profit growth. However, there are signs of a market slowdown, if not an outright downturn, may be on the horizon. SIMO is basically a supplier of NAND flash memory controllers for solid-state storage devices. As such, SIMO is heavily exposed to the smartphone and PC markets, both of which are currently faced with falling demand.

There are some indications this reduction in end-market demand has made its way back to SIMO. Quarterly revenue had increased sequentially for five consecutive quarters, but this came to an end in Q1 FY2022. Q1 revenue increased by 32.7% YoY to $242M, but it also represented a decline of 8.4% QoQ. GAAP EPADS increased by 63.3% YoY to $1.60 and non-GAAP EPADS increased by 55% YoY to $1.72, both less than in the preceding quarter. The table below shows the numbers for Q1 FY2022.

(GAAP)

Q1 FY2022

Q4 FY2021

Q1 FY2021

QoQ

YoY

Revenue

$241.978M

$264.357M

$182.399M

(8.47%)

32.66%

Gross margin

52.1%

49.6%

50.0%

250bps

210bps

Operating margin

27.4%

27.3%

24.3%

10bps

310bps

Operating income

$66.362M

$72.148M

$44.392M

(8.02%)

49.49%

Net income

$54.502M

$60.635M

$34.400M

(10.11%)

58.44%

EPADS

$1.60

$1.73

$0.98

(7.51%)

63.27%

(Non-GAAP)

Revenue

$241.978M

$264.357M

$182.399M

(8.47%)

32.66%

Gross margin

52.2%

49.9%

50.7%

230bps

150bps

Operating margin

29.8%

30.9%

26.6%

(110bps)

320bps

Operating income

$72.032M

$81.620M

$48.538M

(11.75%)

48.40%

Net income

$58.945M

$67.592M

$38.659M

(12.79%)

52.47%

EPADS

$1.72

$1.91

$1.11

(9.95%)

54.95%


Source: SIMO Form 6-K

It may be too early to tell, but it would not be the first time for SIMO to be faced with a downturn after an upturn. The flash memory market tends to go through these cycles, which makes it difficult for SIMO to escape the fallout associated with market turns. SIMO may be wise to close a deal while the going is still good. If the market goes down, quarterly numbers could get a lot worse. SIMO would not receive the same valuation that it does now.

Wall Street may not be totally sold on SIMO and MXLThe chart below shows how SIMO shareholders have gained from the proposed transaction. SIMO has suffered in 2022 along with other semis, but the offer from MXL helped erase most of the YTD losses. SIMO is still down 6% YTD, but that is better than the semiconductor sector as a whole. For instance, the iShares PHLX Semiconductor ETF is down 32% YTD.

Source: finviz.com

On the other hand, MXL has not fared as well. MXL continues to fall, which means the MXL shares SIMO shareholders are supposed to get are losing value. MXL has lost 52% of its value YTD. The price action suggests the proposed transaction is getting the thumbs down from the market. Note also how SIMO is trading below the proposed acquisition price, a sign there are doubts about the deal as proposed.

Source: finviz.com

Why there is reason to doubt the deal will go through as proposedThere is reason to be skeptical. There are a number of hurdles to overcome before the deal can be finalized. For instance, shareholders need to give approval. Some may be reluctant because the offer may not be enticing enough in their eyes. The cash component, for instance, only brought the stock price back to where it was in late 2021 before the deal. There's also the MXL share component, but that one continues to lose value as the stock goes down. One could argue the offer is merely okay, but nothing that blows people away. Shareholder approval is not a given.

More importantly, the deal needs to pass regulatory approval. While SIMO is the market leader in NAND controllers, there are lots of competing suppliers. Most regulators will therefore be less inclined to oppose the deal. Nevertheless, regulatory approval could be difficult to come by in the case of China. Keep in mind that China and the U.S. are in a struggle in the semiconductor market with both trying to increase their share of the market.

The U.S. government has used its position to deny the supply of certain semiconductors to a number of Chinese companies. China has in turn tried to develop its own semiconductor companies, but it still needs access to outside suppliers. Acquisitions are one way to boost domestic suppliers, but many acquisitions in the semiconductor space have come under increased scrutiny.

For instance, the U.S. government has blocked a number of acquisition attempts by China-based entities. Examples include Micron ( MU), Lattice Semiconductor ( LSCC) and, more recently, Magnachip ( MX). From China's perspective, this could be seen as a policy to restrain the development of its own semiconductor industry. Geopolitical considerations have come into play.

In response, China could adopt a policy of limiting U.S. influence by blocking certain acquisitions by U.S. companies, if it hasn't already. While each case differs, China seems to be more willing to approve acquisitions that only involve U.S. semiconductor companies than acquisitions involving a U.S. company and a non-U.S. one. AMD's ( AMD) acquisition of Xilinx is an example of the former and Nvidia's ( NVDA) aborted attempt to acquire ARM is an example of the latter. China approved of the first, but not the second because the latter would increase U.S. standing.

There is an incentive on the part of China to make sure that non-U.S. companies do not come under the control of the U.S. as that would effectively cut them off from China, if the U.S. government chooses to do so. If this is correct, then MXL's intention to acquire SIMO may be dead on arrival as it involves a U.S. company trying to acquire a Taiwanese company, the latter having fairly extensive dealings with China.

Investor takeawaysThe proposal to combine MXL and SIMO has gotten a mixed reaction. On the one hand, a merger makes sense as the two would complement each other. There are several arguments as why a deal could be a good thing. Shareholders would get a significant premium and it would remove the risk of the stock losing value if the market goes south.

On the other hand, the odds of the deal going through as proposed is probably 50/50 and one could argue it is worse than that. There is reason to doubt the deal is a sure thing. There are substantial hurdles to overcome if the deal is to pass muster. While it is by no means the only obstacle in the way, regulatory approval from China may be the hardest to come by.

The reality is that China has encountered great difficulties due to the sway the U.S. government has over much of the semiconductor industry. It's hard to see how letting one more semiconductor company come under the control of the U.S. is in China's best interest. China not giving approval is more likely than not with this in mind.

A previous article from March ended with the conclusion that SIMO was a buy at $70 or so, even though the stock was trending lower. That turned out to be a good move with the stock having gone on a rally, in part due to the offer from MXL valuing SIMO at over $114 per ADS. However, while I remain bullish on SIMO, I would refrain from being a buyer at the moment.

In fact, some may want to lock in profits by taking some chips off the table as there is a high probability the stock loses ground if or when the proposed transaction by MXL encounters pushback, whether from China or some other corner. The fall could be amplified by current market conditions with the stock market struggling and if the quarterly numbers from SIMO get worse due to declining end-use demand.

At the same time, it is worth holding onto SIMO. There is still an outside chance of another offer from another party. Not only would there be a higher price, which may please those who feel the current offer is not good enough, but China is more likely to approve a deal if it is done by a non-U.S. company, removing a key reason to raise objections.

In addition, SIMO still has good prospects in the long run. The NAND market is growing and it is expected to keep growing in the coming years. For instance, the market for SSD controllers is predicted to expand from $14B to $53B in 2020-2030, which represents a CAGR of 14.4%. SIMO is a good way to ride this market higher as it holds technological leadership in the market.

Bottom line, longs should be prepared for a bumpy road ahead. Lots of things can still happen. The proposed acquisition is not a done deal and it could very well fail, which would almost certainly cause the stock to drop, especially under current conditions. Still, SIMO is worth holding whether the deal with MXL goes through or, more likely, does not.

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From: Sam6/28/2022 8:14:53 AM
   of 2619
 
Silicon Motion Announces Expiration of Hart-Scott-Rodino Waiting Period for MaxLinear’s Proposed Acquisition of Silicon Motion
GLOBENEWSWIRE 8:00 AM ET 6/28/2022

Symbol Last Price Change
83.43 0 (0%)
35.25 0 (0%)
QUOTES AS OF 04:00:00 PM ET 06/27/2022


TAIPEI, Taiwan and MILPITAS, Calif., June 28, 2022 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation(SIMO) (“Silicon Motion”), a global leader in NAND flash controllers for solid state storage devices, today announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), with respect to the previously announced agreement under which MaxLinear, Inc.(MXL) (“MaxLinear”) will acquire Silicon Motion(SIMO) in a cash and stock transaction in which each American Depositary Share (ADS) of Silicon Motion(SIMO), which represents four ordinary shares of Silicon Motion(SIMO), will receive $93.54 in cash and 0.388 shares of MaxLinear(MXL) common stock, and each ordinary share of Silicon Motion(SIMO) will receive $23.385 in cash and 0.097 shares of MaxLinear(MXL) common stock.

The expiration of the HSR waiting period occurred at 11:59 p.m. ET on June 27, 2022, which was a condition to the closing of the pending transaction. The closing of the transaction is subject to the satisfaction of the remaining customary closing conditions, including approval by Silicon Motion’s security holders and the receipt of regulatory approval in the People’s Republic of China.

Cautionary Statement Regarding Forward-Looking Statements

Information provided in this press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Silicon Motion’s and MaxLinear’s current expectations, estimates and projections about the expected date of closing of the proposed transaction and the potential benefits thereof, their businesses and industry, management’s beliefs and certain assumptions made by Silicon Motion(SIMO) and MaxLinear(MXL), all of which are subject to change. The forward-looking statements include, but are not limited to, statements about the expected timing of the Merger, the satisfaction or waiver of any conditions to the proposed Merger, anticipated benefits, growth opportunities and other events relating to the proposed Merger, and projections about Silicon Motion’s business and its future revenues, expenses and profitability, and, in some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “potentially”, “continue,” “could”, “seek,” “see”, “would”, “might”, “continue”, “target” or the negatives of these terms or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control, and are not guarantees of future results, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Although such statements are based on Silicon Motion’s own information and information from other sources Silicon Motion(SIMO) believes to be reliable, you should not place undue reliance on them and caution must be exercised in relying on forward-looking statements. These statements involve risks and uncertainties, and actual results may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, the risk that the transaction may not be completed on the anticipated terms and timing, in a timely manner or at all, which may adversely affect Silicon Motion’s or MaxLinear’s respective business and the price of the ordinary shares, par value $0.01 per share, of Silicon Motion(SIMO), Silicon Motion’s American Depositary Shares (ADSs) and shares of common stock, par value $0.0001, of MaxLinear(MXL) (“MaxLinear Common Stock”); uncertainties as to the timing of the consummation of the transaction and the potential failure to satisfy the conditions to the consummation of the transaction, including the receipt of certain governmental and regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the parties’ businesses and other conditions to the completion of the transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, including the receipt by Silicon Motion(SIMO) of an unsolicited proposal from a third party; the effect of the announcement or pendency of the transaction on the Company’s or MaxLinear’s respective business relationships, operating results, and business generally; the potential that the Company’s security holders may not approve the Merger; expected benefits, including financial benefits, of the transaction may not be realized; integration of the acquisition post-closing may not occur as anticipated, and the combined company’s ability to achieve the growth prospects and synergies expected from the transaction, as well as delays, challenges and expenses associated with integrating the combined company’s existing businesses, may occur; litigation related to the Merger or otherwise; unanticipated restructuring costs may be incurred or undisclosed liabilities assumed; attempts to retain key personnel and customers may not succeed; risks related to diverting attention from the parties’ ongoing business, including current plans and operations; changes in tax regimes, legislation or government regulations affecting the acquisition or the parties or their businesses; economic, social or political conditions that could adversely affect the Merger or the parties, including trade and national security policies and export controls and executive orders relating thereto, and worldwide government economic policies, including trade relations between the United States and China and the military conflict in Ukraine and related sanctions against Russia and Belarus; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as the parties’ response to any of the aforementioned factors; exposure to inflation, currency rate and interest rate fluctuations and risks associated with doing business locally and internationally, as well as fluctuations in the market prices of the parties’ traded securities; potential business uncertainty or adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger; potential negative changes in general economic conditions and market developments in the regions or the industries in which the parties’ operate; the loss of one or more key customers or the significant reduction, postponement, rescheduling or cancellation of orders from one or more customers as a result or in anticipation of the Merger or otherwise; the parties’ respective customers’ sales outlook, purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions; risks associated with the ongoing global outbreak of COVID-19, including, but not limited to, the emergence of variants to the original COVID-19 strain such as the Delta and Omicron variants and related private and public sector measures; Silicon Motion’s ability to provide a safe working environment for employees during the COVID-19 pandemic or any other public health crises, including pandemics or epidemics; Silicon Motion’s and MaxLinear’s abilities to implement their business strategies; pricing trends, including Silicon Motion’s and the MaxLinear’s abilities to achieve economies of scale; uncertainty as to the long-term value of MaxLinear Common Stock; restrictions during the pendency of the proposed transaction that may impact the Company’s or MaxLinear’s ability to pursue certain business opportunities or strategic transactions; and the other risk factors discussed from time to time by Silicon Motion(SIMO) in the most recent Annual Report on Form 20-F and in any subsequent reports on Form 6-K, each of which is on file with or furnished to the Securities and Exchange Commission (the “SEC) and available at the SEC’s website at www.sec.gov. SEC filings for Silicon Motion(SIMO) are available on Silicon Motion’s website at siliconmotion.com. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.

Additional Information and Where to Find It

This communication is being made in respect of the proposed transaction. MaxLinear(MXL) has filed a Registration Statement on Form S-4 with the SEC and Silicon Motion(SIMO) intends to provide to its security holders the Form S-4 and a proxy statement (the “Proxy Statement”) describing the Merger Agreement, the Merger, as well as the procedure for voting in person or by proxy at a meeting of Silicon Motion’s shareholders held for the purpose of seeking shareholder approval of the Merger Agreement, the Merger and transactions contemplated by the Merger Agreement (the “Silicon Motion Meeting”) and various other details related to the Silicon Motion Meeting. The Form S-4 is not complete and may be changed. Once finalized, the Form S-4 and the Proxy Statement will be sent or given to the security holders of Silicon Motion(SIMO) and will contain important information about the proposed transaction and related matters. This communication is not a substitute for the Form S-4 or the Proxy Statement or any other document that have been or may be filed or furnished by Silicon Motion(SIMO) or MaxLinear(MXL) with the SEC or provided to Silicon Motion’s security holders. Investors and security holders are urged to read each of the Form S-4 and the Proxy Statement in its entirety and other relevant documents filed with or furnished to the SEC or provided to Silicon Motion’s security holders in connection with the proposed transaction or incorporated by reference therein when they become available before making any voting or investment decision with respect to the proposed transaction because they will contain important information about the proposed transaction and the parties to the proposed transaction.

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To: Sam who wrote (2560)6/28/2022 10:07:47 AM
From: Elroy
   of 2619
 
Is that a big deal? It sounds like all they need now is Chinese approval, and SIMO shareholder's vote?

The gap between deal close and current price is about 30%, still fairly large.

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From: Elroy7/1/2022 1:09:14 PM
2 Recommendations   of 2619
 
From the MU call

There are consumer demand and inventory-related headwinds impacting the industry and consequently our fiscal Q4 outlook.

Across the industry, there are cost challenges stemming from supply chain and inflationary pressures; however, we continue to expect our cost reductions to outpace those of the industry this year,

Despite COVID-19 control measures in China that created challenges for the global electronics supply chain, Micron’s strong execution enabled record assembly output in fiscal Q3, supporting record quarterly revenue. However, these COVID-19 control measures in China impacted our outsourced assembly and test subcontractors and led to some impact to fiscal Q3 results.

We are also driving a portfolio mix shift toward higher growth and more stable markets. Fiscal 2021’s 55 to 45 revenue split in favor of the more mature mobile, PC and consumer markets is expected to shift, by fiscal 2025, to a 38 to 62 split in favor of the higher growth data center, auto, industrial, networking and graphics markets. Several of these end markets also exhibit more stable profitability. Our fiscal Q3 new product launches and customer qualifications reflect solid execution toward this portfolio transformation.

Data center fiscal Q3 revenue grew by a double-digit percentage sequentially and well over 50% year-over-year. Data center end demand is expected to remain strong in the second half of calendar 2022, driven by robust cloud CapEx growth. Despite the strong end demand, we are seeing some enterprise OEM customers wanting to pare back their memory and storage inventory due to non-memory component shortages and macroeconomic concerns.

In fiscal Q3, we achieved client revenue growth in the mid-teens percentage range sequentially, driven by DRAM shipments and share gains in client SSD.

A number of factors have impacted consumer PC demand in various geographies. As a consequence, our forecast for calendar 2022 PC unit sales is now expected to decline by nearly 10% year-over-year from the very strong unit sales in calendar 2021. This compares to an industry and customer forecast of roughly flat calendar 2022 PC unit sales at the start of this calendar year.

Smartphone unit sales expectations have declined meaningfully for calendar 2022. We are now projecting smartphone unit volume to decline by mid-single-digits percent range year-over-year in calendar 2022, well below the industry and customer expectation earlier in the year of mid-single-digit percentage growth.

Near the end of fiscal Q3, we saw a significant reduction in near-term industry bit demand, primarily attributable to end demand weakness in consumer markets, including PC and smartphone. These consumer markets have been impacted by the weakness in consumer spending in China, the Russia-Ukraine war, and rising inflation around the world.

COVID-19 control measures in China have exacerbated supply chain challenges for some customers, and the macroeconomic environment is also creating some caution amongst certain customers. Several customers, primarily in PC and smartphone, are adjusting their inventories, and we expect these adjustments to take place mostly in the second half of calendar 2022.

Fiscal Q3 NAND revenue was $2.3 billion, representing 26% of Micron’s total revenue. NAND revenue increased 17% sequentially and was up 26% year-over-year. Sequential bit shipments increased in the high-teens percent, and ASPs declined slightly.

We achieved record SSD revenue, with both data center and client SSD revenues reaching all-time highs.

Now turning to our outlook for the fiscal fourth quarter. Long-term demand trends remain constructive; however, select market weakness and macroeconomic uncertainty are impacting our near-term outlook and visibility. Currently, we do project sequential bit shipments to be down for both DRAM and NAND in fiscal Q4.

Q: Sanjay, I’m curious, do you think this Q4 outlook is the bottom of the cycle, or do you think the risks can extend into Q1? Because you mentioned that the consumer headwinds could continue to play out during the second half of the calendar year and also because cloud inventory is at elevated levels. So, I guess, my specific question as much as I realize you don’t guide out more than a quarter is, do you think Q1 sales and margins are more likely to be flat, up or down sequentially?

A: we expect these inventory adjustments to be working themselves out over the course of second half of the year. We have pointed out that the inventory adjustments primarily are taking place in PC and the smartphone market.

And I’ll just point out that from the past history as well, that once inventory adjustments begin in a certain part of the segment, then it takes a couple of quarters for them to work out. And here, we, of course, have macroeconomic uncertainties as well. It has been a rapidly changing and uncertain environment. And this is what we have to keep in mind when we look at when does normally see return in terms of demand. And that’s why, just like Mark pointed out here in response to the last question, we will be using inventory to address the demand next year. And we will continue to closely with our customers to understand their overall demand environment.

We think that sometime in fiscal ‘23 is when -- in our fiscal ‘23 is when demand will rebound, but more importantly, it’s really about the supply-demand balance. And with respect to supply-demand balance, you can see, that we are taking actions immediately in terms of curtailing our supply growth for fiscal year ‘23 by sharing the plans with you that we are bringing down our CapEx versus our estimations earlier. So, that’s an important step. And of course, industry has shown that in DRAM that it has CapEx discipline as well. We believe our actions will also contribute toward returning the industry health sooner.

So, I would expect that sometime in our fiscal year ‘23 demand will rebound as well as industry demand supply environment, there’s a store to a healthy level. But again, I will point out that, look, this is a highly uncertain rapidly changing environment. We are, of course, responding fast and -- in terms of any changes we see. So we are not been pointing to any specific quarter at this time.

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From: Elroy7/5/2022 10:43:53 PM
   of 2619
 
I wonder if we will still get the regular SIMO pre-announcement of revenues and gross margins? I sort of doubt it, but who knows?

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