Silicon Motion Technology Corporation (“Silicon Motion” or the “Company”) today announced its financial results for the quarter ended September 30, 2016.  For the third quarter, net sales increased 13% sequentially to $158.6 million from $140.7 million in the second quarter. Net income (GAAP) increased to $32.7 million or $0.92 per diluted ADS (GAAP) from a net income (GAAP) of $29.0 million or $0.82 per diluted ADS (GAAP) in the second quarter.

For the third quarter, net income (non-GAAP) increased to $38.3 million or $1.07 per diluted ADS (non-GAAP) from a net income (non-GAAP) of $30.7 million or $0.86 per diluted ADS (non-GAAP) in the second quarter.

Embedded Storage comprises primarily eMMC and client SSD controllers and enterprise and industrial SSD solutions.

Business Highlights

Embedded Storage1 sales increased over 15% Q/Q and accounted for about 80% of total sales, similar to the previous quarter

Client SSD controller sales increased 25% Q/Q

eMMC controller sales increased over 15% Q/Q

Enterprise and industrial SSD solutions sales increased less than 10% Q/Q

Started to ship PCIe NVMe SSD controllers to one flash partner and one module maker

Secured PCIe NVMe SSD controller design-wins with nearly 10 customers

Third Quarter 2016 Review

“Third quarter sales exceeded our original expectations due to continuing strong demand for our client SSD and eMMC controllers, especially from our NAND flash partners,” said Wallace Kou, President and CEO of Silicon Motion. “We are excited that our NAND flash partners have continued to grow their sales of SSDs to PC OEMs and eMMCs to smartphone OEMs. This has led to further expansion of our market shares in both client SSD controllers and eMMC controllers.”

Business Outlook

“We expect our revenue to decline in the fourth quarter.  Our client SSD controller sales should grow further, but will likely be offset by declining sales of card and USB flash drive controllers due to tightness in flash availability and SSD solutions due to project timing,” said Wallace Kou, President and CEO of Silicon Motion. “Year-over-year, our fourth quarter revenue should grow in the range of 39% to 47%, a solid finish for an outstanding year.  We will be exiting the year with a solid pipeline of projects relating to our client SSD controllers, eMMC and UFS controllers and SSD solutions, which we believe will position us for further growth in 2017.”