Memory controller IC supplier Silicon Motion Technology expects its revenues to increase 5-10% sequentially in the second quarter of 2017, with gross margin ranging from 48.5% to 50.5% and operating margin of 25.5-27.5%.

“We expect our sales to begin to pick up in the second quarter, with anticipated growth from our embedded storage products,“ said Wallace Kou, president and CEO of Silicon Motion. “We continue to believe NAND flash supply will increase more meaningfully in the second half of this year and our business will rebound accordingly.”

Silicon Motion reported revenues for the first quarter of 2017 decreased 12% sequentially to US$127 million. Non-GAAP gross margin and operating margin for the quarter came to 51% and 26.4%, respectively. Net income (non-GAAP) decreased to US$25.1 million or US$0.70 per diluted ADS from net income of US$33.9 million or US$0.95 per diluted ADS (non-GAAP) in the fourth quarter.

“As expected, our sales in the first quarter was affected by seasonal weakness and ongoing tightness in NAND flash availability,” Kou said. “Sales of our client SSD controllers were seasonally weak, our eMMC controllers were seasonally flat and our SSD solutions declined due to NAND flash shortage.”

In addition, Silicon Motion maintained its previous 2017 guidance for revenues and non-GAAP margins. The company expects to post an up to 10% revenue increase on year with gross margin ranging from 49% to 51% and operating margin of 27.5-29.5%.