Silicon Motion Technology has begun shipping its SATA3 SSD controllers for Micron's Crucial MX500 SSD series and second-generation PCIe NVMe controllers for Intel's 760p series, the company disclosed in a statement announcing its financial results for the fourth quarter of 2017.

Silicon Motion has also started delivering pre-production samples of its open-channel NVMe SSD controllers to a hyperscale data center customer, according to the memory device controller supplier. Cloud data centers will be the next target market of Silicon Motion's SSD offering.

Sales of Silicon Motion's embedded storage products comprising primarily eMMC and client SSD controllers, and data center and industrial SSD solutions increased 10% sequentially to account for about 80% of the company's total revenues in the fourth quarter of 2017.

Among Silicon Motion's embedded storage products, both the client SSD controllers and SSDs solution product lines enjoyed over 15% sales increases on quarter while eMMC controller sales remained stable.

"This quarter, NAND flash industry supply continued to improve and prices continued to soften," said Wallace Kou, president and CEO of Silicon Motion. "Our SSD controller sales to our NAND flash partners rebounded, SSD solutions sales, specifically to our diversified Ferri OEM customers exceeded expectations, and our eMMC controller sales were stable sequentially."

Silicon Motion reported net sales increased 7% sequentially to US$136.2 million in the fourth quarter. Net profits, however, fell to US$9.9 million or US$0.27 per diluted ADS from profits of US$17.6 million or US$0.49 per diluted ADS in the third quarter.

On a non-GAAP basis, Silicon Motion generated net profits of US$28.4 million or US$0.79 per diluted ADS in the fourth quarter compared with profits of US$20.3 million or US$0.57 per diluted ADS in the prior quarter.

For 2017, Silicon Motion's revenues decreased 6% to US$523.4 million with a 48% gross margin. Net profits on a non-GAAP basis came to US$101 million or US$2.81 per diluted ADS.

"This year, we believe that we will benefit from better industry dynamics. As NAND industry supply continues to increase, we expect both NAND cost and prices will fall further," noted Kou. "Our NAND partners are placing more emphasis on their client SSDs because of strong interest by PC and other OEMs in increasing adoption of SSDs, which is highly dependent on how quickly NAND prices fall. We believe NAND prices will fall quickly, but do not have good visibility on this, so our revenue guidance assumes SSD demand based solely on today's NAND prices."

"We will revise our guidance when there is better clarity on market trends," Kou continued. "In Q1, we believe that growth of SSD and eMMC controller sales should be more than offset by seasonal decline of our SSD solutions."

Silicon Motion expects to post a revenue decrease of 3-7% sequentially in the first quarter of 2018, with a 46.5-48.5% gross margin. For all of 2018, the company expects to post 5-10% revenue growth with gross margin to be in the 47% and 49% range.