NAND flash device controller specialist Silicon Motion Technology expects its revenues for the second quarter of 2018 to register increases of 3-8% sequentially and 1-6% on year, with gross margin ranging from 46.5% to 48.5%.

Silicon Motion reiterated revenues for 2018 are forecast to increase 5-10% on year with gross margin ranging from 47% to 49%.

"We believe our business outlook is increasingly more favorable, especially for our client SSD controller sales," said Wallace Kou, president and CEO of Silicon Motion. "We currently have over 80% more client SSD controller projects with our NAND flash partners than at this time a year ago and currently anticipate our SSD controller sales to grow at least 20% for the full year."

Silicon Motion reported net sales for the first quarter of 2018 decreased 4% sequentially to US$130.3 million. Net income increased to US$23.1 million or US$0.64 per diluted ADS from US$9.8 million or US$0.27 per diluted ADS in the fourth quarter 2017. On a non-GAAP basis, net income for the first quarter decreased to US$25.6 million or US$0.71 per diluted ADS (non-GAAP) from net income of US$28.4 million or US$0.79 per diluted ADS in the prior quarter.

"In the first quarter, sales of our client SSD controllers continued to grow sequentially, and importantly also grew year-over-year," Kou indicated. "In addition, our eMMC controller sales grew as our NAND flash partner rebuilt inventory while our Ferri and Shannon SSD solutions sales declined seasonally."

Sales of Silicon Motion's embedded storage products comprising primarily eMMC and client SSD controllers, and data center and industrial SSD solutions slipped about 1% sequentially to account for about 85% of the company's total revenues in the first quarter of 2018. Sales of client SSD controllers and eMMC controllers increased 10% and 15%, respectively, on quarter while SSD solutions sales decreased over 25%.

Silicon Motion disclosed its client SSD controller projects with NAND flash vendors have surged over 80% on year. The projects involve mainly PCIe NVMe SSD products, Kou noted.

The mainstream spec for client SSDs is transitioning to PCIe NVMe from the current SATA interface, said Kou, adding that demand for PCIe NVMe SSDs is set to boom.

Also in China, demand for PCIe NVMe SSDs is picking up in the DIY segment, Kou added.

In addition, Silicon Motion has started sampling open-channel NVMe SSD controllers for data centers with a second hyperscaler, according to the company.