TAIPEI, Taiwan, Apr 15, 2010 (GlobeNewswire via COMTEX) --Silicon Motion Technology Corporation (Nasdaq:SIMO) (the "Company"), a leading fabless semiconductor company that designs, develops and markets semiconductor solutions for multimedia consumer electronics, today announced that expected revenue in the first quarter of 2010 will be stronger than the Company's previous outlook. In addition, the Company has revised upwards fourth quarter 2009 obsolete inventory reserves and consequently revised downwards its fourth quarter 2009 gross margin.
The Company expects revenue in the first quarter of 2010 to increase sequentially 15% to 16%. This is a positive increase over the guidance provided by the Company in early February 2010 that revenue would be down 5% to up 5% sequentially.
Following the announcement of the Company's unaudited fourth quarter 2009 results and following recent evaluation by the Company of the salability of parts in inventory, the Company now believes that because of rapidly changing market conditions and customer requirements, certain additional elements of its inventory are now obsolete. The reserves for obsolete inventory are considered subsequent events and therefore have been included within the Company's fourth quarter 2009 results. Gross margin excluding stock-based compensation will decrease to approximately 27% to 28% from 42.2%, which was previously disclosed. Fourth quarter 2009 gross margin excluding stock-based compensation and reserves for obsolete and end-of-life products will decrease from 52.1% to 51.5%.
The Company expects first quarter 2010 gross margin excluding stock-based compensation to be in line with its previously communicated guidance of 46% to 48%.
Separately, as previously reported, the Company continues to assess impairment of goodwill and acquisition related intangible assets relating to its 2007 FCI acquisition. The Company anticipates announcing impairment charges in its upcoming earnings release, as well as in its 2009 Annual Report on Form 20-F.
"We are working to put the difficulties caused by the global economic recession behind us and get back to growing our business. We are delighted with the better than expected availability of NAND flash components, principally 3 bits per cell MLC, available to module makers and the increased procurement by our customers of our best-in-class 3 bits per cell MLC controllers. Our leading market share in 3 bits per cell MLC controllers is validation that our R&D investment in new technologies is paying off," said Wallace Kou, President and CEO of Silicon Motion.
Silicon Motion is planning on releasing its first quarter 2010 results in either the last week of April or the first week of May 2010. Details on this as well as our earnings call will be provided in a separate announcement.