SEC Filing - Silicon Motion Technology Corporation

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Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

October 28, 2016

Commission File Number: 000-51380

Silicon Motion Technology Corporation

(Exact name of Registrant as specified in its charter)

8F-1, No.36, Taiyuan St.

Jhubei City, Hsinchu County 302

Taiwan

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ¨ No x

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨ No x

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

Not applicable


Exhibits

Exhibit 99.1		Press Release issued by the Company on October 28, 2016.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	SILICON MOTION TECHNOLOGY CORPORATION

Date: October 28, 2016
	By:	/s/ Riyadh Lai
	Name: Riyadh Lai
	Title: Chief Financial Officer

EX-99.1

Exhibit 99.1

Silicon Motion Announces Results for

the Period Ended September 30, 2016

NEWS RELEASE

Financial Highlights


		GAAP		Non-GAAP

•	Net sales	$	158.6 million (13% Q/Q)	$	158.6 million (13% Q/Q)

•	Gross margin		48.8%		48.9%

•	Operating margin		24.3%		28.7%

•	Earnings per diluted ADS	$	0.92	$	1.07

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

TAIPEI, Taiwan and MILPITAS, Calif., October 28, 2016 – Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“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.

¹	Embedded Storage comprises primarily eMMC and client SSD controllers and enterprise and industrial SSD solutions.

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.”

Sales


(in millions, except percentages)	3Q 2016				2Q 2016				3Q 2015
(in millions, except percentages)	Sales		Mix		Sales		Mix		Sales		Mix
Mobile Storage*	$	146.9		93%	$	129.5		92%	$	80.9		85%
Q/Q		13%				25%				14%
Y/Y		82%				83%				12%

Mobile Communications**	$	10.1		6%	$	9.7		7%	$	12.5		13%

Others	$	1.6		1%	$	1.5		1%	$	2.0		2%

Total Revenue	$	158.6		100%	$	140.7		100%	$	95.4		100%
Q/Q		13%				25%				9%
Y/Y		66%				61%				10%

*	Mobile Storage products include Embedded Storage products (eMMC and client SSD controllers and enterprise and industrial SSD solutions) and Expandable Storage products (SD and USB flash drive controllers)

**	Mobile Communications products include mobile TV SoCs and handset transceivers

Key Financial Results


(in millions, except percentages and per ADS amounts)	GAAP						Non-GAAP
(in millions, except percentages and per ADS amounts)	3Q 2016		2Q 2016		3Q 2015		3Q 2016		2Q 2016		3Q 2015
Revenue	$	158.6	$	140.7	$	95.4	$	158.6	$	140.7	$	95.4

Gross profit	$	77.4	$	68.1	$	49.1	$	77.6	$	68.1	$	49.2
Percent of revenue		48.8%		48.4%		51.5%		48.9%		48.4%		51.6%

Operating expenses	$	38.9	$	31.9	$	29.7	$	32.0	$	30.9	$	25.8

Operating income	$	38.5	$	36.2	$	19.4	$	45.5	$	37.2	$	23.4
Percent of revenue		24.3%		25.7%		20.4%		28.7%		26.5%		24.5%

Earnings per diluted ADS	$	0.92	$	0.82	$	0.38	$	1.07	$	0.86	$	0.57

Other Financial Information


(in millions)	3Q 2016		2Q 2016		3Q 2015
Cash and cash equivalents, and short-term investments	$	269.2	$	219.1	$	183.7

Capital Expenditures	$	2.8	$	4.9	$	4.6

Dividend payments	$	5.3	$	5.3	$	5.2

During the third quarter, we had $2.8 million of capital expenditures for the routine purchase of software and design tools.

This quarter, we received $35.0 million in bank financing secured by a $25.0 million restricted deposit. These loans are for accelerating the unwinding of intercompany transactions. We expect to repay the loans within 12 months from our operating cash flow.

Our third quarter cash flows were as follows:

3 months ended September 30, 2016


	(In $ millions)
Net income (GAAP)		32.7
Depreciation & amortization		2.4
Changes in operating assets and liabilities		15.1
Others		4.7

Net cash provided by operating activities		54.9

Acquisition of property and equipment		(2.8	)
Changes in restricted assets		(25.2	)

Net cash used in investing activities		(28.0	)

Dividend		(5.3	)
Loans		35.0

Net cash provided by financing activities		29.7

Effects of changes in foreign currency exchange rates on cash		0.5

Net increase in cash and cash equivalents		57.1

Returning Value to Shareholders

On October 24, 2016, the Board of Directors of the Company declared a $0.80 per ADS annual dividend to be paid in quarterly installments of $0.20 per ADS. Because of our strong business outlook and improvements in free cash flow, our Board raised our annual dividend from last year’s $0.60 per ADS.

On August 5, 2016, we paid $5.3 million to shareholders as the fourth installment of our previously announced annual dividend, which was declared on November 2, 2015.

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.”

For the fourth quarter of 2016, management expects:


	GAAP	Non-GAAP Adjustment	Non-GAAP
Revenue	$136.4m to $144.3m -14% to -9% Q/Q	—	$136.4m to $144.3m -14% to -9% Q/Q
Gross margin	48.5% to 50.5%	Approximately $0.2m*	48.5% to 50.5%
Operating margin	19% to 21%	Approximately $8.7m to 9.1m**	25% to 27%

*	Gross margin (non-GAAP) excludes $0.2 million of stock-based compensation.

**	Operating margin (non-GAAP) excludes $0.5 million of amortization of intangible assets, $0.3 million of restructuring expenses, and $7.9 million to $8.3 million of stock-based compensation.

Conference Call & Webcast:

The Company’s management team will conduct a conference call at 8:00 am Eastern Time on October 28, 2016.

Speakers

Wallace Kou, President & CEO

Riyadh Lai, CFO

Jason Tsai, Senior Director of Investor Relations and Strategy

CONFERENCE CALL ACCESS NUMBERS:

USA (Toll Free): 1 866 519 4004

USA (Toll): 1 845 675 0437

Taiwan (Toll Free): 0080 112 6920

Participant Passcode: 9414 5523

REPLAY NUMBERS (for 7 days):

USA (Toll Free): 1 855 452 5696

USA (Toll): 1 646 254 3697

Participant Passcode: 9414 5523

A webcast of the call will be available on the Company’s website at www.siliconmotion.com.

Discussion of Non-GAAP Financial Measures

To supplement the Company’s unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude stock-based compensation and other items, including gross profit (non-GAAP), operating expenses (non-GAAP), operating profit (non-GAAP), net income (non-GAAP), and earnings per diluted ADS (non-GAAP). These non-GAAP measures are not in accordance with or an alternative to GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measure. We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

Our non-GAAP financial measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because it is consistent with the financial models and estimates published by many analysts who follow the Company. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with our forecasts, and for benchmarking our performance externally against our competitors. Also, when evaluating potential acquisitions, we exclude the items described below from our consideration of the target’s performance and valuation. Since we find these measures to be useful, we believe that our investors benefit from seeing the results from management’s perspective in addition to seeing our GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

–

the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results;

–

the ability to better identify trends in the Company’s underlying business and perform related trend analysis;

–

a better understanding of how management plans and measures the Company’s underlying business; and

–

an easier way to compare the Company’s operating results against analyst financial models and operating results of our competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each of the adjustments that we incorporate into our non-GAAP measures, as well as the reasons for excluding each of these individual items in our reconciliation of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges related to the fair value of stock options and restricted stock units awarded to employees. The Company believes that the exclusion of these non-cash charges provides for more accurate comparisons of our operating results to our peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact of share-based compensation on its operating results.

Foreign exchange gains and losses consist of translation gains and/or losses of non-US$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-US$ currencies against the US$. We do not use financial instruments to manage the impact on our operations from changes in foreign exchange rates, and because our operations are subject to fluctuations in foreign exchange rates, we therefore exclude foreign exchange gains and losses when presenting non-GAAP financial measures.

Amortization of intangibles assets consists of non-cash charges that can be impacted by the timing and magnitude of our acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.

Litigation expenses consist of legal expenses relating to intellectual property disputes, commercial claims and other types of litigation. While litigation may arise in the ordinary course of our business, we nevertheless consider litigation to be an unusual and unplanned activity and therefore exclude this charge when presenting non-GAAP financial measures.

Acquisition-related expenses consist of direct costs of acquisitions, such as transaction fees, which vary significantly and are unique to each acquisition. The Company does not acquire businesses on a predictable cycle, so we have excluded the effect of these costs when presenting our non-GAAP financial measures.

Restructuring expenses consists of costs relating to the restructuring of our corporate organization according to a formal plan to streamline operations and improve financial performance. The Company does not engage in restructuring activities in the ordinary course of business, so have excluded the effect of these costs when presenting non-GAAP financial measures.

Silicon Motion Technology Corporation

Consolidated Statements of Income

(in thousands, except percentages and per ADS data, unaudited)


	For the Three Months Ended
	Sep. 30, 2015 ($)		Jun. 30, 2016 ($)			Sep. 30, 2016 ($)
Net Sales		95,397		140,686			158,580
Cost of sales		46,285		72,565			81,175

Gross profit		49,112		68,121			77,405
Operating expenses
Research & development		19,628		21,234			25,934
Sales & marketing		5,545		6,351			7,548
General & administrative		3,994		3,797			4,878
Amortization of intangibles assets		526		526			526

Operating income		19,419		36,213			38,519
Non-operating income (expense)
Gain on sale of investments		—		1			—
Interest income, net		506		441			541
Foreign exchange gain (loss), net		220		(488	)		(375	)
Others, net		4		19			28

Subtotal		730		(27	)		194

Income before income tax		20,149		36,186			38,713
Income tax expense		6,969		7,139			5,991

Net income		13,180		29,047			32,722


Earnings per basic ADS	$	0.38	$	0.82		$	0.93
Earnings per diluted ADS	$	0.38	$	0.82		$	0.92

Margin Analysis:
Gross margin		51.5%		48.4%			48.8%
Operating margin		20.4%		25.7%			24.3%
Net margin		13.8%		20.6%			20.6%

Additional Data:
Weighted avg. ADS equivalents²		34,726		35,273			35,308
Diluted ADS equivalents		34,941		35,476			35,539

²	Assumes all outstanding ordinary shares are represented by ADSs. Each ADS represents four ordinary shares.

Silicon Motion Technology Corporation

Reconciliation of GAAP to Non-GAAP Operating Results

(in thousands, except percentages and per ADS data, unaudited)


	For the Three Months Ended
	Sep. 30, 2015 ($)			Jun. 30, 2016 ($)			Sep. 30, 2016 ($)
Gross profit (GAAP)		49,112			68,121			77,405
*Gross margin (GAAP)*		51.5%			48.4%			48.8%
Stock-based compensation expense^(A)		88			2			156
Gross profit (non-GAAP)		49,200			68,123			77,561
*Gross margin (non-GAAP)*		51.6%			48.4%			48.9%

Operating expenses (GAAP)		29,693			31,908			38,886
Stock-based compensation expense^(A)		(3,347	)		(470	)		(6,320	)
Amortization of intangible assets		(526	)		(526	)		(526	)
Litigation expense		(28	)		(9	)		(1	)
Acquisition-related expense		6			—			—
Operating expenses (non-GAAP)		25,798			30,903			32,039

Operating profit (GAAP)		19,419			36,213			38,519
*Operating margin (GAAP)*		20.4%			25.7%			24.3%
Total adjustments to operating profit		3,983			1,007			7,003
Operating profit (non-GAAP)		23,402			37,220			45,522
*Operating margin (non-GAAP)*		24.5%			26.5%			28.7%

Non-operating income (expense) (GAAP)		730			(27	)		194
Foreign exchange loss (gain), net		(220	)		488			375
Non-operating income (expense) (non-GAAP)		510			461			569

Net income (GAAP)		13,180			29,047			32,722
Total pre-tax impact of non-GAAP adjustments		3,763			1,495			7,378
Income tax impact of non-GAAP adjustments		3,105			162			(1,768	)
Net income (non-GAAP)		20,048			30,704			38,332

Earnings per diluted ADS (GAAP)	$	0.38		$	0.82		$	0.92
Earnings per diluted ADS (non-GAAP)	$	0.57		$	0.86		$	1.07

Shares used in computing earnings per diluted ADS (GAAP)		34,941			35,476			35,539
Non-GAAP Adjustments		332			63			244
Shares used in computing earnings per diluted ADS (non-GAAP)		35,273			35,539			35,783


	For the Three Months Ended
	Sep. 30, 2015 ($)		Jun. 30, 2016 ($)		Sep. 30, 2016 ($)

(A) Excludes stock-based compensation as follows:
Cost of Sales		88		2		156
Research & development		2,125		278		4,009
Sales & marketing		604		159		1,038
General & administrative		618		33		1,273

Silicon Motion Technology Corporation

Consolidated Statements of Income

(in thousands, except percentages, and per ADS data, unaudited)


	For the Nine Months Ended
	Sep. 30, 2015 ($)		Sep. 30, 2016 ($)
Net Sales		263,256		411,948
Cost of sales		127,737		209,461

Gross profit		135,519		202,487
Operating expenses
Research & development		51,876		66,367
Sales & marketing		14,037		20,114
General & administrative		10,710		12,024
Amortization of intangibles assets		526		1,577

Operating income		58,370		102,405

Non-operating expense (income)
Gain on sale of investments		2		1
Interest income, net		1,523		1,407
Foreign exchange gain (loss), net		599		(803	)
Others, net		8		47

Subtotal		2,132		652

Income before income tax		60,502		103,057
Income tax expense		13,635		18,274

Net income		46,867		84,783


Earnings per basic ADS	$	1.36	$	2.41

Earnings per diluted ADS	$	1.35	$	2.39


Margin Analysis:
Gross margin		51.5%		49.2%
Operating margin		22.2%		24.9%
Net margin		17.8%		20.6%

Additional Data:
Weighted avg. ADS equivalents		34,408		35,198
Diluted ADS equivalents		34,782		35,476

Silicon Motion Technology Corporation

Reconciliation of GAAP to Non-GAAP Operating Results

(in thousands, except percentages and per ADS data, unaudited)


	For the Nine Months Ended
	Sep. 30, 2015 ($)			Sep. 30, 2016 ($)
Gross profit (GAAP)		135,519			202,487
*Gross margin (GAAP)*		51.5%			49.2%
Stock-based compensation expense^(A)		129			201
Gross profit (non-GAAP)		135,648			202,688
*Gross margin (non-GAAP)*		51.5%			49.2%

Operating expenses (GAAP)		77,149			100,082
Stock-based compensation expense^(A)		(5,066	)		(8,736	)
Amortization of intangible assets		(526	)		(1,577	)
Litigation expense		(93	)		(51	)
Acquisition-related expense		(320	)		—
Operating expenses (non-GAAP)		71,144			89,718

Operating profit (GAAP)		58,370			102,405
*Operating margin (GAAP)*		22.2%			24.9%
Total adjustments to operating profit		6,134			10,565
Operating profit (non-GAAP)		64,504			112,970
*Operating margin (non-GAAP)*		24.5%			27.4%

Non-operating income (expense) (GAAP)		2,132			652
Foreign exchange loss (gain), net		(599	)		803
Non-operating income (expense) (non-GAAP)		1,533			1,455

Net income (GAAP)		46,867			84,783
Total pre-tax impact of non-GAAP adjustments		5,535			11,368
Income tax impact of non-GAAP adjustments		1,984			(2,810	)
Net income (non-GAAP)		54,386			93,341

Earnings per diluted ADS (GAAP)	$	1.35		$	2.39
Earnings per diluted ADS (non-GAAP)	$	1.56		$	2.62


	For the Nine Months Ended
	Sep. 30, 2015 ($)		Sep. 30, 2016 ($)
Shares used in computing earnings per diluted ADS (GAAP)		34,782		35,476
Non-GAAP Adjustments		144		140
Shares used in computing earnings per diluted ADS (non-GAAP)		34,926		35,616

(A) Excludes stock-based compensation as follows:
Cost of Sales		129		201
Research & development		3,242		5,453
Sales & marketing		931		1,646
General & administrative		893		1,637

Silicon Motion Technology Corporation

Consolidated Balance Sheet

(In thousands, unaudited)


	Sep. 30, 2015 ($)		Jun. 30, 2016 ($)		Sep. 30, 2016 ($)
Cash and cash equivalents		182,984		203,420		260,468
Short-term investments		679		15,691		8,683
Accounts receivable (net)		56,432		71,931		61,800
Inventories		50,176		81,542		79,728
Refundable deposits – current		19,531		19,149		44,289
Prepaid expenses and other current assets		4,244		5,417		6,392

Total current assets		314,046		397,150		461,360
Long-term investments		133		133		133
Property and equipment (net)		38,322		48,336		48,726
Goodwill and intangible assets (net)		76,528		74,942		74,423
Other assets		3,945		8,501		11,033

Total assets		432,974		529,062		595,675


Accounts payable		14,077		48,315		38,207
Loans		—		—		35,000
Income tax payable		21,791		16,362		22,148
Accrued expenses and other current liabilities		41,887		49,359		73,308

Total current liabilities		77,755		114,036		168,663
Other liabilities		8,338		16,264		16,766

Total liabilities		86,093		130,300		185,429
Shareholders’ equity		346,881		398,762		410,246

Total liabilities & shareholders’ equity		432,974		529,062		595,675

About Silicon Motion:

We are the global leader in supplying NAND flash controllers for solid state storage devices and the merchant leader in supplying SSD controllers. We have the broadest portfolio of controller technologies and solutions and ship over 750 million NAND controllers annually, more than any other company in the world. Our controllers are widely used in embedded storage products such as SSDs and eMMCs which are found in smartphones, PCs and industrial and commercial applications. We also supply specialized high-performance enterprise and industrial SSD solutions. Our customers include most of the NAND flash vendors, storage device module makers and leading OEMs. For further information on Silicon Motion, visit us at www.siliconmotion.com.

Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, statements about Silicon Motion’s currently expected fourth quarter of 2016 and full year 2016 revenue, gross margin and operating expenses, all of which reflect management’s estimates based on information available at this time of this press release. While Silicon Motion believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts for the fourth quarter of 2016 and full year 2016. Forward-looking statements also include, without limitation, statements regarding trends in the multimedia consumer electronics market and our future results of operations, financial condition and business prospects. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends or our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to the unpredictable volume and timing of customer orders, which are not fixed by contract but vary on a purchase order basis; the loss of one or more key customers or the significant reduction, postponement, rescheduling or cancellation of orders from these customers; general economic conditions or conditions in the semiconductor or consumer electronics markets; decreases in the overall average selling prices of our products; changes in the relative sales mix of our products; our ability to continue to successfully integrate our 2015 acquisition of Shannon Systems; changes in our cost of finished goods; the payment, or non-payment, of cash dividends, including our recently announced increase to our annual dividend, in the future at the discretion of our board of directors; changes in our cost of finished goods; the availability, pricing, and timeliness of delivery of other components and raw materials used in our customers’ products; our customers’ sales outlook,

purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions, its customers and consumers; our ability to successfully develop, introduce, and sell new or enhanced products in a timely manner; and the timing of new product announcements or introductions by us or by our competitors. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed on April 29, 2016. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.



Investor Contact:		Investor Contact:

Jason Tsai		Selina Hsieh
Senior Director of IR and Strategy		Investor Relations
Tel: +1 408 519 7259		Tel: +886 3 552 6888 x2311
Fax: +1 408 519 7101		Fax: +886 3 560 0336
E-mail: jtsai@siliconmotion.com		E-mail: ir@siliconmotion.com

Media Contact:

Sara Hsu
Project Manager
Tel: +886 2 2219 6688 x3509
Fax: +886 2 2219 6868
E-mail: sara.hsu@siliconmotion.com