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

January 23, 2017

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 ☒ 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 ☒

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 ☒

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 ☒

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 January 23, 2017.

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: January 23, 2017
	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 December 31, 2016

NEWS RELEASE

Financial Highlights


	4Q 2016 GAAP	4Q 2016 Non-GAAP
• Net sales	$144.2 million (-9% Q/Q, +47% Y/Y)	$144.2 million (-9% Q/Q, +47% Y/Y)
• Gross margin	50.0%	50.2%
• Operating margin	24.2%	30.4%
• Earnings per diluted ADS	$0.73	$0.95

	Full Year 2016 GAAP	Full Year 2016 Non-GAAP
• Net sales	$556.1 million (+54% Y/Y)	$556.1 million (+54% Y/Y)
• Gross margin	49.4%	49.4%
• Operating margin	24.7%	28.2%
• Earnings per diluted ADS	$3.12	$3.64

Business Highlights

•

Embedded Storage¹ sales decreased approximately 10% Q/Q and accounted for about 80% of total sales, similar to the previous quarter

•

Client SSD controller sales increased over 5% Q/Q

•

eMMC controller sales decreased over 5% Q/Q

•

SSD solutions sales decreased over 40% Q/Q

•

Our flash partner began sampling with leading smartphone OEMs their UFS embedded memory with our controller

•

Introduced our Shannon Systems ultra-high performance 12.8TB PCIe SSD with 3D NAND for Chinese hyperscalers

TAIPEI, Taiwan and MILPITAS, Calif., January 24, 2017 – Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon Motion” or the “Company”) today announced its financial results for the quarter ended December 31, 2016. For the fourth quarter, net sales decreased 9% sequentially to $144.2 million from $158.6 million in the third quarter. Net income (GAAP) decreased to $26.2 million or $0.73 per diluted ADS (GAAP) from a net income (GAAP) of $32.7 million or $0.92 per diluted ADS (GAAP) in the third quarter.

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

For the fourth quarter, net income (non-GAAP) decreased to $33.9 million or $0.95 per diluted ADS (non-GAAP) from a net income (non-GAAP) of $38.3 million or $1.07 per diluted ADS (non-GAAP) in the third quarter.

Fourth Quarter 2016 Review

“Due to continuing strength of our SSD controller business, representing our ninth consecutive quarter of SSD controller growth, we achieved fourth quarter sales that were on the high-end of our expectations,” said Wallace Kou, President and CEO of Silicon Motion. “Strength from our SSD controllers was however offset by seasonally weak eMMC controller sales and SSD Solutions project transitions.”

Sales


(in millions, except percentages)	4Q 2016						3Q 2016						4Q 2015
(in millions, except percentages)	Sales			Mix			Sales			Mix			Sales			Mix
Mobile Storage*	$	130.3			90	%	$	146.9			93	%	$	87.5			89	%
Q/Q		-11	%					13	%					8	%
Y/Y		49	%					82	%					34	%
Mobile Communications**	$	12.5			9	%	$	10.1			6	%	$	8.8			9	%
Others	$	1.4			1	%	$	1.6			1	%	$	1.7			2	%

Total revenue	$	144.2			100	%	$	158.6			100	%	$	98.0			100	%
Q/Q		-9	%					13	%					3	%
Y/Y		47	%					66	%					22	%

*	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)	4Q 2016			3Q 2016			4Q 2015			4Q 2016			3Q 2016			4Q 2015
Revenue	$	144.2		$	158.6		$	98.0		$	144.2		$	158.6		$	98.0
Gross profit	$	72.1		$	77.4		$	49.0		$	72.3		$	77.6		$	49.1
Percent of revenue		50.0	%		48.8	%		50.0	%		50.2	%		48.9	%		50.1	%
Operating expenses	$	37.3		$	38.9		$	31.0		$	28.5		$	32.0		$	25.3
Operating income	$	34.9		$	38.5		$	18.1		$	43.8		$	45.5		$	23.9
Percent of revenue		24.2	%		24.3	%		18.4	%		30.4	%		28.7	%		24.4	%
Earnings per diluted ADS	$	0.73		$	0.92		$	0.38		$	0.95		$	1.07		$	0.55

Other Financial Information


(in millions)	4Q 2016		3Q 2016		4Q 2015
Cash and cash equivalents, and short-term investments	$	277.8	$	269.2	$	185.2
Bank loans	$	25.0	$	35.0		—
Capital expenditures	$	2.5	$	2.8	$	14.4
Dividend payments	$	7.1	$	5.3	$	5.2
Loan repayments	$	10.0		—		—

During the fourth quarter, we had $2.1 million of capital expenditures for the routine purchase of software and design tools. In this quarter, after loan repayments of $10.0 million, we had $25.0 million of bank loans outstanding.

Our fourth quarter cash flows were as follows:


3 months ended December 31, 2016
	(In $ millions)
Net income (GAAP)		26.2
Depreciation & amortization		2.7
Changes in operating assets and liabilities		(3.1	)
Others		9.0

Net cash provided by operating activities		34.8

Acquisition of property and equipment		(2.5	)
Changes in restricted assets		0.1

Net cash used in investing activities		(2.4	)

Dividend		(7.1	)
Loans		(10.0	)

Net cash used in financing activities		(17.1	)

Effects of changes in foreign currency exchange rates on cash		(1.3	)

Net increase in cash and cash equivalents		14.0

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. On November 17, 2016, we paid $7.1 million to shareholders as the first installment of our annual dividend.

Business Outlook

“For full year 2017, we expect sales of our client SSD controllers to continue growing strongly, but NAND flash availability will affect our SSD Solutions,” said Wallace Kou, President and CEO of Silicon Motion. “NAND flash tightness will start affecting our SSD Solutions beginning in the first quarter. Additionally in the first quarter, our client SSD controllers will decline seasonally, with growth restarting in the following quarter.”

For the first quarter of 2017, management expects:


	GAAP	Non-GAAP Adjustment	Non-GAAP
Revenue	$121m to $128m -16% to -11% Q/Q +7% to +14% Y/Y	—	$121m to $128m -16% to -11% Q/Q +7% to +14% Y/Y
Gross margin	48% to 50%	Approximately $0.1m*	48% to 50%
Operating margin	20% to 22%	Approximately $3.7m to 4.2m**	23% to 25%

*	Gross margin (non-GAAP) excludes $0.1 million of stock-based compensation.

**	Operating margin (non-GAAP) excludes $0.5 million of amortization of intangible assets, and $3.2 million to $3.7 million of stock-based compensation.

For the full year 2017, management expects:


	GAAP	Non-GAAP Adjustment	Non-GAAP
Revenue	$556m to $612m 0% to +10% Y/Y	—	$556m to $612m 0% to +10% Y/Y
Gross margin	49% to 51%	Approximately $0.5m*	49% to 51%
Operating margin	24.4% to 26.4%	Approximately $17.2m to 19.2m**	27.5% to 29.5%

*	Gross margin (non-GAAP) excludes $0.5 million of stock-based compensation.

**	Operating margin (non-GAAP) excludes $2.1 million of amortization of intangible assets, $0.6 million of litigation expense, and $14.5 million to $16.5 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 January 24, 2017.

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: 4750 3600

REPLAY NUMBERS (for 7 days):

USA (Toll Free): 1 855 452 5696

USA (Toll): 1 646 254 3697

Participant Passcode: 4750 3600

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 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.

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.

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.

Impairment of long-term investments relates to the other-than-temporary, non-operating write down of the Company’s minority stake investments. We do not consider these investments, which were made before 2007, to be strategic and exclude the performance of these investments when evaluating our ongoing performance and forecasting our earnings trends, and therefore excluding losses (and gains) from the investments 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
	Dec. 31, 2015 ($)			Sep. 30, 2016 ($)			Dec. 31, 2016 ($)
Net Sales		98,041			158,580			144,198
Cost of sales		49,028			81,175			72,080

Gross profit		49,013			77,405			72,118
Operating expenses
Research & development		19,281			25,934			26,038
Sales & marketing		6,136			7,548			5,651
General & administrative		5,008			4,878			5,048
Amortization of intangibles assets		526			526			526

Operating income		18,062			38,519			34,855
Non-operating income (expense)

Gain on sale of investments		1			—			—
Interest income, net		455			541			623
Foreign exchange gain (loss), net		(523	)		(375	)		112
Impairment of long-term investments		—			—			(13	)
Others, net		—			28			(4	)

Subtotal		(67	)		194			718

Income before income tax		17,995			38,713			35,573
Income tax expense		4,614			5,991			9,416

Net income		13,381			32,722			26,157


Earnings per basic ADS	$	0.38		$	0.93		$	0.74
Earnings per diluted ADS	$	0.38		$	0.92		$	0.73

Margin Analysis:
Gross margin		50.0	%		48.8	%		50.0	%
Operating margin		18.4	%		24.3	%		24.2	%
Net margin		13.6	%		20.6	%		18.1	%

Additional Data:
Weighted avg. ADS equivalents²		34,875			35,308			35,324
Diluted ADS equivalents		35,288			35,539			35,623

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
	Dec. 31, 2015 ($)			Sep. 30, 2016 ($)			Dec. 31, 2016 ($)
Gross profit (GAAP)		49,013			77,405			72,118
*Gross margin (GAAP)*		50.0	%		48.8	%		50.0	%
Stock-based compensation expense(A)		132			156			199
Gross profit (non-GAAP)		49,145			77,561			72,317
*Gross margin (non-GAAP)*		50.1	%		48.9	%		50.2	%

Operating expenses (GAAP)		30,951			38,886			37,263
Stock-based compensation expense (A)		(5,091	)		(6,320	)		(8,228	)
Amortization of intangible assets		(526	)		(526	)		(526	)
Litigation expense		(36	)		(1	)		(2	)
Acquisition-related expense		(38	)		—			—
Operating expenses (non-GAAP)		25,260			32,039			28,507

Operating profit (GAAP)		18,062			38,519			34,855
*Operating margin (GAAP)*		18.4	%		24.3	%		24.2	%
Total adjustments to operating profit		5,823			7,003			8,955
Operating profit (non-GAAP)		23,885			45,522			43,810
*Operating margin (non-GAAP)*		24.4	%		28.7	%		30.4	%

Non-operating income (expense) (GAAP)		(67	)		194			718
Foreign exchange loss (gain), net		523			375			(112	)
Impairment of long-term investments		—			—			13
Non-operating income (expense) (non-GAAP)		456			569			619

Net income (GAAP)		13,381			32,722			26,157
Total pre-tax impact of non-GAAP adjustments		6,346			7,378			8,856
Income tax impact of non-GAAP adjustments		(76	)		(1,768	)		(1,147	)
Net income (non-GAAP)		19,651			38,332			33,866

Earnings per diluted ADS (GAAP)	$	0.38		$	0.92		$	0.73
Earnings per diluted ADS (non-GAAP)	$	0.55		$	1.07		$	0.95

Shares used in computing earnings per diluted ADS (GAAP)		35,288			35,539			35,623
Non-GAAP Adjustments		205			244			201
Shares used in computing earnings per diluted ADS (non-GAAP)		35,493			35,783			35,824


	For the Three Months Ended
	Dec. 31, 2015 ($)		Sep. 30, 2016 ($)		Dec. 31, 2016 ($)

(A) Excludes stock-based compensation as follows:
Cost of Sales		132		156		199
Research & development		3,323		4,009		5,076
Sales & marketing		859		1,038		1,476
General & administrative		909		1,273		1,676

Silicon Motion Technology Corporation

Consolidated Statements of Income

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


	For the Year Ended
	Dec. 31, 2015 ($)			Dec. 31, 2016 ($)
Net Sales		361,297			556,146
Cost of sales		176,765			281,541

Gross profit		184,532			274,605
Operating expenses
Research & development		71,161			92,405
Sales & marketing		20,173			25,765
General & administrative		15,714			17,072
Amortization of intangibles assets		1,051			2,103

Operating income		76,433			137,260

Non-operating expense (income)
Gain on sale of investments		3			2
Interest income, net		1,978			2,031
Foreign exchange gain (loss), net		76			(692	)
Impairment of long-term investments		—			(13	)
Others, net		10			42

Subtotal		2,067			1,370

Income before income tax		78,500			138,630
Income tax expense		18,249			27,690

Net income		60,251			110,940


Earnings per basic ADS	$	1.75		$	3.15

Earnings per diluted ADS	$	1.73		$	3.12


Margin Analysis:
Gross margin		51.1	%		49.4	%
Operating margin		21.2	%		24.7	%
Net margin		16.7	%		20.0	%

Additional Data:
Weighted avg. ADS equivalents		34,525			35,230
Diluted ADS equivalents		34,909			35,513

Silicon Motion Technology Corporation

Reconciliation of GAAP to Non-GAAP Operating Results

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


	For the Year Ended
	Dec. 31, 2015 ($)			Dec. 31, 2016 ($)
Gross profit (GAAP)		184,532			274,605
*Gross margin (GAAP)*		51.1	%		49.4	%
Stock-based compensation expense(A)		262			400
Gross profit (non-GAAP)		184,794			275,005
*Gross margin (non-GAAP)*		51.2	%		49.4	%

Operating expenses (GAAP)		108,099			137,345
Stock-based compensation expense (A)		(10,157	)		(16,964	)
Amortization of intangible assets		(1,051	)		(2,103	)
Litigation expense		(128	)		(52	)
Acquisition-related expense		(358	)		—
Operating expenses (non-GAAP)		96,405			118,226

Operating profit (GAAP)		76,433			137,260
*Operating margin (GAAP)*		21.2	%		24.7	%
Total adjustments to operating profit		11,956			19,519
Operating profit (non-GAAP)		88,389			156,779
*Operating margin (non-GAAP)*		24.5	%		28.2	%

Non-operating income (expense) (GAAP)		2,067			1,370
Foreign exchange loss (gain), net		(76	)		692
Impairment of long-term investments		—			13
Non-operating income (expense) (non-GAAP)		1,991			2,075

Net income (GAAP)		60,251			110,940
Total pre-tax impact of non-GAAP adjustments		11,880			20,224
Income tax impact of non-GAAP adjustments		1,908			(1,171	)
Net income (non-GAAP)		74,039			129,993

Earnings per diluted ADS (GAAP)	$	1.73		$	3.12


	For the Year Ended
	Dec. 31, 2015 ($)		Dec. 31, 2016 ($)
Earnings per diluted ADS (non-GAAP)	$	2.11	$	3.64

Shares used in computing earnings per diluted ADS (GAAP)		34,909		35,513
Non-GAAP Adjustments		158		155
Shares used in computing earnings per diluted ADS (non-GAAP)		35,067		35,668

(A) Excludes stock-based compensation as follows:
Cost of Sales		262		400
Research & development		6,565		10,529
Sales & marketing		1,790		3,122
General & administrative		1,802		3,313

Silicon Motion Technology Corporation

Consolidated Balance Sheet

(In thousands, unaudited)


	Dec. 31, 2015 ($)		Sep. 30, 2016 ($)		Dec. 31, 2016 ($)
Cash and cash equivalents		180,519		260,468		274,483
Short-term investments		4,681		8,683		3,302
Accounts receivable (net)		58,963		61,800		73,599
Inventories		47,110		79,728		71,873
Refundable deposits – current		19,328		44,289		44,393
Prepaid expenses and other current assets		4,575		6,392		9,236

Total current assets		315,176		461,360		476,886
Long-term investments		133		133		120
Property and equipment (net)		50,469		48,726		47,892
Goodwill and intangible assets (net)		75,990		74,423		73,883
Other assets		3,860		11,033		7,231

Total assets		445,628		595,675		606,012


Accounts payable		22,541		38,207		31,739
Loans		—		35,000		25,000
Income tax payable		13,395		22,148		20,271
Accrued expenses and other current liabilities		52,351		73,308		68,960

Total current liabilities		88,287		168,663		145,970
Other liabilities		12,843		16,766		17,319

Total liabilities		101,130		185,429		163,289
Shareholders’ equity		344,498		410,246		442,723

Total liabilities & shareholders’ equity		445,628		595,675		606,012

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 hyperscale datacenter 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 first quarter of 2017 and full year 2017 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 first quarter of 2017 and full year 2017. 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
E-mail: jtsai@siliconmotion.com		E-mail: ir@siliconmotion.com

Media Contact:

Sara Hsu

Project Manager

E-mail: sara.hsu@siliconmotion.com