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2007/10/30
 

Silicon Motion Announces Third Quarter Results for the Period Ended September 30, 2007: Sales & Net Income Set New Third Quarter Record

Third Quarter 2007

    Financial Highlights:
     -- Net sales increased 44% year-over-year to US$45.8 million, a new
        record high
     -- Gross margin excluding stock-based compensation was slightly higher
        from 2Q07 at 53.2%
     -- GAAP gross margin rose slightly to 53.0%
     -- Operating margin excluding stock-based compensation and acquisition-
        related charges decreased slightly from 32.0% in 2Q07 to 31.7%
     -- Net income excluding stock based-compensation and acquisition-related
        charges increased 45% year-over-year to US$14.0 million in 3Q07, a new
        record high
     -- Diluted earnings per ADS excluding stock-based compensation and
        acquisition-related charges were US$0.40, up 29% from US$0.31 in 3Q06
     -- GAAP diluted earnings per ADS were US$0.30, up 7% from US$0.28 in 3Q06

    Business Highlights:
     -- Total unit shipments increased 57% year-over-year and were flat
        sequentially at 78.5 million units
     -- Microsoft selected the Company's embedded flash controllers for its
        recently launched next-generation flash-based Zune portable media
        player
     -- SSD controller design wins with Smart Modular for its XCeedUltra SATA
        SSD targeting server and enterprise applications, as well as with
        Transcend, A-Data, and PQI for their upcoming SATA SSD products
     -- Flash card controller design wins for Lexar Media's Professional UDMA
        Compact Flash, PNY's Optima Pro Compact Flash, as well as with Japan's
        Hagiwara and Buffalo
     -- USB flash drive design wins with Lexar Media for its JumpDrive and PNY
        for its Attache USB Flash Drive
     -- PC camera SoCs demonstrated strong initial ramp in 3Q07 with almost a
        half a million units sold to Asustek, Quanta, FIC, and other ODMs
     -- A PCS single chip transceiver design win with LG and a CDMA single
        chip transceiver design win with TCL

TAIPEI, Taiwan, Oct. 30 /Xinhua-PRNewswire-FirstCall/ -- Silicon Motion Technology Corporation (Nasdaq: SIMO; "the Company") today announced its third quarter 2007 financial results. Third quarter revenue increased 44% year- over-year to US$45.8 million and GAAP net income increased 13% year-over-year to US$10.0 million, or US$0.30 per diluted ADS, compared to US$0.28 per diluted ADS in the third quarter of 2006.

Non-GAAP net income, which excludes stock-based compensation and acquisition-related charges, increased 45% year-over-year to US$14.0 million, or US$0.40 per diluted ADS, compared to US$0.31 per diluted ADS in the third quarter of 2006.

Commenting on the results, Silicon Motion's President and CEO, Wallace Kou, said:

"As we predicted during our second quarter results announcement, the third quarter was a difficult period for us as well as the overall merchant controller market because customers faced NAND flash shortages. We also noted that shortages were being caused by speculative activities and would be temporary; since early September we have been seeing improving data points such as increasing availability of NAND flash and more realistic prices, which suggest improving business dynamics. During this challenging quarter, we continued to execute well and win important new business, and as a result, we believe we have strengthened our overall market position. Our revenue for the quarter of US$45.8 million, a new 3Q record high, slightly exceeded our initial guidance of US$43 to 45 million."

"We continue to believe in the strong secular growth outlook of the NAND flash industry. It remains one of the fastest growing segments in the broader semiconductor market, and one that will likely continue to surprise with new innovative growth drivers. On the demand side, we expect that increasing affordability will continue to boost the sales of flash cards, USB flash drives, as well as new technologies such as solid state drives and embedded flash controllers. The strength of our advanced technology portfolio, first- class engineering talent, economies of scale, and established track record with customers and NAND flash vendors should continue to position us well for growing market opportunities. Last quarter we announced that we will be supplying embedded SSD controllers for Asustek's eeePC, the world's first notebook PC developed for high volume production using only a SSD. We were therefore thrilled when the eeePC was launched on October 16 and that Asustek expects to sell three to five million units in 2008. The selection of our SSD controller solution by Asustek is validation of the strength of our flash controller technology, which we believe is among the best in the industry. Another validation of our technological capabilities was the selection by Smart Modular of our SSD controller for its XCeedUltra SATA SSD, which targets server and enterprise applications. We are also thrilled that our embedded flash controller business continues to gain traction with leading global OEMs, and are proud that Microsoft selected our embedded flash controller solution for its recently launched next-generation flash-based Zune portable media player. We therefore remain optimistic about our strong market position and business outlook."

Third Quarter 2007 Financial Review(1)

Sales

Net sales in the third quarter totaled US$45.8 million, an increase of 44% from 3Q06 and an increase of 4% compared with 2Q07. Overall unit shipments increased 57% from 3Q06 and were flat from 2Q07. The blended average selling price (ASP) per unit increased 4% from 2Q07.

    Our key products, as percentages of net sales, are as follows:

     As % of Net Sales      4Q05  1Q06  2Q06  3Q06  4Q06  1Q07  2Q07  3Q07
     Mobile Storage          84%   72%   85%   92%   90%   90%   79%   72%
     Multimedia SoCs         16%   27%   14%    8%    9%    9%   12%   11%
     Mobile Communications(2)                                     9%   17%
     Others                   0%    1%    1%    0%    1%    1%    1%    0%
     Total                  100%   00%  100%  100%  100%  100%  100%  100%

Our product mix changed with the acquisition of FCI at the end of April 2007. Mobile storage products, which were 92% of net sales in 3Q06 declined to 72% of net sales in 3Q07. Card controllers, which were almost 80% of our revenue in 3Q06 declined to under 60% in 3Q07. FCI, our mobile communications business, now accounts for 17% of net sales.

Net sales from mobile storage products, which include flash memory card controllers, USB flash drive controllers, and card reader controllers, increased 13% from 3Q06 to US$32.8 million and decreased 6% from 2Q07. Unit shipments increased 43% from 3Q06 and decreased 3% from 2Q07 to 70.7 million units as a result of unfavorable NAND flash market conditions for many of the Company's customers. The ASP per unit in 3Q07 declined by 3% from 2Q07.

Net sales from multimedia SoC products, which include embedded graphics processors, MP3 SoCs, and PC camera SoCs, increased 110% from 3Q06 and were flat from 2Q07 at US$5.2 million. Unit shipments of multimedia SoC products increased over 610% from 3Q06 and increased 27% from 2Q07 to 2.8 million units because of ramping PC camera SoC shipments and continued growth of MP3 SoC volume. The ASP per unit in 3Q07 declined 21% largely because of a shift in product mix towards lower ASP MP3 SoCs and PC camera SoCs from much higher ASP graphics products.

Net sales from mobile communication products, which include mobile TV tuners, CDMA RF ICs, and electronic toll collection (ETC) RF ICs, increased 90% from 2Q07 to US$7.8 million. Unit shipments of communication products increased 57% from 2Q07 to 5.0 million because the Company accounted for three months of revenues in 3Q07 versus two months of revenues in 2Q07 following the completion of the FCI acquisition at the end of April and also because of growth in the mobile TV tuner business and ramping ETC RF IC sales. The ASP per unit in 3Q07 increased 21% largely because of a shift in product mix towards higher ASP mobile TV tuners and ETC RF ICs from lower ASP CDMA RF ICs.

     Unit Shipment            4Q05  1Q06  2Q06  3Q06  4Q06  1Q07  2Q07  3Q07
     (million units)
     Mobile Storage           30.1  20.3  29.0  49.6  62.0  64.1  73.1  70.7
     Multimedia SoCs           0.9   0.5   0.3   0.4   0.6   1.2   2.2   2.8
     Mobile Communications                                         3.2   5.0
     Others                    0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0
     Total                    31.1  20.8  29.3  50.0  62.6  65.3  78.5  78.5

    Margins

Gross margin excluding stock-based compensation was 53.2%, which was slightly higher than 52.9% in 2Q07. GAAP gross margin was 53.0%, also slightly higher than 52.6% in 2Q07.

Operating expense excluding stock-based compensation and acquisition- related charges was 21.5% of net sales, which was higher than 20.8% in 2Q07, mainly due to slightly higher general and administrative expenses. Research and development expenses and selling and marketing expenses, both as percentage of net sales, were unchanged compared to the previous quarter. Stock-based compensation as a percent of net sales was 4.8%, which was slightly lower than 5.4% in 2Q07, largely because of one-time expenses in the previous quarter which relate to the Company's FCI acquisition. Acquisition- related charges declined from $3.8 million in 2Q07 to US$1.7 million because the Company incurred a one-time US$2.1 million in-process research and development expense in 2Q07 that was related to the FCI acquisition.

Operating margin excluding stock-based compensation and acquisition- related charges was 31.7%, which was slightly lower than 32.0% in 2Q07. GAAP operating margin was 23.1%, which was higher than 18.1% in 2Q07.

Earnings

Net income excluding stock-based compensation and acquisition-related charges increased 45% year-over-year to US$14.0 million in 3Q07. Diluted earnings per ADS excluding stock-based compensation and acquisition-related charges were US$0.40, up 29% from US$0.31 in 3Q06.

GAAP net income increased 13% year-over-year to US$10.0 million in 3Q07. Diluted GAAP earnings per ADS were US$0.30, an increase of 7% from US$0.28 in 3Q06.

Business Outlook:

Silicon Motion's President and CEO, Wallace Kou, added:

"We are more optimistic about our current business outlook than compared to three months ago. NAND flash bit growth in the fourth quarter should be much stronger than the third quarter, which should mean improved availability of flash for our customers. Additionally, despite fears that US macro economic issues may affect consumer spending, current indications suggest that handsets and other electronic devices that use our products continue to sell well."

    As a result, for the fourth quarter, Management expects:

     -- Revenue of approximately US$50 -52 million, which represents a
        quarter-over-quarter increase of 9 - 14% and a 40 - 46% increase year-
        over-year
     -- Non-GAAP gross margin(3) to remain in the 52 - 53% range with GAAP
        gross margin also in the 52-53% range
     -- Non-GAAP operating margin(4) to be in the 31 - 32% range with GAAP
        operating margin in the 22 - 23% range

The Company affirms that it expects full year diluted earnings per ADS in 2007, on a non-GAAP basis excluding estimated full year stock-based compensation expenses of US$7.8 - 8.3 million and estimated full year acquisition-related charges of US$6.8 million, to increase from US$1.01 in 2006 to a range of approximately US$1.60 - 1.70, which represents growth of 58 - 68% over the previous year. On a GAAP basis, we expect full year diluted earnings per ADS in 2007 to be in the range of $1.20 - 1.30.

Conference Call & Webcast:

The Company's management team will conduct a conference call at 8:00am Eastern Time on October 31.

    (Speakers)
    Wallace Kou, President & CEO
    Riyadh Lai, CFO

    PRE-REGISTRATION:
    https://www.theconferencingservice.com/prereg/key.process?key=P4G87HKXA

    CONFERENCE CALL ACCESS NUMBERS:
    USA (Toll Free):      +1-888-680-0890
    USA (Toll):           +1-617-213-4857
    Taiwan (Toll Free):   0080-144-4360
    Participant Passcode: 1849 0629

    REPLAY NUMBERS (for 7 days):
    USA (Toll Free):      +1-888-286-8010
    USA (Toll):           +1 617-801-6888
    Participant Passcode: 6699 1300

A webcast of the call will be available on the Company's website at http://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 acquisition-related charges, including, non-GAAP cost of sales, non-GAAP gross profit, non-GAAP selling, general, and administrative expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted ADS. These non-GAAP measures are not in accordance with or an alternative for 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 or these individual items in our reconciliation of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges incurred as a result of the Company's adoption of SFAS 123R relating 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 the application of SFAS 123R has on its operating results.

Intangible amortization 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.

In-process research and development consists of one-time charges incurred in connection with the acquisition of FCI in 2Q 2007 that otherwise would not have been incurred and therefore we have excluded the effects of these charges from our non-GAAP operating income and non-GAAP net income. In-process research and development consists of technology projects which, as of acquisition date, had not yet reached technological feasibility and there are no future alternative uses that exist. We believe it is useful for investors to understand the effect of this expense on our statement of operations. This non-GAAP adjustment is intended to reflect acquisition-related expense incurred that is not directly associated with our continuing operations.

    (1) Unless otherwise stated, all financial information used in this press
        release is unaudited, consolidated, prepared in accordance with US
        GAAP and denominated in New Taiwan dollars.  US dollar amounts are
        translated for convenience only.  Such financial information is
        generated internally and has not been subjected to the same review and
        scrutiny, including internal auditing procedures and audit by
        independent auditors, to which we subject our audited consolidated
        financial statements, and may vary materially from the audited
        consolidated financial information for the same period.  Any
        evaluation of the financial information presented in this press
        release should also take into account our published audited
        consolidated financial statements and the notes to those statements.
        In addition, the financial information presented is not necessarily
        indicative of our results for any future period.
    (2) Revenues from Mobile Communications did not exist prior to the
        acquisition of Future Communications IC, Inc. ("FCI") in the second
        quarter of 2007.
    (3) Excludes estimated fourth quarter stock based compensation expense of
         US$0.1 million.
    (4) Excludes estimated fourth quarter stock-based compensation expense of
        US$2.0-2.5 million and estimated fourth quarter acquisition-related
        charges of US$1.3 million.


                             -- TABLES FOLLOW --



                    Silicon Motion Technology Corporation
                      Consolidated Statements of Income
       (in thousands, except percentages and per share data, unaudited)

                                                 For the Three Months Ended
                                             Sep. 30,     Jun. 30,     Sep. 30,
                                                2006         2007         2007
                                                (NT$)        (NT$)        (NT$)
    Net Sales                              1,036,680    1,446,207    1,497,494
    Cost of sales                            482,295      685,693      704,289
    Gross profit                             554,385      760,514      793,205
    Operating expenses
       Research & development                158,046      200,818      207,997
       Sales & marketing                      48,884       78,846       75,839
       General & administrative               56,987       95,588      107,286
       In-process research and
        development                               --       69,189           --
       Amortization of  intangibles
        assets                                    --       54,472       55,994
    Operating income                         290,468      261,601      346,089

    Non-operating income (expense)
       Gain on sale of investments             4,271        4,886       10,545
       Interest income (net)                  17,744       12,366        9,076
       Foreign exchange gain (loss)           (2,627)      (4,384)      (7,194)
    Investment income                             --          772           --
       Others                                  3,189           18           10
       Subtotal                               22,577       13,658       12,437
    Income before tax                        313,045      275,259      358,256
    Income tax expense                        23,740        2,915       30,523
    Net income                               289,305      272,344      328,003

    Basic earnings per ADS                     $9.38        $8.43       $10.00
    Diluted earnings per ADS                   $9.23        $8.14        $9.66

    Margin Analysis:
    Gross margin                               53.5%        52.6%        53.0%
    Operating margin                           28.0%        18.1%        23.1%
    Net margin                                 27.9%        18.8%        21.9%

    Additional Data:
    Weighted avg. ADS equivalents(5)          30,832       32,312       32,815
    Diluted ADS equivalents                   31,336       33,453       33,942



                                                 For the Three Months Ended
                                             Sep. 30,     Jun. 30,     Sep. 30,
                                                2006         2007         2007
                                                (US$)        (US$)        (US$)
    Net Sales                                 31,732       44,267       45,837
    Cost of sales                             14,763       20,988       21,558
    Gross profit                              16,969       23,279       24,279
    Operating expenses
       Research & development                  4,838        6,146        6,367
       Sales & marketing                       1,496        2,413        2,321
       General & administrative                1,744        2,926        3,284
       In-process research and
        development                               --        2,118           --
       Amortization of  intangibles
        assets                                    --        1,667        1,714
    Operating income                           8,891        8,007       10,593

    Non-operating income (expense)
       Gain on sale of investments               131          150          323
       Interest income (net)                     543          378          278
       Foreign exchange gain (loss)              (80)        (134)        (220)
    Investment income                             --           23           --
       Others                                     97            1           --
       Subtotal                                  691          418          381
    Income before tax                           9582        8,425       10,974
    Income tax expense                           727           89          934
    Net income                                 8,855        8,336       10,040

    Basic earnings per ADS                     $0.29        $0.26        $0.31
    Diluted earnings per ADS                   $0.28        $0.25        $0.30

    Margin Analysis:
    Gross margin                               53.5%        52.6%        53.0%
    Operating margin                           28.0%        18.1%        23.1%
    Net margin                                 27.9%        18.8%        21.9%

    Additional Data:
    Weighted avg. ADS equivalents(5)          30,832       32,312       32,815
    Diluted ADS equivalents                   31,336       33,453       33,942


    (5) 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 share data, unaudited)

                                       For the Three Months Ended
                          Sep. 30, Jun. 30, Sep. 30, Sep. 30, Jun. 30, Sep. 30,
                             2006     2007     2007     2006     2007     2007
                             (NT$)    (NT$)    (NT$)    (US$)    (US$)    (US$)
    GAAP cost of sales    482,295  685,693  704,289   14,763   20,988   21,558
    Adjustment for
     share-based
     compensation            (454)  (3,972)   (3,693)    (14)    (121)    (113)
    Non GAAP cost
     of sales             481,841  681,721   700,596  14,749   20,867   21,445

    GAAP operating
     income               290,468  261,601   346,089   8,891    8,007   10,593
    Adjustment for
     share-based
     compensation
     within:
     Cost of sales            454    3,972     3,693      14      121      113
       Research &
        development        14,483   39,915    35,646     443    1,222    1,092
       Sales & marketing    4,254   14,199    13,584     130      435      416
       General &
        administrative      6,711   19,985    19,642     205      612      601
    In-process research and
     development               --   69,189        --      --    2,118       --
    Amortization of
     intangibles assets        --   54,472    55,994      --    1,667    1,714
    Non-GAAP operating
     income               316,370  463,333   474,648   9,683   14,182   14,529

    GAAP Net income       289,305  272,344   328,003   8,855    8,336   10,040

    Adjustment for
     share-based
     compensation
     within:
    Cost of sales             454    3,972     3,693      14      121      113
       Research &
        development        14,483   39,915    35,646     443    1,222    1,092
       Sales & marketing    4,254   14,199    13,584     130      435      416
       General &
        administrative      6,711   19,985    19,642     205      612      601
    In-process research
     And development           --   69,189        --      --    2,118      --
    Amortization of
     intangibles assets        --   54,472    55,994      --    1,667    1,714
    Non-GAAP Net income   315,207  474,076   456,562   9,647   14,511   13,976

    Diluted earnings per
     ADS:
       GAAP                 $9.23    $8.14     $9.66   $0.28    $0.25    $0.30
     Non-GAAP               $9.97   $13.72    $13.03   $0.31    $0.42    $0.40
    Shares used in
     computing diluted net
     income per share:
     GAAP                  31,336   33,453    33,942  31,336   33,453   33,942
     Non-GAAP              31,619   34,558    35,028  31,619   34,558   35,028

    Gross margin
    GAAP                    53.5%    52.6%     53.0%   53.5%    52.6%    53.0%
    Non-GAAP                53.5%    52.9%     53.2%   53.5%    52.9%    53.2%

    Operating margin
    GAAP                    28.0%    18.1%     23.1%   28.0%    18.1%    23.1%
    Non-GAAP                30.5%    32.0%     31.7%   30.5%    32.0%    31.7%



                    Silicon Motion Technology Corporation
                      Consolidated Statements of Income
      (in thousands, except percentages, and per share data, unaudited)

                                                For the Nine Months Ended
                                     Sep. 30,    Sep. 30,   Sep. 30,   Sep. 30,
                                        2006        2007       2006       2007
                                        (NT$)       (NT$)      (US$)      (US$)
    Net Sales                      2,289,780   4,115,214     70,088    125,963
    Cost of sales                  1,067,683   1,934,478     32,681     59,213
    Gross profit                   1,222,097   2,180,736     37,407     66,750
    Operating expenses
       Research & development        349,413     582,757     10,695     17,838
       Sales & marketing             139,081     215,834      4,257      6,606
       General & administrative      147,939     269,424      4,528      8,247
       In-process research and
        development                       --      69,189         --      2,118
       Amortization of intangible
        assets                            --     110,467         --      3,381
       Subtotal                      636,433   1,247,671     19,480     38,190
    Operating income                 585,664     933,065     17,927     28,560

    Non-operating expense (income)
       Gain on sale of investments    12,590      20,778        385        636
       Interest income (net)          46,337      41,987      1,417      1,285
     Investments income                   --         772         --         24
       Foreign exchange gain (loss)   (1,910)    (13,539)       (58)      (414)
       Others                          4,493          27        138          1
       Subtotal                       61,510      50,025      1,882      1,532
    Income before tax                647,174     983,090     19,809     30,092
    Income tax expense                34,403      56,975      1,053      1,744
    Net income                       612,771     926,115     18,756     28,348

    Basic earnings per ADS          NT$19.90   NT $28.94    US$0.61    US$0.89
    Diluted earnings per ADS        NT$19.57   NT $27.99    US$0.60    US$0.86

    Margin Analysis:
    Gross margin                       53.4%       53.0%      53.4%      53.0%
    Operating margin                   25.6%       22.7%      25.6%      22.7%
    Net margin                         26.8%       22.5%      26.8%      22.5%

    Additional Data:
    Weighted average ADS equivalents  30,769      32,036     30,769     32,036
    Diluted ADS equivalents           31,305      33,121     31,305     33,121


    Note: The Company maintains its accounts and expresses its financial
          statements in New Taiwan dollars.  For convenience only, U.S. dollar
          amounts presented in the income statement have been translated from
          New Taiwan dollars, using an average exchange rate of NT$32.67 to
          US$1 on Sep. 30, 2007,



                    Silicon Motion Technology Corporation
                          Consolidated Balance Sheet
                                (In thousands)
                                 (unaudited)

                                      Dec. 31,   Sep. 30,   Dec. 31,   Sep. 30,
                                         2006       2007       2006       2007
                                         (NT$)      (NT$)      (US$)      (US$)
    Cash and cash equivalents       1,808,042   1,585,464    55,343     48,530
    Short-term investments          1,458,847   1,400,438    44,654     42,866
    Accounts receivable, net          841,764     778,803    25,766     23,838
    Inventories                       427,116     679,057    13,074     20,785
    Refundable deposits - current      65,000     107,442     1,990      3,289
    Deferred income tax assets, net   103,603      88,256     3,171      2,701
    Prepaid expenses and other
     current assets                   244,832     242,127     7,493      7,412
    Total current assets            4,949,204   4,881,587   151,491    149,421

    Long-term investments             170,942     134,111     5,232      4,105
    Property and equipment (net)      319,356     499,870     9,775     15,301
    Goodwill and intangible
     assets(net)                           --   2,440,963        --     74,716
    Other assets                       89,182     232,622     2,730      7,120
    Total assets                   $5,528,684  $8,189,153  $169,228   $250,663

    Accounts payable                  525,173     362,240    16,075     11,088
    Income tax payable                139,268     200,092     4,262      6,125
    Accrued expenses and other
     current liabilities              294,061     461,100     9,002     14,113
    Total current liabilities         958,502   1,023,432    29,339     31,326

    Accrued pension cost                1,018       1,783        31         55
    Other long-term liabilities         1,040      49,647        32      1,520
    Total liabilities                 960,560   1,074,862    29,402     32,901
    Shareholders' equity            4,568,124   7,114,291   139,826    217,762
    Total liabilities &
     shareholders' equity          $5,528,684  $8,189,153  $169,228   $250,663



    About Silicon Motion:

We are a fabless semiconductor company that designs, develops and markets universally compatible, high performance, low-power semiconductor solutions for the multimedia consumer electronics market. We have three major product lines: our mobile storage business, multimedia SoC business, and mobile communications business. Our mobile storage business is our significantly larger business and is composed of microcontrollers, also commonly known as controllers, used in NAND flash memory storage products such as flash memory cards, USB flash drives and card readers. These flash memory storage products are widely used by consumers to store data on multimedia consumer electronics devices such as mobile phones, digital still cameras, personal digital assistants, personal navigation devices and personal multimedia players, and notebook and desktop personal computers. Our multimedia SoC business is composed of products that support MP3 and personal multimedia players, PC cameras and embedded graphics applications. Our mobile communications business is composed of mobile TV tuners, CDMA RF ICs and electronics toll collection RF ICs, which became our new product line as a result of our recent acquisition of FCI.

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 expected fourth quarter 2007 revenue, gross margin and operating margin and full fiscal year 2007 diluted earnings per ADS, 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 and the full fiscal year. 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, our belief in the outcome of any claim or lawsuit, including our claim against one of our subcontractors for the inventory loss that we sustained during a fire at the subcontractor's factory; 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 multimedia consumer electronics markets; decreases in the overall average selling prices of our products; changes in the relative sales mix of our products; 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; 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 July 2, 2007. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.

    For more information, please contact:

    Investor Contact:

     Selina Hsieh
     Investor Relations
     Tel:   +886-3-552-6888 x2311
     Email: ir@siliconmotion.com

    Media Contact:

     Sara Hsu
     Project Manager
     Tel:   +886-2-2219-6688 x3509
     Email: sara.hsu@siliconmotion.com.tw
SOURCE  Silicon Motion Technology Corporation
    -0-                             10/30/2007
    /CONTACT: Investors: Selina Hsieh, Investor Relations, at +886-3-552-6888
x2311 or ir@siliconmotion.com; or Media, Sara Hsu, Project Manager, at +886-2-
2219-6688 x3509 or sara.hsu@siliconmotion.com.tw /
    /Web site:  http://www.siliconmotion.com /
    (SIMO)

CO:  Silicon Motion Technology Corporation
ST:  Taiwan
IN:  CPR CSE SEM
SU:  ASI CCA ERN



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9824 10/30/2007 20:04 EDT http://www.prnewswire.com

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