Silicon Motion Technology Corporation

Transcription

1 Silicon Motion Technology Corporation Silicon for Mobile Information Investor Presentation March 2006

2 Safe Harbor Statement This presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Specifically, this presentation does not constitute a prospectus within the meaning of the Securities Act of 1933, as amended. This presentation 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. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as expects, plans, will, estimates, projects, or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company does not undertake to revise forward-looking statements to reflect future events or circumstances. 2

3 Agenda Our Company Our Strategy Our Financials 3

4 Investment Highlights Provider of universally compatible, high performance, low power portable digital media devices A leader in the NAND flash controller market Highly defensible technology backed by patent protection Strategically located to the Asia-based electronics supply chain US-styled gross margins and Asian operating expenses One of a Kind Company with Ability to Deliver Superior Performance 4

5 Our Company Our Strategy Our Financials 5

6 Our Company Incorporation: Market position: Location: Employees: Overview Founded in 1997 A leader in the flash memory controller market Headquartered in Taiwan, with offices in U.S., Japan, Korea, Germany and China 243 employees as of Dec 31, 2005 Key milestones Mission Silicon Motion is a leading fabless semiconductor company that provides universally compatible, highperformance, low-power semiconductor solutions for the multimedia consumer electronics markets Launched CF controllers (1st in Asia) First million CF controllers shipped in 2-years 1M CF controllers shipped Launched MMC and SD controllers with 1M of each shipped Launched USB 2.0 controllers with: 7M USB 2.0 controllers shipped 7M MMC controllers shipped 20M SD controllers shipped Wallace Kou, CEO, elected a Director of MMCA and the Chairman of MMCA Compliance committee Launched MP3 player controllers NASDAQ IPO on June 30, 2005 Record shipment in Sep: 10M+ SD/MMC controllers Financial highlights Net Sales (US$m) Gross margin 41% 50% Operating margin 18% 25% Net margin 12% 25% 6

7 Our Products and End Markets Product Mix 2004 Our Controllers and Processors Wide-Ranging End Markets Graphics controller 13% USB controller 17% Others 1% Product Mix 2005 Flash controller 69% Flash memory controllers Compact Flash (CF) Multimedia Card (MMC) Secure Digital (SD) xd-picture Universal Serial Bus (USB) 2.0 controllers USB 2.0 Flash Disk (UFD) USB controller 17% Graphics controller 12% MP3 controller & Others 3% Flash controller 68% Card reader Portable audio SoCs MP3 Controller Multimedia display processors Graphics 7

8 A Driver of Growth in Our End-Markets: Digital Cameras Digital Camera Sales No. of Digital Photo Exposures $20 $18 $16 CAGR 23.3% $18.2 $17.4 $15.8 $ Growth accelerated since 2004 US$ in billions $14 $12 $10 $8 $6 $4 $2 $4.2 $6.4 $13.2 $10.6 No. of exposures (billions) $ Source: IC Insights Larger digital camera base Increased picture resolution Improved convenience with camera phone Driving Increased Use of Flash Memory Cards 8

9 A Driver of Growth in Our End-markets: Mobile Phones Camera Phones MP3 Phones Units in millions CAGR: 52.5% Units in millions CAGR: 64.6% Increased functionalities Smartphones Need for memory 3G Phones Units in millions CAGR: 35.8% Units in millions CAGR: 52.3%

10 Flash Memory Card Storage Options Secured Digital (SD) CAGR: 39% Unique encryption feature ideal for applications requiring IP protection Capacity ranges from 4MB to 2GB Up to x4 bit, 50MHz Popular due to small size and low power Compact Flash (CF) CAGR: 1% High capacity of up to 8GB x8 bit, up to 25MHz Single voltage Large form factor suitable for high resolution digital camera 2005 Shipment Others 4% Memory Sticks 14% SD 44% MMC 18% CF 11% xd/sm 9% 389 million MultiMedia Card (MMC) CAGR: 29% Fastest transfer speed - v4.0 available in x1, x4, x8 bit, up to 52MHz Capacity ranges from 8MB to 2GB Dual voltage support for v4.1 xd-picture (xd) /SmartMedia (SM) CAGR: -5% SM has large form factor and low density of up to 128MB xd will replace SM xd v1.2 contains a controller as well as memory xd available with capacity of up to 1GB Note: SD includes minisd and Micro SD; MMC includes RS-MMC and MMC Micro Source: isuppli 10

11 Our Role in a Flash Memory Card Functions: Flash memory controller Controls data flow between host device and NAND flash Determines read/write speed NAND Flash memory Functions: NAND Flash Memory Stores data World-class Flash Memory Controller Functionalities 11

12 Our Company Our Strategy Our Financials 12

13 Flash Memory Card and USB Flash Drive Controllers Flash Memory Card Controller (1) USB 2.0 Flash Drive Controller (1) Units in millions CAGR: 38.2% Units in millions CAGR: 39.7% % Market Share Silicon Motion Market Share 25% 20.0% 20% 15% 11.6% 10% 4.4% 5% 0% (1) Assumes 1 controller per flash memory card; Source: IDC % Market Share Silicon Motion Market Share 30% 27.0% 25% 19.8% 20% 15% 10% 5% 0.1% 0% (1) Assumes 1 controller per USB flash drive; Source: IDC 13

14 Portable Audio SoC and Embedded Graphics Portable Audio SoC Embedded Graphics Portable audio player controller (1) Embedded graphics controller (1) Units in millions CAGR: 34.8% Units in millions CAGR: 8.2% Market participants Market participants (1) Assumes 1 controller per portable audio player; Source: IDC (1) Includes only car navigation and handheld computers; Assumes 1 controller per unit; Source: Gartner 14

15 Our Competitive Advantage in Flash and USB Flash Drive Controllers Learning curve HIGH Pricing floor for captives Captives LOW Emerging Asian competition Units (milions) Necessary Learning Curve HIGH Cost Structure 0 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 Flash card controllers USB 2.0 controllers Pricing ceiling for Asia competitors LOW 15

16 Our Customer Base Mobile Storage Products Multimedia SoCs 2004 Customer Concentration Customer A 22% Others 41% Customer B 14% Customer E 5% Customer D 5% Customer C 13% 2005 Customer Concentration Customer A 11% Customer B 8% Customer C 8% Others 60% Customer D 7% Customer E 6% 16

17 Our Company Our Strategy Our Financials 17

18 Our Sales Trend 4Q05: +17% Sequentially +14% YoY NT$ Million Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 18

19 Sales By Product 100% 80% 20% 18% 13% 7% 13% 19% 13% 16% 60% 40% 80% 80% 87% 92% 86% 80% 87% 84% 20% 0% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 Mobile Storage Products Multimedia SoCs Others Mobile Storage Products include flash card controllers and USB 2.0 controllers. Multimedia System-on-Chip Products include multimedia display processors and portable audio SoCs. 19

20 Unit Shipments 35,000 30,146 30,000 24,265 Units (thousand) 25,000 20,000 15,000 10,000 4,824 4,913 9,983 14,549 10,912 14,120 5, Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 M obile Storage Products M ultimedia SoCs Others Mobile Storage Products include flash card controllers and USB 2.0 controllers. Multimedia System-on-Chip Products include multimedia display processors and portable audio SoCs. 20

21 Our Margin Trend 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 43.6% 18.8% 52.3% 27.8% 53.9% 30.2% 0.0% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 Gross Margin Operating Margin 21

22 Our Net Income Trend 4Q05: +15% Sequentially +164% YoY NT$ Million Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 22

23 Our Balance Sheet As of 12/31/04 (NT$ Million) As of 12/31/05 (NT$ Million) As of 12/31/05 (US$ Million) Cash & Cash Equivalent 727 1, Short Term Investments 154 1, Total Assets 2,167 4, Total Debt Total Liabilities Shareholders Equity 1,448 3,

24 Our Financial Ratios 1Q05 2Q05 3Q05 4Q05 A/R Days (average) Inventory Days (average) Inventory Days (ending balance) Current Ratio ROE 26% 29% 35% 30% ROA 19% 24% 30% 25% 24

25 Investment Highlights Provider of universally compatible, high performance, low power portable digital media devices A leader in the NAND flash controller market Highly defensible technology backed by patent protection Strategically located to the Asia-based electronics supply chain US-styled gross margins and Asian operating expenses One of a Kind Company with Ability to Deliver Superior Performance 25