Silicon Motion Technology (SIMO) 28th Annual Needham Growth Conference Virtual summary

Business overview and growth strategy

• Leading supplier of NAND flash controllers for SSDs, embedded storage, and smartphones, with a 30-year history and a $1B+ annual revenue run rate.

• Expanding into enterprise, automotive, industrial, and commercial markets, with a focus on AI-related opportunities.

• Outsourcing trends among NAND makers are creating more opportunities to gain share as controller development becomes more complex and costly.

• Focused on increasing market share across all business lines, regardless of end-market volatility.

Key product and market developments

• Secured a significant win with NVIDIA's BlueField-3 DPU, providing boot drives and expanding content in BlueField-4 and switch products, with higher ASPs and densities expected.

• High-end PCIe Gen 5 controller ramping strongly, with 45% QoQ revenue growth and over 15% of client SSD sales; design wins with four of six NAND makers.

• Four-channel PCIe 5 controller to ramp in late 2026, targeting mainstream PC SSDs and expected to drive share from 30% to 40% over the next few years.

• MonTitan enterprise SSD platform leverages QLC NAND for high-capacity, high-performance, cost-effective storage, targeting 5%-10% of revenue by late 2026/2027.

Market dynamics and share gains

• NAND price increases in 2025-2026 have led module makers to build inventory, but strong OEM customer base and share gains are expected to offset demand risks.

• QLC NAND adoption is accelerating in PC, enterprise, and smartphone markets, with controller technology improvements enabling broader use.

• Merchant controller share in eMMC and UFS markets expected to rise from 20%-25% to over 30% as NAND makers outsource more and module makers become more relevant.

• Automotive, AR/VR, and smart devices are driving eMMC and UFS demand, with automotive moving from one to up to ten storage devices per vehicle.