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Press Release
 
July 30, 2007
 

Silicon Motion Announces Second Quarter Results for the Period Ended June 30, 2007

Sales & Net Income Set New Second Quarter Record

    TAIPEI, Taiwan, July 30 /Xinhua-PRNewswire-FirstCall/ --

    Second Quarter 2007

    Financial Highlights:

    -- Net sales increased 111% year-over-year to US$44.1 million
    -- Gross margin excluding FCI was largely flat from 1Q07 at 53.0%(1)
    -- GAAP gross margin declined slightly to 52.6%
    -- Operating margin excluding FCI increased to 28.8% from 27.8% in 1Q07
       (1)
    -- GAAP net income increased 46% year-over-year to US$8.3 million in 2Q07
    -- Diluted earnings per ADS excluding FCI were US$0.37, up 106% from
       US$0.18 in 2Q06(1)
    -- Diluted earnings per ADS excluding in-process R&D expenses and
       amortization of intangibles were US$0.36, up 100% from US$0.18 in
       2Q06(1)
    -- GAAP diluted earnings per ADS were US$0.25, up 39% from US$0.18 in 2Q06

    Note 1: A reconciliation of non-GAAP financial measures to GAAP financial
            measures is provided at the end of this press release.

    Business Highlights:

    -- Increased total unit shipments 168% year-over-year and 20% sequentially
       to a record 78.5 million units.  Unit shipments of mobile storage
       products increased 152% year-over-year and 14% sequentially to a record
       73.1 million units
    -- Secured major embedded SSD controller design-win with Asustek for its
       new ASUS Eee PC, the $199 low-cost Intel processor-powered notebook PC
    -- Continued to expand breadth of business relationship with Samsung with
       design-in of new USB flash drive controller and embedded SSD
       controllers for camcorders
    -- Secured new design-wins for (i) high performance card reader
       controllers at Kingston, and Lexar Media and (ii) MP3 SoC
       controllers at Mattel, Thomson, and Coby
    -- Regained S-DMB mobile TV tuner business from Samsung with design wins
       for 3 new handsets

Silicon Motion Technology Corporation (Nasdaq: SIMO; the "Company") today announced its second quarter 2007 financial results. GAAP net income increased 46% year-over-year to US$8.2 million, or US$0.25 per diluted ADS. Non-GAAP net income excluding in-process R&D expenses and amortization of intangibles, which management believes is an important measure of the ongoing

operational performance of the Company, increased 112% year-over-year to a record US$12million, or US$0.36 per diluted ADS.

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

''Despite seasonal slowness, we delivered strong 2Q results, setting a new second quarter record for both sales, which increased 111% from the same period last year, and net income, which was up 112%. In addition to successfully completing the acquisition and integration of FCI, our new mobile communications business, we were able to expand our core mobile storage product business a respectable 7% quarter-over-quarter. Our multimedia SOCs grew an impressive 64%, led by a near two-fold increase in shipments of MP3 SoCs. We continued to maintain our track record of balancing strong growth with healthy profitability. The second quarter marks the 8th consecutive quarter that we have maintained our gross margin above 52%.''

''From an operational perspective, we saw a number of major design wins for SSD, card reader, and USB flash drive controllers, as well as MP3 SoCs, and we are very excited to be designing embedded flash controllers for consumer electronic devices, notebook PCs, and mobile handsets. Our design win for the ASUS Eee PC, the $199 joint Asustek-Intel notebook PC development project, is one exciting example. We believe low cost PCs utilizing NAND flash storage are a compelling new trend that could create considerable longer-term momentum in the market."

Second Quarter 2007 Financial Review (2)

Sales

Net sales in the second quarter totaled US$44.1 million, an increase of 111% from 2Q06 and an increase of 23% compared with 1Q07. Excluding net sales from our mobile communications business, which comprises our recently acquired FCI business, net sales in the second quarter totaled US$40.0 million, an increase of 91% from 2Q06 and an increase of 12% compared with 1Q07.

    Note 2: 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.

Overall unit shipments increased 168% from 2Q06 and 20% from 1Q07, and the blended average selling price (ASP) per unit increased 3% from 1Q07.

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



    As % of Net Sales     3Q05  4Q05  1Q06  2Q06  3Q06  4Q06  1Q07  2Q07
    Mobile Storage         87%   84%   72%   85%   92%   90%   90%   79%
    Multimedia SoCs        13%   16%   27%   14%    8%    9%    9%   12%
    Mobile Communications   --    --    --    --    --    --    --    9%
    Others                  0%    0%    1%    1%    0%    1%    1%    1%
    Total                 100%  100%  100%  100%  100%  100%  100%  100%


Net sales from mobile storage products, which include flash memory card controllers, USB flash drive controllers, and card reader controllers, increased 94% from 2Q06 to US$34.6 million and increased 7% from 1Q07. Unit shipments increased 152% from 2Q06 and 14% from 1Q07 to 73.1 million units. The ASP per unit in 2Q07 declined by 6% from 1Q07.

Net sales from multimedia SoC products, which include embedded graphics processors and MP3 SoCs, increased 78% from 2Q06 and increased 64% from 1Q07 to US$5.2 million. Unit shipments of multimedia SoC products increased over 500% from 2Q06 and increased 88% from 1Q07 to 2.2 million units. ASPs for all three of the Company's multimedia products increased compared to the first quarter of 2007, but the blended multimedia ASP declined because of a shift in the product mix towards lower ASP products, such as MP3 SoCs which have lower selling prices compared to embedded graphics processors and constituted a growing proportion of the total multimedia SoC product sales in the second quarter.

Net sales from mobile communication products, which include mobile TV tuners, CDMA RF ICs, and electronic toll collection RF ICs, were US$4.1 million in 2Q07. The Company began consolidating mobile communication sales from May 1, 2007 since the acquisition of FCI was completed at the end of April.

    Unit Shipment      3Q05   4Q05   1Q06   2Q06   3Q06   4Q06    1Q07   2Q07
    (thousand units)
    Mobile Storage   24,265 30,146 20,306  28,976 49,563 61,966  64,090 73,083
    Multimedia SoCs     407    947    496     326    395    581   1,179  2,215
    Mobile
     Communications      --     --     --      --     --     --     --   3,197
    Others                3      7     21      11     23     14     28      33
    Total            24,675 31,100 20,823  29,313 49,981 62,561  65,297 78,529



    Margins

Gross margin excluding FCI was largely flat from 1Q07 at 53.0%. GAAP gross margin declined slightly to 52.6% due to lower margins at FCI that were caused by a delayed initial ramp of a significant new higher-margin product. Management believes the delay will be resolved and shipments will start in 3Q07.

The Company's 2Q operating expense includes a one-time US$2.1 million expense for FCI in-process R&D and a US$1.7 million charge for amortization of intangibles, which comprises amortizations of FCI core technologies, FCI customer relations, and FCI order backlogs. Management 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.

Operating margin excluding FCI increased to 28.8% from 27.8% in 1Q07 due to lower R&D expenditures as a percentage of sales. Operating margin excluding in-process R&D expenses and amortization of intangibles decreased to 26.6% from 27.8% in 1Q07, as a result of an increase in overhead expenses in Korea that were required to support FCI's growth. GAAP operating margin, which includes in-process R&D expenses and amortization of intangibles, decreased to 18.1%.

Earnings

GAAP net income increased 46% year-over-year to US$8.3 million in 2Q07. Diluted earnings per ADS excluding FCI were US$0.37, up 106% from US$0.18 in 2Q06. Diluted earnings per ADS excluding in-process R&D expenses and amortization of intangibles were US$0.36, up 100% from US$0.18 in 2Q06. GAAP diluted earnings per ADS, which include in-process R&D expenses and amortization of intangibles, were US$0.25, up 39% from US$0.18 in 2Q06.

Business Outlook:

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

''Looking forward, although the third quarter has typically been a strong period for us, we believe revenue will remain flat due to continued tight NAND flash supply conditions. We believe this has largely been caused by yield problems at a number of flash manufactures moving to more advanced process technologies and speculative inventory stockpiling by flash distributors. We view the current industry situation as short-term in nature and are optimistic about the outlook of our business beyond the near-term."

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

    -- A 36% to 42% year-over-year increase in revenue, including FCI, to
       approximately US$43 - 45 million, though largely flat on a sequential
       basis
    -- Gross Margin to remain in the 52 - 53% range
    -- Operating Margin, excluding in-process R&D and amortization of
       intangibles, to be 27 - 28%

The company expects full year diluted earnings per ADS in 2007, excluding intangible amortization and in-process R&D expenses, to increase from $0.93 in 2006 to a range of approximately $1.40 - 1.50, which represents growth of 51% - 61% over the previous year. At the end of the first quarter, Management raised its full year earnings per ADS guidance from US$1.20 - 1.30 to $1.40 - 1.50. This earnings target excluded the FCI acquisition and did not anticipate the effects on the business of tight NAND flash supply conditions that the Company is currently experiencing. As a result, although Management is currently maintaining its annual guidance, it is currently expected that the range will be met with FCI's earnings included.

Conference Call & Webcast:

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

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

    CONFERENCE CALL ACCESS NUMBERS:
    USA (Toll Free): 1 888 680 0892
    USA (Toll): 1 617 213 4858
    Taiwan (Toll Free) 0080 114 8420
    Participant Passcode: 4315 0409

    REPLAY NUMBERS (for 7 days):
    USA (Toll Free): 1 888 286 8010
    USA (Toll): 1 617 801 6888
    Participant Passcode: 9213 1868

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 certain charges and the financial results of FCI, including non-GAAP net sales, 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 supplemental measures exclude, among other things, FCI net sales, FCI cost of sales, FCI gross profit, FCI selling, general, and administrative expenses, FCI operating income, and FCI net income, as well as intangible amortization and in-process R&D expenses relating to the FCI acquisition. 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.

In calculating our non-GAAP financial measures, we exclude certain items to facilitate our review of the comparability of the Company's operating performance on a period-to-period basis because items such as FCI financial results affect comparison with previous periods that are without FCI financial results and other items are not, in our view, related to the Company's ongoing operational performance. 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:

FCI financial results consist of revenue, costs, and earnings of Future Communications IC, Inc. (''FCI''), a company in South Korea that we acquired. This acquisition was completed at the end of April 2007 and we began consolidating FCI from May 1, 2007. We present our operating results without FCI in order to facilitate a period-to-period comparison of the Company's mobile storage and multimedia businesses.

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.

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


                             For the 3 Months Ended        Change From
                             Jun. 30,   Mar. 31,  Jun. 30,  2Q06   1Q07
                              2006       2007       2007     (%)    (%)

                             (NT $)     (NT$)      (NT$)

    Net Sales                686,963 1,171,513  1,446,207   111%    23%
    Cost of sales            319,492   544,496    685,693   115%    26%
    Gross profit             367,471   627,017    760,514   107%    21%
    Operating expenses
      Research & development 109,223   173,944    200,818    84%    15%
      Sales & marketing       43,266    61,148     78,846    82%    29%
      General &
       administrative         46,125    66,549     95,588   107%    44%
      In-process research
       and development            --        --     69,189    N/A    N/A
      Amortization of
       intangibles assets         --        --     54,472    N/A    N/A
      Subtotal               198,614   301,642    498,913   151%    65%
    Operating income         168,857   325,374    261,601    55%   -20%

    Non-operating income(expense)
      Gain on sale of
       investments             4,362     5,346       4,886    12%    -9%
      Interest income (net)   14,897    20,544      12,366   -17%   -40%
      Foreign exchange gain
       (loss)                    666    (1,960)     (4,384) -758%   124%
     Investment income            --        --         772    N/A    N/A
      Others                     596        (1)         18   -97%  1900%
      Subtotal                20,521    23,929      13,658   -33%   -43%
    Income before tax        189,378   349,303     275,259    45%   -21%
    Income tax expense         2,591    23,536       2,915    13%   -88%
    Net income               186,787   325,767     272,344    46%   -16%

    Basic earnings per ADS   NT$6.07  NT$10.52     NT$8.43    39%   -20%
    Diluted earnings per ADS NT$5.96  NT$10.19     NT$8.14    37%   -20%

    Margin Analysis:
     Gross margin              53.5%      53.5%      52.6%     --     --
     Operating margin          24.6%      27.8%      18.1%     --     --
     Net margin                27.2%      27.8%      18.8%     --     --

    Additional Data:
     Weighted avg. ADS
      equivalents(3)          30,783     30,980     32,312     --     --
     Diluted ADS equivalents  31,353     31,969     33,453     --     --



    Note 3: Assumes all outstanding ordinary shares are represented by ADSs.
            Each ADS represents four ordinary shares.



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

                              For the 3 Months Ended        Change From
                           Jun. 30,   Mar. 31,  Jun. 30,  2Q06 (%)1Q07 (%)
                            2006       2007      2007

                            (US $)     (US $)     (US$)

    Net Sales              20,925     35,684     44,051    111%    23%
    Cost of sales           9,732     16,585     20,886    115%    26%
    Gross profit           11,193     19,099     23,165    107%    21%
    Operating expenses
       Research &
        development         3,326      5,298      6,117     84%    15%
       Sales & marketing    1,318      1,863      2,402     82%    29%
       General &
        administrative      1,405      2,027      2,912    107%    44%
       In-process research
        and development        --        --       2,107     N/A    N/A
       Amortization of
        intangibles assets     --        --       1,659     N/A    N/A
       Subtotal             6,049      9,188     15,197    151%    65%
    Operating income        5,144      9,911      7,968     55%   -20%

    Non-operating income (expense)
       Gain on sale of
        investments           133        163        149     12%    -9%
       Interest income (net)  454        626        377    -17%   -40%
       Foreign exchange gain
        (loss)                 20        (60)      (134)  -758%   124%
       Investment income       --         --         24     N/A    N/A
       Others                  18         --          1    -97%  1900%
       Subtotal               625        729        417    -33%   -43%
    Income before tax       5,769     10,640      8,385     45%   -21%
    Income tax expense         79        717         89     13%   -88%
    Net income              5,690      9,923      8,296     46%   -16%

    Basic earnings
      per ADS            US $0.18   US $0.32    US$0.26     44%   -20%
    Diluted earnings
      per ADS            US $0.18   US $0.31    US$0.25     39%   -20%

    Margin Analysis:
     Gross margin           53.5%      53.5%      52.6%      --     --
     Operating margin       24.6%      27.8%      18.1%      --     --
     Net margin             27.2%      27.8%      18.8%      --     --

    Additional Data:
     Weighted avg. ADS     30,783     30,980     32,312      --     --
       equivalents(4)
     Diluted ADS
       Equivalents         31,353     31,969     33,453      --     --



    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$ 32.83  to
          US$1 on June 30, 2007,

    Note 4: Assumes all outstanding ordinary shares are represented by ADSs.
            Each ADS represents four ordinary shares.



                    Silicon Motion Technology Corporation
                      Consolidated Statements of Income
              (Reconciliation of GAAP to Non-GAAP-Excluding FCI)
                    For the 3 Months Ended on June 30,2007
            (in thousands, except percentages and per share data)
                                 (unaudited)

                          GAAP           FCI        Non-GAAP      Non-GAAP
                          (NT$)         (NT$)        (NT $)        (US $)
    Net Sales          1,446,207       134,121     1,312,086       39,966
    Cost of sales        685,693        68,597       617,096       18,797
    Gross profit         760,514        65,524       694,990       21,169
    Operating expenses
     Research &
       development       200,818        27,139       173,679        5,289
     Sales &
       marketing          78,846        10,342        68,504        2,087
     General &
      administrative      95,588        20,226        75,362        2,296
     In-process
       research
       and development    69,189        69,189            --           --
     Amortization of
       intangibles assets 54,472        54,472            --           --
    Subtotal             498,913       181,368       317,545        9,672
    Operating income     261,601      (115,844)      377,445       11,497

    Non-operating income (expense)
     Gain on sale of
      investments          4,886           --         4,886           149
       Interest income
        (net)             12,366          219        12,147           370
       Foreign
        exchange          (4,384)         467        (4,851)         (148)
     gain (loss)
       Investment income     772           --           772            24
       Others                 18           --            18            --
       Subtotal           13,658          686        12,972           395
    Income before tax    275,259     (115,158)      390,417        11,892
    Income tax expense
    (benefit)              2,915        4,683        (1,768)          (54)
    Net income           272,344     (119,841)      392,185        11,946

    Basic earnings per
     ADS                 NT$8.43           --     NT $12.69      US $0.38
    Diluted earnings
     per ADS             NT$8.14           --     NT $12.25      US $0.37


    Margin Analysis:
     Gross margin          52.6%           --         53.0%            --
     Operating margin      18.1%           --         28.8%            --
     Net margin            18.8%           --         29.9%            --

    Additional Data:
     Weighted avg. ADS    32,312           --       31,169             --
      equivalents(5)
     Diluted ADS
      equivalents         33,453           --        32,282            --



    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$ 32.83 to
          US$1 on June 30, 2007,

    Note 5: Assumes all outstanding ordinary shares are represented by ADSs.
            Each ADS represents four ordinary shares.



                    Silicon Motion Technology Corporation
                      Consolidated Statements of Income

(Reconciliation of GAAP to Non-GAAP-Excluding amortization of intangibles and

                           In-process R&D expense)
                    For the 3 Months Ended on June 30,2007
            (in thousands, except percentages and per share data)
                                 (unaudited)


                                       Amortization of
                                       intangibles and
                                        In-process R&D
                                GAAP        expense     Non-GAAP   Non-GAAP
                              (NT$)          (NT$)       (NT $)      (US $)
    Net Sales               1,446,207           --   1,446,207      44,051
    Cost of sales             685,693           --     685,693      20,886
    Gross profit              760,514           --     760,514      23,165
    Operating expenses
       Research &
        development           200,818           --     200,818       6,117
       Sales & marketing       78,846           --      78,846       2,402
       General &
        administrative         95,588           --      95,588       2,912
         In-process research
          and development      69,189       69,189          --          --
         Amortization of
          intangibles assets   54,472       54,472          --          --
       Subtotal               498,913      123,661     375,252      11,431
    Operating income          261,601      123,661     385,262      11,734

    Non-operating income(expense)
       Gain on sale of
        investments             4,886           --       4,886         149
       Interest income (net)   12,366           --      12,366         377
       Foreign exchange gain
        (loss)                 (4,384)          --      (4,384)       (134)
       Investment income          772           --         772          24
         Others                    18           --          18           1
         Subtotal              13,658           --      13,658         417
    Income before tax         275,259      123,661     398,920      12,151
    Income tax expense
     (benefit)                  2,915           --       2,915          89
    Net income                272,344      123,661     396,005      12,062

    Basic earnings per ADS    NT$8.43          --      NT$12.26   US $0.37
    Diluted earnings per ADS  NT$8.14          --      NT$11.84   US $0.36

    Margin Analysis:
     Gross margin               52.6%          --         52.6%         --
     Operating margin           18.1%          --         26.6%         --
     Net margin                 18.8%          --         27.4%         --

    Additional Data:
     Weighted avg. ADS
      Equivalents(6)            32,312          --        32,312         --
     Diluted ADS equivalents    33,453          --        33,453         --



    Note 6: Assumes all outstanding ordinary shares are represented by ADSs.
            Each ADS represents four ordinary shares.



                    Silicon Motion Technology Corporation
                 Reconciliations of GAAP to Non-GAAP Results
           (US$ thousands, except per-share amount and percentages)
                                 (unaudited)


                                                      Three Months Ended
                                               Jun. 30,    Mar. 31,   Jun. 30,
                                                  2006        2007       2007
    GAAP cost of sales                           9,732      16,585    20,886
       Adjustment for share-based
        compensation                               (31)        (51)     (121)
    Cost of sales excluding share-based
     compensation                                9,701      16,534    20,765

    GAAP operating income
       Adjustment for share-based
        compensation within:                     5,143       9,910     7,968
             Cost of sales                          31          51       121
             Research and development              211         588     1,216
             Sales and marketing                    80         225       433
             General and administrative            258         338       609
    Operating income excluding share-based
     compensation                                5,723      11,112    10,347

    GAAP net income                              5,690       9,923     8,296
       Adjustment for share-based
        compensation within:
             Cost of sales                          31          51       121
             Research and development              211         588     1,216
             Sales and marketing                    80         225       433
             General and administrative            258         338       609
    Net income excluding share-based
     compensation                                6,270      11,125    10,675

    GAAP diluted earnings per ADS                 0.18        0.31      0.25
       Adjustment for share-based
        compensation                              0.02        0.03      0.06
    Diluted earnings per ADS excluding
     share-based compensation                  US$0.20     US$0.34   US$0.31

    GAAP gross margin percentage                  53.5%       53.5%    52.6%
       Adjustment for share-based                                        --%
        compensation                               0.1%        0.1%
    Gross margin percentage excluding
     share-based compensation                     53.6%       53.6%    52.6%

    GAAP operating margin percentage              24.6%       27.8%    18.1%
       Adjustment for share-based
        compensation                               2.8%        3.4%     5.4%
    Operating margin percentage excluding
     share-based compensation                     27.4%       31.2%    23.5%



    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$ 32.83 to
          US$1 on June 30, 2007,



                    Silicon Motion Technology Corporation
                           Stock Based Compensation
                     (in NT$ thousands and US$ thousands)
                                 (unaudited)


                                                 Three Months Ended
                                          Jun. 30,     Mar. 31,    Jun. 30,
                                            2006         2007        2007
                                           (NT$)        (NT$)        (NT$)
    (1) Cost of sales:
        Stock-based compensation            1,032        1,663       3,972
    (2) Research and development expense:
        Stock-based compensation            6,911       19,289      39,915
    (3) Sales and marketing expense:
        Stock-based compensation            2,621        7,381      14,199
    (4) General and administrative expense:
        Stock-based compensation            8,469       11,098      19,985



                                                 Three Months Ended
                                          Jun. 30,     Mar. 31,    Jun. 30,
                                            2006         2007        2007
                                            (US$)        (US$)        (US$)
    (1) Cost of sales:
        Stock-based compensation               31           51         121
    (2) Research and development expense:
        Stock-based compensation              211          588       1,216
    (3) Sales and marketing expense:
        Stock-based compensation               80          225         433
    (4) General and administrative expense:
        Stock-based compensation              258          338         609



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


                      For the Six  For the Six  For the Six  For the Six
                      Months Ended Months Ended Months Ended Months Ended
                           Jun. 30,   Jun. 30,   Jun. 30,   Jun. 30,
                             2006       2007       2006       2007    Change
                              NT$        NT$        US$        US$      (%)
    Net Sales            1,253,100  2,617,720     38,169     79,735   109%
    Cost of sales          585,389  1,230,189     17,831     37,471   110%
    Gross profit           667,711  1,387,531     20,338     42,264   108%
    Operating expenses
       Research &
        development        191,368    374,762      5,829     11,415    96%
       Sales & marketing    90,197    139,994      2,747      4,264    55%
       General &
        administrative      90,952    162,138      2,770      4,939    78%
       In-process
        research and
        development             --     69,189         --      2,107     NA
       Amortization of
        intangible
        assets                  --     54,472         --      1,659     NA
       Subtotal            372,517    800,555     11,346     24,385   115%
    Operating income       295,194    586,976      8,992     17,879    99%

    Non-operating expense (income)
       Gain on sale of
        investments          8,319     10,233        253        312    23%
       Interest income
        (net)               28,593     32,909        870      1,002    15%
      Investments income        --        772         --         24     NA
       Foreign exchange
        gain (loss)            717     (6,344)        22       (193) -985%
       Others                1,304         17         41          1   -99%
       Subtotal             38,933     37,587      1,186      1,145    -4%
    Income before tax      334,127    624,563     10,178     19,024    87%
    Income tax expense      10,663     26,452        325        806   148%
    Net income             323,464    598,111      9,853     18,218    85%

    Basic earnings per
     ADS                  NT$10.52   NT$18.94    US$0.32    US$0.58     --
    Diluted earnings per
     ADS                  NT$10.34   NT$18.33    US$0.32    US$0.56     --

    Margin Analysis:
     Gross margin            53.3%      53.0%      53.3%      53.0%     --
     Operating margin        23.6%      22.4%      23.6%      22.4%     --
     Net margin              25.8%      22.9%      25.8%      22.9%     --

    Additional Data:
     Weighted average ADS
      equivalents           30,738     31,579     30,738     31,579     --
     Diluted ADS
      equivalents           31,287     32,630     31,287     32,630     --



    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$ 32.83 to
          US$1 on June 30, 2007,



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


                                  Dec. 31,    Jun. 30,    Dec. 31,   Jun. 30,
                                    2006        2007        2006       2007
                                     NT$          NT$        US$        US$
    Cash and cash equivalents   1,808,042    1,336,091     55,073     40,697
    Short-term investments      1,458,847    1,322,354     44,436     40,279
    Accounts receivable, net      841,764      773,457     25,640     23,559
    Inventories                   427,116      734,810     13,010     22,382
    Refundable deposits -
     current                       65,000       65,043      1,980      1,981
    Deferred income tax assets,
     net                          103,603       64,508      3,156      1,965
    Prepaid expenses and other
     current assets               244,832      201,217      7,457      6,130
    Total current assets        4,949,204    4,497,480    150,752    136,993

    Long-term investments         170,942      190,346      5,207      5,798
    Property and equipment (net)  319,356      441,101      9,728     13,436
    Goodwill and intangible
     assets(net)                       --    2,485,619         --     75,712
    Other assets                   89,182      261,979      2,716      7,980
    Total assets             NT$5,528,684 NT$7,876,525 US$168,403 US$239,919

    Accounts payable              525,173      590,985     15,997     18,001
    Income tax payable            139,268      145,522      4,242      4,433
    Accrued expenses and other
     current liabilities          294,061      423,215      8,957     12,891
    Total current liabilities     958,502    1,159,722     29,196     35,325

    Accrued pension cost            1,018          109         31          3
    Other long-term liabilities     1,040       41,395         32      1,261
    Total liabilities             960,560    1,201,226     29,259     36,589
    Minority interest                  --        4,970         --        151
    Shareholders' equity        4,568,124    6,670,329    139,144    203,179
    Total liabilities &
     shareholders' equity    NT$5,528,684 NT$7,876,525 US$168,403 US$239,919



    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. Such forward-looking statements 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

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. Such forward-looking statements 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.

    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-           07/30/2007
    /CONTACT:  Selina Hsieh, Investor Relations, +886-3-552-6888 x2311, or fax,
+886-3-552-6988, or ir@siliconmotion.com, or Tip Fleming, Senior Vice
President of Christensen,  +1-212-618-1978 or +852-2117-0861, or
tfleming@ChristensenIR.com, or Sara Hsu, Project Manager, +886-2-2219-6688
x3509, or +886-2-2219-6868, or sara.hsu@siliconmotion.com.tw, all for Silicon
Motion Technology Corporation /
    /Web site: http://www.siliconmotion.com /
    (SIMO)

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





FC
-- HKM008 --
3222 07/30/2007 22:52 EDT http://www.prnewswire.com

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