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Press Release
 
January 31, 2008
 

Silicon Motion Announces Fourth Quarter Results for the Period Ended December 31, 2007:

Sales and Net Income Set New Fourth Quarter Record

 

Sales and Net Income Set New Fourth Quarter Record
 Fourth Quarter 2007
 Financial Highlights:
 *  Net sales increased 48% year-over-year to US$53.4 million,
    reaching a new record high and exceeding guidance
 *  Gross margin excluding stock-based compensation decreased mildly
    from 3Q07 to 52.7%, the tenth consecutive quarter where gross
    margin was above 52%
 *  GAAP gross margin declined slightly to 52.5%, also the tenth
    consecutive quarter where gross margin was above 52%
 *  Operating margin excluding stock-based compensation, acquisition-
    related charges, and one-time items decreased slightly from 31.7%
    in 3Q07 to 31.5%
 *  Net income excluding stock-based compensation, acquisition-related
    charges, and one-time items increased significantly, rising 35%
    year-over-year to US$16.4 million, a new record high
 *  Diluted earnings per ADS excluding stock-based compensation,
    acquisition-related charges and one-time items were US$0.47,
    up 24% from US$0.38 in 4Q06
 *  GAAP diluted earnings per ADS were US$0.35, up 6% from US$0.33 in
    4Q06

 Business Highlights:
 *  Total unit shipments increased 54% year-over-year and 23%
    sequentially to over 96 million units
 *  Card controller shipments increased 25% quarter-over-quarter; card
    controller revenue increased 17% quarter-over-quarter
 *  Full year card controller shipments increased 82% and market share
    increased from an estimated 31% in 2006 to 37% in 2007
 *  Full year mobile storage controller shipments increased 85% to 297
    million units
 *  SSD controller shipments reached 1.0 million units in the quarter,
    which is a new milestone for the Company
 *  Mobile communications revenue increased 47% quarter-over-quarter
    and accounted for 22% of total revenue, up from 17% of total
    revenue in 3Q07

TAIPEI, Taiwan, Jan. 31, 2008 (PRIME NEWSWIRE) -- Silicon Motion Technology Corporation (Nasdaq:SIMO) ("the Company") today announced its fourth quarter 2007 financial results. Fourth quarter net sales increased 48% year-over-year to US$53.4 million and GAAP net income increased 16% year-over-year to US$11.9 million, or US$0.35 per diluted ADS, compared to US$0.33 per diluted ADS in the fourth quarter of 2006.

Non-GAAP net income, which excludes stock-based compensation, acquisition-related charges, and one-time items, increased 35% year-over-year to US$16.4 million, or US$0.47 per diluted ADS, compared to US$0.38 per diluted ADS in the fourth quarter of 2006.

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

 "We are delighted with the strength of our 4Q operating results. We
 delivered US$53.4 million in revenue for the quarter, which exceeded
 the upper end of our US$50 to 52 million guidance range. These
 results were largely a result of excellent performance from both our
 storage and communications businesses. For full year 2007, we
 delivered earnings per diluted ADS of US$1.64."

 "Our 4Q07 storage revenue grew 15% sequentially, which is an
 improvement from the 17% sequential growth that we achieved in 4Q06
 and demonstrates that our solid execution in our flash controller
 business continues to deliver strong results. For full year 2007, we
 estimate that the flash card market volume increased almost 50% to
 660 million units and that the share of cards in the overall market
 using our controllers increased from 31% in 2006 to 37% in 2007. We
 strongly believe that we continue to earn our leadership position in
 the market because of the competitiveness and reliability of our
 technology, our established product track record with the broadest
 set of customers in the industry, and our broad capabilities compared
 to our competitors for supporting storage device customers and NAND
 flash partners."

 "We are excited about the performance of FCI, the mobile
 communications business we acquired last year. Revenue from this
 business increased a considerable 47% quarter over quarter and sales
 of mobile TV silicon tuners in the second half of 2007 accounted for
 over 7% of our total revenue, which we believe puts us in a strong
 position with regard to the rapidly growing mobile TV market. In
 order to strengthen our technological capabilities in this area, we
 completed a smaller mobile TV related IC acquisition in Korea at the
 end of November 2007. We believe that this acquisition will foster
 our ability to bring new integrated mobile TV silicon solutions to
 the market faster."

 "FCI generated over US$31 million in net sales for calendar year
 2007, which was largely in-line with our expectations. We are
 presently determining whether FCI met the 2007 product revenue and
 product margin targets required to trigger an earn-out payment as a
 part of the previously announced terms of the acquisition."

 "I am also delighted to note that our fourth quarter gross margin of
 53% was our tenth consecutive quarter of 52% or higher -- despite the
 continued volatility of NAND flash prices."

Fourth Quarter 2007 Financial Review(1)

Sales

Net sales in the fourth quarter totaled US$53.4 million, an increase of 48% from 4Q06 and an increase of 16% compared with 3Q07. Overall unit shipments increased 54% from 4Q06 and 23% from 3Q07.

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

 --------------------------------------------------------------------
 As % of Net Sales     1Q06  2Q06  3Q06  4Q06  1Q07  2Q07  3Q07  4Q07
 --------------------------------------------------------------------
 Mobile Storage         72%   85%   92%   90%   90%   79%   72%   71%
 --------------------------------------------------------------------
 Mobile
  Communications(2)                                    9%   17%   22%
 --------------------------------------------------------------------
 Multimedia SoCs        27%   14%    8%    9%    9%   12%   11%    7%
 --------------------------------------------------------------------
 Others                  1%    1%    0%    1%    1%    1%    0%    0%
 --------------------------------------------------------------------
 Total                 100%  100%  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 90% of net sales in 4Q06, declined to 71% of net sales in 4Q07. Card controllers, which were almost 80% of our revenue in 4Q06, declined to under 60% in 4Q07. In 4Q07, FCI, now our mobile communications business, accounted for 22% of net sales.

Net sales from mobile storage products, which include flash memory card controllers, USB flash drive controllers, card reader controllers, SSD controllers, and embedded flash controllers, increased 17% from 4Q06 to

(1) Unless otherwise stated, all financial information used in this
 press release is unaudited, consolidated, prepared in accordance with
 U.S. GAAP and denominated in New Taiwan dollars. U.S. 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.

US$38.0 million, and increased 15% from 3Q07. Unit shipments increased 44% from 4Q06 and increased 26% from 3Q07 to 89 million units as a result of favorable NAND flash market conditions and seasonal sales in the fourth quarter.

Net sales from mobile communication products, which include mobile TV tuners, CDMA RF ICs, and electronic toll collection (ETC) RF ICs, increased 46% from 3Q07 to US$11.5 million. Unit shipments of communication products increased 22% from 3Q07 to 6 million.

Net sales from multimedia SoC products, which include embedded graphics processors, MP3 SoCs, and PC camera SoCs, increased 15% from 4Q06, but declined 30% from 3Q07 to US$3.7 million. Unit shipments of multimedia SoC products increased 53% from 4Q06, but declined 68% from 3Q07, largely because of unfavorable MP3 SoC market conditions.

 ---------------------------------------------------------------------
 Unit Shipment
  (million units)       1Q06  2Q06  3Q06  4Q06  1Q07  2Q07  3Q07  4Q07
 ---------------------------------------------------------------------
 Mobile Storage         20.3  29.0  49.6  62.0  64.1  73.1  70.7  89.3
 ---------------------------------------------------------------------
 Mobile
  Communications                                       3.2   5.0   6.1
 ---------------------------------------------------------------------
 Multimedia SoCs         0.5   0.3   0.4   0.6   1.2   2.2   2.8   0.9
 ---------------------------------------------------------------------
 Others                  0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0
 ---------------------------------------------------------------------
 Total                  20.8  29.3  50.0  62.6  65.3  78.5  78.5  96.3
 ---------------------------------------------------------------------

Margins

Gross margin excluding stock-based compensation was 52.7%, which was slightly lower than 53.2% in 3Q07. GAAP gross margin was 52.5%, also slightly lower than 53.0% in 3Q07.

Operating expense excluding stock-based compensation, acquisition-related charges, and one-time items was 21.2% of net sales, which was slightly lower than 21.5% in 3Q07. Research and development expenses, selling and marketing expenses, as well as general and administrative expenses as a percentage of net sales were largely unchanged compared to the previous quarter. Stock-based compensation was US$2.2 million, which was approximately the same as in 3Q07. Acquisition-related charges in 4Q07 were approximately US$1.9 million and included US$0.1 million from our November 2007 mobile TV acquisition.

Operating margin excluding stock-based compensation, acquisition-related charges, and one-time items was 31.5%, which was slightly lower than 31.7% in 3Q07. GAAP operating margin was 23.9%, which was higher than 23.1% in 3Q07.

Earnings

Net income excluding stock-based compensation, acquisition-related charges, and one-time items increased 35% year-over-year to US$16.4 million in 4Q07. Diluted earnings per ADS excluding stock-based compensation, acquisition-related charges, and one-time items were US$0.47, up 24% from US$0.38 in 4Q06.

GAAP net income increased 16% year-over-year to US$11.9 million in 4Q07. Diluted GAAP earnings per ADS were US$0.35, an increase of 6% from US$0.33 in 4Q06.

Business Outlook:

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

 "We are closely monitoring signs of a potential deterioration in U.S.
 macroeconomic conditions.  Nevertheless, rapidly declining NAND flash
 prices continue to drive solid state product innovations, improve
 consumer affordability, and fuel storage device unit growth, as well
 as related demand for our controllers. Our concerns about U.S.
 economic slowdown are somewhat mitigated by the fact that a large
 part of our sales of card controllers and other products are used in
 devices that do not target US end markets. We expect our handset
 bundled card business, as well as sales to merchant card makers to
 continue to grow in 2008. Our card controller shipments to Samsung,
 for example, will probably increase at least 35% sequentially in the
 seasonally weak first quarter. We therefore remain cautiously
 optimistic about our storage business. We also expect to continue
 benefiting from the rapid growth of mobile TV in 2008, as growing
 interest in mobile TV by consumers in Asian markets leads to
 increasing adoption rates."

As a result, Management expects:

 * 1Q08 corporate revenue of approximately US$44 - 46 million, which
   represents a year-over-year increase of 22 - 27% and a quarter-
   over-quarter decrease of 14 - 18%, mainly because of seasonal
   factors
 * 1Q08 storage revenue of approximately US$34 - 35 million, which
   represents a seasonal quarter-over-quarter decrease of 8 - 10%
 * 2008 full year corporate revenue of US$225 - 235 million, which
   represents a 25 - 31% year-over-year increase and is largely in-
   line with our long-term annual growth target of 25 - 35%
 * Non-GAAP gross margin to remain in the 52- 53% range and GAAP gross
   margin to also remain in the 52- 53% range
 * Non-GAAP earnings per ADS of approximately US$1.95 - 2.05 and GAAP
   earnings per ADS of approximately US$1.55 - 1.65

Conference Call & Webcast:

The Company's management team will conduct a conference call at 8:00am Eastern Time on February 1.

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

    PRE-REGISTRATION:
    https://www.theconferencingservice.com/prereg/key.process?key=PKWXWPCL4

    CONFERENCE CALL ACCESS NUMBERS:
    USA (Toll Free): 1 888 679 8038
    USA (Toll): 1 617 213 4850
    Taiwan (Toll Free): 0080 144 4360
    Participant Passcode: 3700 1501

    REPLAY NUMBERS (for 7 days):
    USA (Toll Free): 1 888 286 8010
    USA (Toll): 1 617 801 6888
    Participant Passcode: 7694 5563

A webcast of the call will be available on the Company's website at www.siliconmotion.com.

Discussion of Non-GAAP Financial Measures

To supplement the Company's unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company discloses certain non-GAAP financial measures that exclude stock-based compensation and 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.

Impairment of long-term marketable securities relates to the other-than-temporary, non-operating write down of the Company's investments in Spright Co., Ltd. (formerly known as Flash Media Corporation) in 2006 and 2005. As the performance of Spright deteriorated in 2007, the Company determined that these shares have been other-than-temporarily impaired and therefore they were written down in the fourth quarter of 2007. These charges are not factored into the Company's internal evaluation of net income as it believes they are non-operating charges that do not impact the Company's core operating performance.

Gain from litigation settlement consists of a one-time payment in September 2006 by Phison Electronics Corporation to the Company for settlement of legal action filed by the Company in August 2002 against Phison for infringement of certain intellectual property rights to compact flash controller IC owned by the Company.

Write-off of other receivables consists of a one-time write-off in December 2006 of a US$1.2 million non-trade receivable, the collection of which we believed was doubtful. The Company did not have a similar write-off for the year ended December 31, 2007.

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

                            For the Three Months Ended
              --------------------------------------------------------


               Dec. 31,  Sep. 30,   Dec. 31,  Dec. 31,  Sep. 30,  Dec. 31,
                2006       2007       2007     2006      2007      2007
                (NT$)      (NT$)      (NT$)    (US$)     (US$)     (US$)
              ---------  ---------  ---------  ------   ------   --------

 Net Sales    1,170,679  1,497,494  1,732,115  36,099   46,176   53,411
 Cost of
  sales         544,336    704,289    822,623  16,785   21,717   25,366
              ---------  ---------  ---------  ------   ------   -------
 Gross
  profit        626,343    793,205    909,492  19,314   24,459   28,045
 Operating
  expenses
   Research &
    develop-
    ment        152,811    207,997    239,991   4,712    6,414    7,400
   Sales &
    marketing    61,446     75,839     82,365   1,895    2,339    2,540
   General &
    administra-
    tive         71,456    107,286    112,324   2,203    3,308    3,464
   In-process
    research
    and
    development
                     --         --      7,188      --       --      222
   Amortization
    of
    intangibles
    assets           --     55,994     53,237      --    1,727    1,642

   Gain from
    settlement
    on litiga-
    tion         (3,000)        --         --     (93)
   Write-Off
    of Other
    Receivable   40,039         --         --   1,236       --       --
              ---------  ---------  ---------  ------   ------   -------
 Operating
  income        303,591    346,089    414,387   9,361   10,671   12,777

 Non-operating
  income
  (expense)

   Gain on
    sale of
    invest-
    ments         5,268     10,545      6,108     162      325      188
   Interest
    income
    (net)        18,850      9,076      9,333     581      280      288
   Foreign
    exchange
    gain
    (loss)       (3,264)    (7,194)    (5,164)   (101)    (221)    (159)
   Impairment
    on long-
    term
    investment       --         --    (14,447)     --       --     (445)

   Others        (3,096)        10        775     (94)      --       24
              ---------  ---------  ---------  ------   ------   -------
   Subtotal      17,758     12,437     (3,395)    548      384     (104)
              ---------  ---------  ---------  ------   ------   -------
 Income before
  tax           321,349    358,526    410,992   9,909   11,055   12,673
 Income tax
  expense       (13,371)    30,523     24,603    (412)     941      759
              ---------  ---------  ---------  ------   ------   -------
 Net income     334,720    328,003    386,389  10,321   10,114   11,914
              =========  =========  =========  ======   ======   ======

 Basic
  earnings
  per ADS      NT$10.82     $10.00     $11.73   $0.33    $0.31    $0.36
 Diluted
  earnings
  per ADS      NT$10.60     $ 9.66     $11.39   $0.33    $0.30    $0.35

 Margin
  Analysis:
 Gross margin      53.5%      53.0%      52.5%   53.5%    53.0%    52.5%
 Operating
  margin           25.9%      23.1%      23.9%   25.9%    23.1%    23.9%
 Net margin        28.6%      21.9%      22.3%   28.6%    21.9%    22.3%

 Additional
  Data:
 Weighted avg.
  ADS
  equiv-
  alents(3)      30,941     32,815     32,934  30,941   32,815   32,934
 Diluted ADS
  equivalents    31,592     33,942     33,927  31,592   33,942   33,927

 (3) 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
                --------------------------------------------------------
                Dec. 31,  Sep. 30,   Dec. 31,  Dec. 31,  Sep. 30,  Dec. 31,
                2006       2007       2007     2006      2007      2007
                (NT$)      (NT$)      (NT$)    (US$)     (US$)     (US$)
              ---------  ---------  ---------  ------   ------   --------
 GAAP cost
   of sales      544,336  704,289   822,623   16,785  21,717   25,366
  Adjustment
   for share-
   based
   compensa-
   tion             (940)  (3,693)   (3,530)     (29)   (114)    (109)
                 -------  -------  --------  -------  ------   -------
  Non GAAP
   cost of
   sales         543,396  700,596   819,093   16,756  21,603   25,257
                 =======  =======  ========  =======  ======   ======

  GAAP
   operating
   income        303,591  346,089   414,387    9,361  10,671   12,777

  Adjustment
   for share-
   based
   compensa-
   tion
   within:
    Cost of
     sales           940    3,693     3,530       29     114      109
    Research &
     develop-
     ment          9,830   35,646    34,900      303   1,099    1,076
    Sales &
     marketing     4,186   13,584    13,540      129     419      418
    General &
     admini-
     strative      7,963   19,642    19,314      245     606      596
  In-process
   research
   and
   development        --       --     7,188       --      --      222
  Amortization
   of
   intangibles
   assets             --   55,994    53,237       --   1,727    1,642
  Gain from
   settlement
   on
   litigation     (3,000)      --        --      (93)     --       --
  Write-Off of
   Other
   Receivable     40,039       --        --    1,236      --       --
                 -------  -------  --------  -------  ------   -------
  Non-GAAP
   operating
   income        363,549  474,648   546,096   11,210  14,636   16,840
                 =======  =======  ========  =======  ======   ======

  GAAP Net
   income        334,720  328,003   386,389   10,321  10,114   11,914

  Adjustment
   for share-
   based
   compensation
   within:
  Cost of sales      940    3,693     3,530       29     114      109
    Research &
     development   9,830   35,646    34,900      303   1,099    1,076
    Sales &
     marketing     4,186   13,584    13,540      129     419      418
    General &
     administra-
     tive          7,963   19,642    19,314      245     606      596
  In-process
   research and
   development        --       --     7,188       --      --      222

  Amortization
   of
   intangibles
   assets             --   55,994    53,237       --   1,727    1,642
  Gain from
   settlement
   on litigation  (3,000)      --        --      (93)     --       --

 Write-Off of
   Other
    Receivable    40,039       --        --    1,236      --       --

  Impairment
   loss of
   investment         --       --    14,447       --      --      445
                 -------  -------  --------  -------  ------   -------


                             For the Three Months Ended
                -----------------------------------------------------

               Dec. 31,  Sep. 30,   Dec. 31,  Dec. 31,  Sep. 30,  Dec. 31,
                2006       2007       2007     2006      2007      2007
                (NT$)      (NT$)      (NT$)    (US$)     (US$)     (US$)
              ---------  ---------  ---------  ------   ------   --------

 Non-GAAP Net
  income         394,678  456,562  532,545    12,170   14,079   16,422
                 =======  =======  =======   =======  =======  =======

 Diluted earnings
  per ADS:

 GAAP              $10.6    $9.66   $11.39    $0.33    $0.30    $0.35
 Non-GAAP          $12.3   $13.03   $15.27    $0.38    $0.40    $0.47
 Shares used in
  computing
  diluted net
  income per
  share:
 GAAP             31,592   33,942   33,927   31,592   33,942   33,927
 Non-GAAP         32,075   35,028   34,865   32,075   35,028   34,865

 Gross margin

 GAAP               53.5%    53.0%    52.5%    53.5%    53.0%    52.5%
 Non-GAAP           53.6%    53.2%    52.7%    53.5%    53.2%    52.7%

 Operating margin

 GAAP               25.4%    23.1%    23.9%    25.4%    23.1%    23.9%
 Non-GAAP           27.3%    31.7%    31.5%    27.3%    31.7%    31.5%


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

                                           For the Year Ended
                                --------------------------------------
                                 Dec. 31,   Dec. 31,  Dec. 31, Dec. 31,
                                   2006       2007      2006     2007
                                  (NT$)      (NT$)     (US$)    (US$)
                                ---------  ---------  -------  -------
 Net Sales                      3,460,459  5,847,329  106,705  180,306
 Cost of sales                  1,612,019  2,757,101   49,708   85,017
                                ---------  ---------  -------  -------
 Gross profit                   1,848,440  3,090,228   56,997   95,289
 Operating expenses
  Research & development          502,225    822,746   15,486   25,370
  Sales & marketing               200,526    298,199    6,183    9,195
  General & administrative        219,395    381,749    6,765   11,771
  In-process research and
   development                         --     76,378       --    2,355

  Amortization of intangible
   assets                              --    163,704       --    5,048
  Gain from settlement on
   litigation                      (3,000)        --      (93)      --
  Write-Off of Other Receivable    40,039         --    1,234       --
                                ---------  ---------  -------  -------
  Subtotal                        959,185  1,742,776   29,577   53,739
                                ---------  ---------  -------  -------
 Operating income                 889,255  1,347,452   27,421   41,550

 Non-operating expense (income)
  Gain on sale of investments      17,857     26,886      551      829
  Interest income (net)            65,187     51,320    2,010    1,583
  Dividend income                      --        772       --       24
  Foreign exchange gain (loss)     (5,174)   (18,702)    (160)    (577)
  Impairment on long-term
   investment                          --    (14,448)      --     (446)
  Others                            1,398        803       43       25
                                ---------  ---------  -------  -------
  Subtotal                         79,268     46,631    2,444    1,438
                                ---------  ---------  -------  -------
 Income before tax                968,524  1,394,083   29,865   42,988
 Income tax expense                21,032     81,578      649    2,516
                                ---------  ---------  -------  -------
 Net income                       947,491  1,312,505   29,216   40,472
                                =========  =========  =======  =======

 Basic earnings per ADS          NT$30.75   NT$40.67  US$0.95  US$1.25
 Diluted earnings per ADS        NT$30.20   NT$39.38  US$0.93  US$1.21

 Margin Analysis:
 Gross margin                        53.4%      52.9%    53.4%    52.9%
 Operating margin                    25.7%      23.0%    25.7%    23.0%
 Net margin                          27.4%      22.5%    27.4%    22.5%

 Additional Data:
 Weighted average ADS
  equivalents                      30,813     32,270   30,813   32,270
 Diluted ADS equivalents           31,372     33,325   31,372   33,325


                Silicon Motion Technology Corporation
        Reconciliation of GAAP to Non-GAAP Operating Results
  (in thousands, except percentages and per share data, unaudited)

                                          For the Year Ended
                                --------------------------------------
                                 Dec. 31,   Dec. 31,  Dec. 31, Dec. 31,
                                   2006       2007      2006     2007
                                  (NT$)      (NT$)     (US$)    (US$)
                                ---------  ---------  -------  -------
 GAAP cost of sales             1,612,019  2,757,101   49,708   85,017
 Adjustment for share-based
  compensation                     (3,388)   (12,858)    (104)    (396)
                                ---------  ---------  -------  -------
 Non GAAP cost of sales         1,608,631  2,744,243   49,604   84,621
                                =========  =========  =======  =======

 GAAP operating income            889,255  1,347,452   27,421   41,550
 Adjustment for share-based
  compensation within:
  Cost of sales                     3,388     12,858      104      396
   Research & development          37,743    129,750    1,164    4,001
   Sales & marketing               13,522     48,703      417    1,502
   General & administrative        31,046     70,039      957    2,160
 In-process research and
  development                          --     76,378       --    2,355
 Amortization of  intangibles
  assets                               --    163,704       --    5,048
 Gain from settlement on
  litigation                       (3,000)        --      (93)      --
 Write-Off of Other Receivable     40,039         --    1,234       --
                                ---------  ---------  -------  -------
 Non-GAAP operating income      1,011,993  1,848,884   31,204   57,012
                                =========  =========  =======  =======

 GAAP Net income                  947,491  1,312,505   29,216   40,472
 Adjustment for share-based
  compensation within:
   Cost of sales                    3,388     12,858      104      396
   Research & development          37,743    129,750    1,164    4,001
   Sales & marketing               13,522     48,703      417    1,502
   General & administrative        31,046     70,039      957    2,160
 In-process research and
  development                          --     76,378       --    2,355
 Amortization of  intangibles
  assets                               --    163,704       --    5,048
 Gain from settlement on
  litigation                       (3,000)        --      (93)      --
 Write-Off of Other Receivable     40,039         --    1,234       --
 Impairment loss of investment         --     14,448       --      446
                                ---------  ---------  -------  -------
 Non-GAAP Net income            1,070,229  1,828,385   32,999   56,380
                                =========  =========  =======  =======

 Diluted earnings per ADS:
 GAAP                               30.20      39.38     0.93     1.21
 Non-GAAP                           33.77      53.20     1.04     1.64
 Shares used in computing
  diluted net income per share:
 GAAP                              31,372     33,325   31,372   33,325
 Non-GAAP                          31,689     34,368   31,689   34,368

 Gross margin
 GAAP                               53.4%      52.9%     53.4%    52.9%
 Non-GAAP                           53.5%      53.1%     53.5%    53.1%

 Operating margin
 GAAP                               25.7%      23.0%     25.7%    23.0%
 Non-GAAP                           29.2%      31.6%     29.2%    31.6%

 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$32.43 to
 US$1 on Dec. 31, 2007.





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

                             Dec. 31,    Dec. 31,   Dec. 31,  Dec. 31,
                               2006        2007       2006      2007
                              (NT$)       (NT$)       (US$)     (US$)
                            ----------  ----------  --------  --------
 Cash and cash equivalents   1,808,042   1,608,272    55,752    49,592
 Short-term investments      1,458,847   1,751,113    44,984    53,997
 Accounts receivable, net      841,764   1,007,384    25,956    31,063
 Inventories                   427,116     547,400    13,170    16,879
 Refundable deposits -
  current                       65,000     127,466     2,004     3,931
 Deferred income tax assets,
  net                          103,603      88,313     3,195     2,723
 Prepaid expenses and other
  current assets               244,832     227,043     7,550     7,001
                            ----------  ----------  --------  --------
 Total current assets        4,949,204   5,356,991   152,612   165,186

 Long-term investments         170,942     119,535     5,271     3,686
 Property and equipment
  (net)                        319,356     519,189     9,848    16,010
 Goodwill and intangible
  assets(net)                       --   2,460,277        --    75,864
 Other assets                   89,182     275,078     2,750     8,482
                            ----------  ----------  --------  --------
 Total assets               $5,528,684  $8,731,070  $170,481  $269,228
                            ==========  ==========  ========  ========

 Accounts payable              525,173     444,440    16,194    13,705
 Income tax payable            139,268     227,356     4,294     7,011
 Accrued expenses and other
  current liabilities          294,061     396,433     9,069    12,224
                            ----------  ----------  --------  --------
 Total current liabilities     958,502   1,068,229    29,557    32,940

 Accrued pension cost            1,018          --        31        --
 Other long-term
  liabilities                    1,040      78,611        32     2,424
                            ----------  ----------  --------  --------
 Total liabilities             960,560   1,146,840    29,620    35,364
 Shareholders' equity        4,568,124   7,584,230   140,861   233,864
                            ----------  ----------  --------  --------
 Total liabilities &
  shareholders' equity      $5,528,684  $8,731,070  $170,481  $269,228
                            ==========  ==========  ========  ========
 ---------------------------------------------------------------------

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 those uncertainties relating to litigation filed against the Company relating to whether its products are covered by patents not owned by the Company; 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; integration of our recently announced acquisitions 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.

CONTACT:  Silicon Motion Technology Corporation
          Investor Contact:
          Investor Relations
          Selina Hsieh
            +886 3 552 6888 x2311
            ir@siliconmotion.com
          Media Contact:
          Sara Hsu, Project Manager
            +886 2 2219 6688 x3509
            sara.hsu@siliconmotion.com.tw

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