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Press Release
 
October 30, 2008
 

Silicon Motion Announces Third Quarter Results for the Period Ended September 30, 2008

Third Quarter 2008, Oct 30, 2008 (GlobeNewswire via COMTEX News Network) --

Financial Highlights

 * Net sales decreased 7% quarter-over-quarter to US$45.0 million
 * Gross margin excluding stock-based compensation increased from
   47.3% in 2Q08 to 50.3%. GAAP gross margin increased from 47.1% in
   2Q08 to 50.0%
 * Operating margin excluding stock-based compensation, acquisition-
   related charges, and one-time items increased from 17.5% in 2Q08 to
   19.0%
 * Net income excluding stock-based compensation, acquisition-related
   charges, foreign exchange gain or loss, and one-time items
   decreased 1% quarter-over-quarter to US$8.7 million.  GAAP net
   income increased 313% quarter-over-quarter to US$8.1 million
 * Diluted earnings per ADS excluding stock-based compensation,
   acquisition-related charges, foreign exchange gain or loss, and
   one-time items were US$0.27, a 4% increase from US$0.26 in 2Q08.
   GAAP diluted earnings per ADS were US$0.26, a 333% increase from
   US$0.06 in 2Q08

 Business Highlights

 * Increased total unit shipments 36% year-over-year and 5% sequentially  
   to approximately 107 million units
 * Increased storage controller unit shipments 40% year-over-year and
   3% sequentially
 * Started production of controllers that support Samsung 42nm NAND
   flash, and are in sampling stage for controllers that support IM
   Flash 34nm, Hynix 41nm, and Toshiba 43nm NAND Flash
 * Achieved five T-DMB SoC design wins with LG, Samsung, and Pantech &
   Curitel for Korea mobile TV handsets
 * Shipped CMMB mobile TV tuners to Longcheer for China mobile TV
   handsets
 * Launched new CMMB mobile TV tuner design in partnership with two of
   China's leading mobile TV demodulator IC specialists, Innofidei
   and Telepath, for approximately 25 China handset OEMs
 * Developed the world's smallest and lowest power consumption ISDB-T
   mobile TV tuner-demodulator SoC in partnership with Japan's
   MegaChips for Japan, Brazil, and other markets
 * Received design win for our tri-band RF SoC (that combines CDMA and
   PCS with GPS, as well as an integrated LNA) for the Samsung Knack
   at Verizon Wireless

TAIPEI, Taiwan, Oct. 30, 2008 (GLOBE NEWSWIRE) - Silicon Motion Technology Corporation (Nasdaq:SIMO) (the "Company") today announced its third quarter 2008 financial results. Third quarter net sales decreased 7% quarter-over-quarter to US$45.0 million. GAAP net income increased 313% quarter-over-quarter to US$8.1 million, or US$0.26 per diluted ADS, compared to US$0.06 per diluted ADS in the second quarter of 2008.

Non-GAAP net income, which excludes stock-based compensation, acquisition-related charges, foreign exchange gain or loss, and one-time items, decreased 1% quarter-over-quarter to US$8.7 million, or US$0.27 per diluted ADS, compared to US$0.26 per diluted ADS in the second quarter of 2008.

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

"The third quarter, as we had previously communicated, was challenging because of weak conditions at end markets globally and many of our customers exited the previous quarter with excess flash card inventory. OEMs however have been aggressively working to reduce their inventory. Because of customer inventory reduction and related rebuilding, as well as strong sales in China, we were able to increase our overall card controller shipments by 12% sequentially. Our total storage controller shipments for the first nine months of this year rose 46% compared to the same period last year.

We believe that while consumer markets have been negatively impacted by macroeconomic issues, sales of NAND flash based storage devices, including memory cards, USB flash drives, SSDs, and embedded flash are showing some signs of resiliency. We believe there is still elasticity of demand, though perhaps less than during better times. Prices for flash components have been falling rapidly and in turn retail prices for storage devices using flash have also seen decreases. The falling prices have driven volume and increased adoption of NAND flash by OEMs, even as consumer confidence remains weak.

Market conditions are tough, but we continue to believe that the Company is well positioned because of our strong flash controller IP, market leadership, and investments to support growth applications whether relating to memory cards, SSDs, or mobile TV. Furthermore, the NAND flash industry is beginning the transition to sub-50 nm products. We have already started sampling our controllers for 34nm and other next generation flash. These controllers have been specifically developed to address issues relating to sub-50 nm flash endurance and reliability."

Third Quarter 2008 Financial Review (1)

Sales

Net sales in the third quarter totaled US$45.0 million, a decrease of 7% compared with the previous quarter. This quarter, mobile storage products accounted for 71% of net sales, mobile communications 19% of net sales, and multimedia SoCs 9% of net sales.

Net sales of mobile storage products, which include flash memory card controllers, USB flash drive controllers, card reader controllers, SSD controllers, and embedded flash controllers, decreased 10% from the second quarter of 2008 to US$31.9 million this quarter.

Net sales of mobile communication products, which include mobile TV IC solutions, CDMA RF ICs, and electronic toll collection (ETC) RF ICs, decreased 14% from the second quarter of 2008 to US$8.6 million this quarter.

Net sales of multimedia SoC products, which include embedded graphics processors, MP3 SoCs, and PC camera SoCs, increased 30% from the second quarter of 2008 to US$4.1 million this quarter.

Gross and Operating Margins

Gross margin excluding stock-based compensation increased to 50.3% from 47.3% in the previous quarter. GAAP gross margin increased to 50.0% from 47.1% in the previous quarter.

Operating expense excluding stock-based compensation, acquisition-related charges, and one-time items was US$14.1 million, which was slightly lower than US$14.5 million in the previous quarter. Research and development expenditures, excluding stock-based compensation, were US$7.7 million, which was lower than US$8.9 million in the previous quarter. Selling and marketing expenses excluding stock-based compensation were US$2.9 million, which was higher than US$2.3 million in the previous quarter. General and administrative expenses excluding stock-based compensation and litigation expenses were US$3.4 million, which was slightly higher than US$3.3 million in the previous quarter. Stock-based compensation was US$2.3 million, which was slightly more than US$2.2 million in the previous quarter. Acquisition-related charges were US$1.6 million, which was unchanged from the previous quarter. Litigation expenses decreased slightly from US$0.7 million in the previous quarter to US$0.5 million.

Operating margin excluding stock-based compensation, acquisition-related charges, and one-time items was 19.0%, which was higher than 17.5% in the previous quarter. GAAP operating margin was 9.1%, which was higher than 8.2% in the previous quarter.

(1) Unless otherwise stated, all financial information used in this press release is unaudited, consolidated, prepared in accordance with US GAAP and denominated in New Taiwan dollars. US dollar amounts are translated for convenience only. Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by independent auditors, to which we subject our audited consolidated financial statements, and may vary materially from the audited consolidated financial information for the same period. Any evaluation of the financial information presented in this press release should also take into account our published audited consolidated financial statements and the notes to those statements. In addition, the financial information presented is not necessarily indicative of our results for any future period.

Other Income and Expenses

Net total other income excluding net foreign exchange gain or loss was US$0.4 million, which was slightly less than US$0.6 million in the previous quarter. GAAP net total other income was US$4.2 million, which was significantly higher than US$0.4 million in the previous quarter.

Earnings

Net income excluding stock-based compensation, acquisition-related charges, net foreign exchange gain or loss, and one-time items was US$8.7 million in the third quarter, which was slightly less than US$8.8 million in the previous quarter. Diluted earnings per ADS excluding stock-based compensation, acquisition-related charges, net foreign exchange gain or loss, and one-time items were US$0.27, up 4% from US$0.26 in the previous quarter.

GAAP net income was US$8.1 million, which was significantly higher than US$2.0 million in the previous quarter. Diluted GAAP earnings per ADS were US$0.26, up 333% from US$0.06 in the previous quarter.

Balance Sheet

Cash, cash equivalents, and short-term investments decreased from US$95.0 million at the end of the second quarter of 2008 to US$59.5 million at the end of this quarter. The decrease was primarily due to the repurchase of our American Depositary Receipts (ADSs) and purchase of property and equipment. There were US$3.3 million in short-term borrowings at the end of the third quarter of 2008, which was similar to the previous quarter. Other long term liabilities, which are comprised of loans from the Korean government for R&D financing, decreased from US$1.4 million at the end of the second quarter of 2008 to US$1.2 million at the end of this quarter.

 Cash Flow
 ---------
 Our cash flows were as follows:

             3 months ended September 30, 2008
             ---------------------------------
                                                  (In US$ millions)
 Net income                                                    8.1
 Depreciation & amortization                                   1.0
 Changes in operating assets and liabilities                   8.0
 Others                                                        4.3
                                                             -----
  Net cash provided by (used in) operating
   activities                                                 21.4
                                                             =====
 Acquisition of property and equipment                        (6.4)
 Others                                                        1.3
                                                             -----
  Net cash provided by (used in) investing
   activities                                                 (5.1)
 Share repurchase                                            (24.5)
                                                             =====
 Others                                                        0.5
                                                             -----
  Net cash provided by (used in) financing
   activities                                                (24.0)
                                                             =====
 Effects of changes in foreign currency exchange
  rates on cash                                               (4.5)
                                                             -----
  Net decrease in cash and cash equivalents                  (12.2)
                                                             =====
 Pro-forma adjustment- foreign exchange translation           (3.7)
                                                             -----
  Pro-forma net decrease in cash and cash
   equivalents                                               (15.9)
                                                             =====

During the third quarter of 2008, Silicon Motion spent US$24.5 million to repurchase ADSs, made payment on the remaining US$2.0 million for our US$4.0 million Shanghai office space that was announced in the second quarter of 2008, and US$4.4 million for SAP software, IP licensing, design tools, and other assets.

Share Repurchase Program:

On August 15, 2008, the Company announced the completion of a US$40 million share repurchase program that was initiated on March 12, 2008 and announced a second US$40 million share repurchase program. In the third quarter of 2008, the Company repurchased 3.5 million ADSs for a total cost of US$24.7 million. The weighted average price per ADS repurchased was US$7.06.

Management Change:

As part of a Company restructuring, Johnson Yan, Vice President of Product Marketing, departed in the third quarter of 2008 to pursue other interests.

Business Outlook:

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

"Looking forward, although we believe we are well positioned, we continue to see a difficult environment over the next few quarters for companies involved in the NAND flash and mobile communications food chain. Our strategy of focusing on long-term OEM customers and on protecting our margins remains unchanged. Additionally, while we continue to prudently invest in projects for next generation solutions, cost containment and cost reduction will remain a top priority for our management team until market conditions recover."

For the fourth quarter of 2008, management expects:

     * Revenue to be flat to down 10% sequentially
     * Non-GAAP and GAAP gross margin to be in the 48- 50% range
     * Operating expense excluding stock-based compensation,
       acquisition-related charges, and one-time items of
       approximately US$15 to 16 million

Conference Call & Webcast:

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

 (Speakers)
  Wallace Kou, President & CEO
  Riyadh Lai, CFO
  Jason Tsai, Director of Investor Relations and Strategy

  PRE-REGISTRATION:
  https://www.theconferencingservice.com/prerekey.process?key=PX9B88CTH

  CONFERENCE CALL ACCESS NUMBERS:
  USA (Toll Free): 1 888 680 0860
  USA (Toll): 1 617 213 4852
  Taiwan (Toll Free): 0080 144 4360
  Participant Passcode: 9501 5432

  REPLAY NUMBERS (for 7 days):
  USA (Toll Free): 1 888 286 8010
  USA (Toll): 1 617 801 6888
  Participant Passcode: 3189 5890

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, acquisition-related charges and one-time items, 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 the second quarter of 2007 and the acquisition of Centronix in the fourth quarter of 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.

Litigation expenses consist of the legal expenses relating to complaints SanDisk filed in the US International Trade Commission and the US District Court for the Western District of Wisconsin.

Foreign exchange gains and losses consists of translation gains and/or losses of non-NT$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-NT$ currencies against the NT$.

FIN48 tax charge relates to uncertainties about income tax liabilities that had resulted from an arbitrary change in interpretation of tax codes by the Taiwan tax authorities following a routine review of our tax filings.

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

                                       For the Three Months Ended
                                  -----------------------------------
                                     Sep. 30,     Jun. 30,    Sep. 30,
                                       2007         2008        2008
                                      (NT$)        (NT$)       (NT$)
                                  ----------   ----------   ---------
 Net Sales                        1,497,494    1,475,747    1,402,544
 Cost of sales                      704,289      780,523      701,300
                                  ----------   ----------   ---------
 Gross profit                       793,205      695,224      701,244
 Operating expenses
  Research & development            207,997      305,203      277,440
  Sales & marketing                  75,839       83,093      106,347
  General & administrative          107,286      136,720      141,246
  In-process research and
   development                           --           --           --
  Amortization of
   intangibles assets                55,994       48,467       48,626
                                  ----------   ----------   ---------
 Operating income                   346,089      121,741      127,585

 Non-operating income (expense)
  Gain on sale of investments        10,545        5,816        1,774
  Unrealized holding gain (loss)
   on marketable securities             --           --          673
  Interest income (net)               9,076       10,488        9,419
  Foreign exchange gain (loss)       (7,194)      (7,329)     120,190
  Dividend income                        --        2,239           --
  Others                                 10           24            6
                                  ----------   ----------   ---------
  Subtotal                           12,437       11,238      132,062
                                  ----------   ----------   ---------
 Income before tax                  358,526      132,979      259,647
 Income tax expense                  30,523       73,161        6,258
                                  ----------   ----------   ---------
 Net income                         328,003       59,818      253,389
                                  ==========   ==========   =========

 Basic earnings per ADS          $    10.00   $     1.83   $     8.26
 Diluted earnings per ADS        $     9.66   $     1.79   $     8.22

 Margin Analysis:
 Gross margin                          53.0%        47.1%        50.0%
 Operating margin                      23.1%         8.2%         9.1%
 Net margin                            21.9%         4.1%        18.1%

 Additional Data:
 Weighted avg. ADS
  equivalents(2)                     32,815       32,775       30,681
 Diluted ADS equivalents             33,942       33,377       30,825
 ---------------------------------------------------------------------


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

                                      Sep. 30,    Jun. 30,    Sep. 30,
                                        2007        2008        2008
                                       (US$)        (US$)       (US$)
                                      --------    --------    --------
 Net Sales                              45,475     48,481       44,953
 Cost of sales                          21,387     25,642       22,477
                                      --------    --------    --------
 Gross profit                           24,088     22,839       22,476
 Operating expenses
  Research & development                 6,316     10,027       8,892
  Sales & marketing                      2,303      2,730       3,409
  General & administrative               3,258      4,491       4,527
  In-process research and
   development                              --         --          --
  Amortization of
   intangibles assets                    1,700      1,592       1,559
                                      --------    --------   --------
 Operating income                       10,511      3,999       4,089

 Non-operating income (expense)
  Gain on sale of investments              320        191          57
  Unrealized holding gain (loss)
   on marketable securities                 --         --          22
  Interest income (net)                    276        345         302
  Foreign exchange gain (loss)            (218)      (241)      3,852
  Dividend income                           --         74          --
  Others                                    --          1          --
                                      --------    --------   --------
  Subtotal                                378         370       4,233
                                      --------    --------   --------
 Income before tax                      10,889      4,369       8,322
 Income tax expense                        927      2,403         201
                                      --------    --------   --------
 Net income                             9,962       1,966       8,121
                                      ========    ========   ========

 Basic earnings per ADS               $  0.30     $  0.06     $  0.26
 Diluted earnings per ADS             $  0.29     $  0.06     $  0.26

 Margin Analysis:
 Gross margin                            53.0%       47.1%       50.0%
 Operating margin                        23.1%        8.2%        9.1%
 Net margin                              21.9%        4.1%       18.1%

 Additional Data:
 Weighted avg. ADS equivalents(2)      32,815      32,775      30,681
 Diluted ADS equivalents               33,942      33,377      30,825
 ---------------------------------------------------------------------
 (2)  Assumes all outstanding ordinary shares are represented by ADSs.
      Each ADS represents four ordinary shares.


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

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

                                    Sep. 30,     Jun. 30,    Sep. 30,
                                      2007         2008        2008
                                      (NT$)        (NT$)       (NT$)
                                   ---------   ---------    ---------
 GAAP net income                     328,003      59,818      253,389
 Stock-based compensation:
  Cost of sales                        3,693       3,045        3,799
  Research and development            35,646      35,410       37,057
  Sales and marketing                 13,584      12,856       15,199
  General and administrative          19,642      16,274       16,818
                                   ---------   ---------    ---------
   Total stock-based compensation     72,565      67,585       72,873
                                   ---------   ---------    ---------

 Acquisition related
  charges:
  Amortization of intangible
   assets                             55,994      48,467       48,626

 Litigation expenses                      --      20,405       16,975
 Foreign exchange loss (gain)          7,194       7,329     (120,190)
 FIN 48 tax charge                        --      64,328           --
                                   ---------   ---------    ---------

 Non-GAAP net income                 463,756     267,932      271,673
                                   =========   =========    =========

 Shares used in computing
  non-GAAP basic
  earnings per ADS                    32,815      32,775       30,681
                                   =========   =========    =========
 Shares used in computing
  non-GAAP diluted
  earnings per ADS                    35,028      34,386       31,805
                                   =========   =========    =========

 Non-GAAP basic earnings
  per ADS                          $   14.13   $    8.17    $    8.85
                                   =========   =========    =========
 Non-GAAP diluted earnings
  per ADS                          $   13.24   $    7.79    $    8.54
                                   =========   =========    =========

 Non-GAAP gross margin                  53.2%       47.3%        50.3%
 Non-GAAP operating margin              31.7%       17.5%        19.0%



                                        For the Three Months Ended
                                        --------------------------
                                      Sep. 30,   Jun. 30,     Sep. 30,
                                        2007       2008         2008
                                       (US$)      (US$)        (US$)
                                     ---------  ---------   ---------
 GAAP net income                        9,962      1,966        8,121
 Stock-based compensation:
  Cost of sales                           112        100          122
  Research and development              1,082      1,163        1,188
  Sales and marketing                     413        422          487
  General and administrative              596        535          539
                                    ---------   ---------   ---------

   Total stock-based
    compensation                        2,203      2,220        2,336
                                    ---------   ---------   ---------


 Acquisition related
  charges:
  Amortization of intangible
   assets                               1,700      1,592        1,559

 Litigation expenses                       --        670          544
 Foreign exchange loss (gain)             218        241       (3,852)
 FIN 48 tax charge                         --      2,113           --


 Non-GAAP net income                   14,083      8,802        8,708
                                      =======    =======      =======


 Shares used in computing
  non-GAAP basic
  earnings per ADS                     32,815     32,775       30,681
                                      =======    =======      =======

 Shares used in computing
  non-GAAP diluted
  earnings per ADS                     35,028     34,386       31,805
                                      =======    =======      =======


 Non-GAAP basic earnings
  per ADS                             $  0.43    $  0.27      $  0.28
                                      =======    =======      =======

 Non-GAAP diluted earnings
  per ADS                             $  0.40    $  0.26      $  0.27
                                      =======    =======      =======


 Non-GAAP gross margin                   53.2%      47.3%        50.3%
 Non-GAAP operating margin               31.7%      17.5%        19.0%



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

                              For the Nine Months Ended
                 -------------------------------------------------

                     Sep.30,    Sep. 30,      Sep. 30,    Sep. 30,
                       2007        2008          2007        2008
                      (NT$)       (NT$)         (US$)       (US$)
                    ---------    ---------   ---------   ---------

 Net Sales          4,115,214    4,464,364     124,729     143,805
 Cost of sales      1,934,478    2,258,767      58,632      72,759
                    ---------    ---------   ---------   ---------
 Gross profit       2,180,736    2,205,597      66,097      71,046
 Operating
  expenses
   Research &
    development       582,757      808,850      17,663      26,054
   Sales &
    marketing         215,834      271,021       6,542       8,730
   General &
    adminis-
    trative           269,424      414,475       8,166      13,351
   In-process
    research
    and
    development        69,189           --       2,097          --

  Amortization
   of intangible
   assets             110,467      145,899       3,348       4,700
                    ---------    ---------   ---------   ---------
  Subtotal          1,247,671    1,640,245      37,816      52,835
                    ---------    ---------   ---------   ---------
 Operating
  income              933,065      565,352      28,281      18,211

 Non-operating
  expense
   (income)
   Gain on
    sale of
    investments        20,778       16,839         629         542
   Unrealized
    holding
    gain (loss)
    on marketable
    securities             (3)        (449)         --         (14)

   Interest income
    (net)              41,987       30,448       1,273         980
   Investments
    income                772        2,239          23          72
   Foreign
    exchange
    gain (loss)       (13,539)      30,916        (410)        996
   Others                  30          186           1           7
                    ---------    ---------   ---------   ---------
   Subtotal            50,025       80,179       1,516       2,583
                    ---------    ---------   ---------   ---------
 Income before
  tax                 983,090      645,531      29,797      20,794
 Income tax
  expense              56,975       81,358       1,727       2,621
                    ---------    ---------   ---------   ---------
 Net income           926,115      564,173      28,070      18,173
                    =========    =========   =========   =========

 Basic earnings
  per ADS           NT $28.94    NT $17.53     US$0.88     US$0.56
 Diluted earnings
  per ADS           NT $27.99    NT $17.32     US$0.85     US$0.56


 Margin
  Analysis:
 Gross margin            53.0%        49.4%       53.0%       49.4%
 Operating
  margin                 22.7%        12.7%       22.7%       12.7%

 Additional
  Data:
 Weighted
  average
  ADS equivalents      32,036       32,183      32,036      32,183
 Diluted ADS
  equivalents          33,121       32,583      33,121      32,583

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$32.93 to US$1 for 3Q07, NT$30.44 to US$1 for 2Q08, and NT$31.2 to US$1 for 3Q08 based on the average of the noon buying rate for cable transfers of the NT dollar as certified for customs purposes by the Federal Reserve Bank of New York. Amounts from the balance sheet have been translated using the ending exchange rate for the period. The exchange rate was NT$32.43 to US$1 at the end of 4Q07, NT$30.36 to US$1 at the end of 2Q08, and NT$32.23 to US$1 at the end of 3Q08.

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

                                Dec. 31,      Jun. 30,       Sep. 30,
                                  2007          2008           2008
                                 (NT$)          (NT$)          (NT$)
                                --------      --------       --------

 Cash and cash equivalents      1,608,272      2,142,344     1,761,752
 Short-term investments         1,751,113        742,160       154,438
 Accounts receivable, net       1,007,384        948,415     1,241,724
 Inventories                      547,400        706,442       715,509
 Refundable deposits -
  current                         127,466        104,989        69,966
  Deferred income tax assets,
  net                              83,526         84,844       100,555
 Prepaid expenses and other
  current assets                  227,044        156,234       154,006
                                ---------      ---------     ---------
 Total current assets           5,352,205      4,885,428     4,197,950

 Long-term investments            119,535        119,055       119,475
 Property and equipment (net)     519,189        734,111       875,421
 Goodwill and intangible
  assets(net)                   2,849,437      2,744,952     2,691,141
 Other assets                     279,865        194,481       208,760
                                ---------      ---------     ---------
 Total assets                  $9,120,231     $8,678,027    $8,092,747
                               ==========     ==========    ==========

 Short-term borrowing                  --         99,821       105,071
 Accounts payable                 444,440        567,263       487,000
 Income tax payable               227,356        136,588       187,745
 Accrued expenses and other
  current liabilities             785,717        510,546       514,035
                                ---------      ---------     ---------
 Total current liabilities      1,457,513      1,314,218     1,293,851
 Accrued pension cost                  --            534           145
 Long-term liabilities             47,919         44,867        42,276
 Other liabilities                 30,692         65,141        55,739
                                ---------      ---------     ---------
 Total liabilities              1,536,124      1,424,760     1,392,011
 Shareholders' equity           7,584,107      7,253,267     6,700,736
                                ---------      ---------     ---------
 Total liabilities &
  shareholders' equity         $9,120,231     $8,678,027    $8,092,747
                               ==========     ==========    ==========


                                Dec. 31,      Jun. 30,       Sep. 30,
                                  2007          2008           2008
                                  (US$)         (US$)          (US$)
                                --------      --------       --------
 Cash and cash equivalents        49,592        70,565         54,662
 Short-term investments           53,997        24,445          4,792
 Accounts receivable, net         31,063        31,239         38,527
 Inventories                      16,879        23,269         22,200
 Refundable deposits -
  current                          3,931         3,458          2,171
 Deferred income tax assets,
  net                              2,576         2,795          3,120
 Prepaid expenses and other
  current assets                   7,001         5,146          4,778
                               ---------     ---------      ---------

 Total current assets            165,039       160,917        130,250

 Long-term investments             3,686         3,921          3,707
 Property and equipment (net)     16,010        24,180         27,162
 Goodwill and intangible
  assets(net)                     87,864        90,414         83,498
 Other assets                      8,629         6,406          6,477
                               ---------     ---------      ---------

 Total assets                   $281,228      $285,838       $251,094
                              ==========     ==========    ==========



 Short-term borrowing                 --         3,288          3,260
 Accounts payable                 13,705        18,685         15,110
 Income tax payable                7,011         4,499          5,825
 Accrued expenses and other
  current liabilities             24,227        16,816         15,949
                               ---------     ---------      ---------

 Total current liabilities        44,943        43,288         40,144
 Accrued pension cost                 --            18              4
 Long-term liabilities             1,478         1,477          1,312
 Other liabilities                   946         2,146          1,730
                               ---------     ---------      ---------

 Total liabilities                47,367        46,929         43,190
 Shareholders' equity            233,861       238,909        207,904
                               ---------     ---------      ---------

 Total liabilities &
  shareholders' equity          $281,228      $285,838       $251,094
                              ==========     ==========    ==========

About Silicon Motion:

We are a fabless semiconductor company that designs, develops and markets high performance, low-power semiconductor solutions for the multimedia consumer electronics market. We have three major product lines: mobile storage, mobile communications, and multimedia SoCs. Our mobile storage business is composed of microcontrollers used in NAND flash memory storage products such as flash memory cards, USB flash drives, SSDs, embedded flash applications, and card readers. Our mobile communications business is composed of mobile TV IC solutions, CDMA RF ICs, and electronic toll collection RF ICs. Our multimedia SoCs business is composed of products that support MP3 players, PC cameras, and embedded graphics applications.

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.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Silicon Motion Technology Corporation

Silicon Motion Technology Corporation 
          Investor Contact:
          Selina Hsieh, Investor Relations
            +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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