Silicon Motion Technology Corporation Q1 FY2026 earnings call

Wallace mentioned record revenue of $342.1 million, strong performance across embedded EMC/UFS, ASD business, ferrite and boot drive storage. Discussed market challenges like NAND price rise, AI demand impact. Talked about EMC and UFS business with mobile market share gains, ASD business including client-side and MonTitan enterprise controller growth, ferrite and boot drive storage scaling new projects.

In the first quarter, sales increased 23% sequentially and 105% year-on-year to $342.1 million. Embedded EMC and UFS saw strong performance with mobile business up between 30%-35% sequentially and over 140% year-over-year. ASD controller business revenue declined ~10% sequentially but up ~45% year-over-year. Ferrite and boot drive storage business delivered exceptional performance with scaling new projects. EMC majority in smart devices, automotive etc. while UFS majority in handsets. MonTitan enterprise controller business growing rapidly with customer ramping and design wins.

Expect sequential growth throughout 2026. Second quarter revenue expected to grow 15-20% sequentially to 393-411 million. Gross margins expected to increase to 48.5-49.5% in Q2. MonTitan to begin ramping more meaningfully in Q2. Anticipate full year 2026 to be a record revenue year with growth across segments.

Continued competitive pressure in semiconductor industry, effect on prices. Unpredictable changes in technology and consumer demand. State of and change in relationship with major customers. Changes in political, economic, legal, and social conditions in Taiwan. T-con material supply challenge for BJA substrate.

Q: Could you rank segments on growth for 2Q?

A: Anticipate stronger growth from automotive, ferrite, boot drives and rest of products.

Q: Mix of EMC/UFS handset vs broad markets?

A: UFS majority in handsets, EMC majority in smart devices, automotive etc.

Q: Boot drive revenue trajectory?

A: Boot drives and ferrite to be more meaningful contributors in Q2 and 2026.

Q: MonTitan customer ramp?

A: Ramping in production with 2 customers, 5 additional major customers from CSP by late year.

Q: Client SSD controller pull forward demand?

A: NAND supply shortage benefits Silicon Motion, continue to gain market share.

Q: Share gain momentum in mobile/PC?

A: Continue to gain market share as NAND makers outsource more.

Q: TAM and market share for MonTitan?

A: Mount Titan to grow to at least 5%-10% aligned with 2026 revenue.

Q: Price pass through for material costs?

A: Aim to maintain gross margins in 48%-50% range.

Q: Supply availability next year?

A: For 2027, start providing POs in advance, sourcing from three flash makers, OPEX to be higher in certain quarters but margins expected to improve.