慧榮科技 (SIMO) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the fourth quarter 2011 Silicon Motion Technology Corporation earnings conference call.

My name is Edwin and I'll be your conference moderator for today.

At this time all participants are in a listen-only mode.

(Operator Instructions).

Before we begin today's conference, I have been asked to read the following forward-looking statements.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended.

Such forward-looking statements include, without limitation, statements regarding trends in the semiconductor industry and our future results of operations, financial condition and business prospects.

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 and our results 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, continued competitive pressure in the semiconductor industry and the impact of such pressure on prices; unpredictable changes in technology and consumer demand for multimedia consumer electronics; the state of and any change in our relationship with our major customers; and changes in political, economic, legal and social conditions in Taiwan.

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.

We assume no obligation to update any forward-looking statements which apply only as of the date of this press release.

With that I would now like to hand our presentation to our host Mr.

Jason Tsai, Director of IR and Strategy.

Please proceed, sir, thank you.

Thank you very much and good morning, everyone.

Welcome to Silicon Motion's fourth-quarter 2011 financial results conference call and webcast.

My name's Jason Tsai, I'm the Director of IR and Strategy.

With me here is Wallace Kou, our President and CEO, and Riyadh Lai, our Chief Financial Officer.

The agenda for today is as follows, Wallace will start with a review of some of our recent business developments, Riyadh will then discuss our fourth quarter financial results and provide our outlook, we will then conclude with Q&A.

Before we get started I'd like to remind you of our Safe Harbor policy which was read at the start of this call.

For a comprehensive overview of the risks involved in investing in our securities, please refer to our filings with the US SEC.

For more details on our financial results please refer to our press release, which has been filed on Form 6K after the close of market yesterday.

This webcast will be available for replay on our website www.siliconmotion.com for a limited time.

To enhance investors' understanding of our ongoing economic performance, we'll discuss non-GAAP information during this call.

We use non-GAAP financial measures internally to evaluate and manage our operations.

We have therefore chosen to provide this information to enable you to perform comparisons of our operating results in a manner similar to how we analyze our own operating results.

The reconciliation of GAAP to non-GAAP financial data can be found on our earnings release issued yesterday or on our website.

We ask that you review it in conjunction with this call.

With that I'd like to turn the call over to Wallace.

Thank you, Jason, and thanks to everyone for joining us on our fourth quarter earnings call.

I'm excited to speaking to you once again to report another stronger-than-expected quarter.

With revenue increasing by 6% sequentially to $67m, this quarter's revenue is our eighth consecutive quarter of sequential growth and the highest quarterly revenue in our Company's history.

I'm also delighted to report that after growing our revenue by a stellar 32% in 2010, we grew at an even faster 69% in 2011 to deliver $224m full-year revenue, the highest full-year revenue in our Company history.

2011 was a phenomenal year for Silicon Motion.

2011 was also a transformational year as our growth driver began transitioning from our core products, our cards and USB flash drive controllers to our new growth products, our LTE transceivers and SSD plus embedded controllers, of which eMMC is a part.

The success that we have made with our new growth products so far in entering the rapidly growing LTE segment of the smartphone market, as well as significantly extending the smartphone addressable market with our embedded memory controller has positioned us nicely on longer term growth trajectory.

First, let me share more about our fourth quarter result.

In the fourth quarter we delivered solid revenue growth while at the same time increasing gross margin back up to about 50%.

Our overall growth this quarter was driven by our bedrock NAND flash controller business, which accounted for 70% of our total revenue and grew 21% sequentially.

Our revenue this quarter benefited from continued strength of our mobile storage OEM business, together with unexpected growth from our module maker business.

These strengths more than offset the expected temporary mobile communications slowdown in the quarter.

As a result of solid growth and robust margin, we delivered diluted earnings per ADS of $0.47 this quarter and $1.35 for the full year.

Riyadh will discuss our financial performance in greater detail later in the call.

The OEM part of our mobile storage business increased by 35% sequentially and accounted for 50% of our overall flash controller sales in the fourth quarter as our NAND flash maker and Tier-1 consumer electronics OEM customers ramped device sales for the year-end holiday season.

Sales of our card controller for bundled cards increased sharply this quarter.

We are expecting continuing strong bundled sales through full-year 2012, although at a more tempered rate of growth.

For full-year 2011 our OEM sales increased well in excess of 100%.

OEM sales increased from a third of mobile storage sales in 2010 to about 45% last year.

Based on OEM programs that we have already won, we expect that in 2012 we can increase our OEM sales to over 50% of mobile storage sales.

In the fourth quarter, in addition to strong OEM sales, our module maker sales also performed unexpectedly well, with sales increase increasing by a solid 10% sequentially as module makers took advantage of another quarter of benign NAND flash market conditions to build memory cards and USB flash drives for sales primarily targeting China and other emerging markets.

In this quarter, two leading NAND flash makers released significant amount of TLC NAND flash inventory into the marketplace.

Last quarter, as you may recall, a different NAND flash maker released significant amounts of older MLC NAND flash cards into the marketplace.

In comparison to better visibility that we have with our OEM sales, this visibility relating to our module makers sales is more limited.

Nevertheless, given the strength of our technology leadership and quality of our solutions, we are the leading control advantage module maker when flash makers choose to release their memory.

Our investment in R&D for leading-edge controller technology continued to pay dividends as our ASP increased by 6% sequentially and 13% compared to the fourth quarter 2010.

Over 65% of our controller sales are for the 2X nanometer class of NAND flash, including controllers for the newest 19 to 21 nanometer class of NAND.

Sales of our TLC controllers increased over 60% sequentially to account for almost 50% of our overall controller sales.

I would now like to update you on the progress that we have been making in our eMMC.

In 2012 our embedded controllers are expected to contribute meaningfully and help drive our next lap of growth.

We began initially mass production of our eMMC controllers in the end of the fourth quarter, first with our module maker customers for our eMMC controllers targeting many greater China smartphone and tablet devices.

Mass production of our more significant eMMC projects for our NAND flash partners will begin in the first half of 2011.

We have already passed extensive design and qualification phase with our flash partners.

Our eMMC solutions have been designed into several Tier-1 global handset OEMs on multiple platforms.

Testing by these OEMs has so far been relatively smooth, so we anticipate that a majority of these projects will go into mass production in the first half of 2012.

Our eMMC revenue ramp will accelerate over 2012 as programs beginning initial production sales scale and new programs enter production.

We have developed one of the best eMMC controller solutions on the market today.

eMMC memory modules using our controllers are compatible with the majority of smartphones and the tablet application processors today.

Allowing OEM flexibility in designing their devices, our eMMC controller road map includes controllers for both current generations of the NAND flash as well as the future generation, involving SLC, MLC and TLC NAND flash.

eMMC is one of the two important growth drivers for 2012 and beyond.

We continue to believe that eMMC will account for 25% of our total corporate revenue in a few years time.

The other important growth driver for us is LTE transceivers.

Revenue from LTE and SSD plus embedded collectively our new growth products show, on a combined basis, doubled in 2012.

In 2011 our new growth products accounted for roughly 15% of total revenue.

New growth products should scale to about 25% of total revenue in 2012 by growing over 100%.

Now let me talk more about our LTE business.

As per our prior guidance, our mobile communications business declined as our LTE transceiver sales reverted this quarter to a more normalized rate of growth after Samsung's accelerated product build in the third quarter.

Communication revenue declined by 28% sequentially in the fourth quarter but, as we have said, this sequential correction is temporary and that we expect our communications business to grow again in the first quarter.

In the fourth quarter, Samsung began shipping their Galaxy Nexus smartphone to Verizon, which are using our LTE and CDMA transceivers.

We believe this is one of the best-selling smartphones at Verizon today.

Samsung is now using our LTE and CDMA transceivers in three smartphones and the tablet at Verizon.

We are excited by the lineup of new LTE smartphones that Samsung have in store for the market this year and we have already secured five design wins for Samsung LTE smartphones that are set to launch in the first half of 2012.

We believe Samsung is the clear leader today in providing LTE smartphones and we are proud to support them in leading the 4G LTE marketplace today.

Overall, I am very pleased by our performance and the execution in the fourth quarter and for all of 2011 and we have just begun with our next phase of growth involving our new growth products.

With that, I will now turn the call over to Riyadh to discuss our financial results and guidance.

Riyadh.

Thank you, Wallace.

First, I will outline our financial results for the fourth quarter and then I'll provide our first quarter and full-year 2012 guidance.

As Wallace had mentioned, this quarter we increased our revenue 6% sequentially and 68% compared to the same period a year ago and delivered $67.1m in revenue, a record high for Silicon Motion.

In the fourth quarter, mobile storage mix was 70% of sales, up from 61% in the third quarter.

Our mobile communications business decreased to account for 22% of our revenue mix in the fourth quarter, compared to 32% in the third quarter.

Multimedia decreased to 4% this quarter compared to 6% in the third quarter.

Let me recap the performance of our three key product lines for the benefit of our audience.

First, mobile storage; mobile storage revenue increased 21% sequentially and 61% year over year.

Mobile storage shipments increased 14% sequentially and 42% year over year.

ASPs increased by 6% sequentially as we sold more higher-value-added controllers.

Our ASPs this quarter increased 13% year over year, our eighth consecutive quarter of annual ASP increase.

For full-year 2011, our ASPs increased 9% after increasing 11% in full-year 2010.

Over 65% of our controller sales are for 2X nanometer NAND flash, including the new 19 to 21 nanometer flash.

As comparison, in the third quarter controllers for 2X nanometer flash was 50% to 55% of our controller sales.

TLC controller revenue in the fourth quarter increased over 60% sequentially and accounted for nearly 50% of our controller sales in the quarter; significantly higher than 35% in the third quarter.

OEM revenue increased by 35% sequentially and accounted for 50% of our controller sales in the fourth quarter.

Bundled card controllers remained well in excess of 50%.

Our card controller revenue increased by 28% sequentially and our USB controller revenue increased by 12% sequentially.

Moving to mobile communications; our communications business declined 28% sequentially as the accelerated build of 4G LTE smartphones by Samsung that we saw in the third quarter reverted to a more normalized level in the fourth quarter.

Our revenue from our multimedia SoCs, primarily our legacy graphics processor products, decreased by 22% sequentially.

Our corporate gross margin increased again in the fourth quarter to 49.8%, up 40 basis points from the reported 49.4% in the previous quarter, as we sold more higher-value-added controllers.

In the third quarter, operating spend increased to $16.6m from $14.8m due to higher project expenses, compensation expenses and higher headcount.

Headcount at the end of this quarter was 642 employees, 24 more than at the end of the previous quarter.

For full-year 2011 we added 55 headcount, primarily R&D engineers, to support our new growth products.

Incremental headcount then is largely in line with what we had communicated a year ago.

Operating margin decreased slightly to 25.1% this quarter from 26% last quarter.

Better profitability from higher revenue and gross margins this quarter was more than offset by higher R&D project expenses and higher compensation expenses.

We generated diluted earnings per ADS of $0.47 in the fourth quarter, up from $0.40 per ADS in the third quarter.

Overall, we are very pleased with our P&L performance this quarter.

Stock-based compensation in the fourth quarter declined to $2.8m from $2.9m in the third quarter.

I will now move to our balance sheet and cash flow.

Inventory days decreased to 81 days in the fourth quarter from 92 days in the third quarter.

DSOs increased slightly to 50 days in the fourth quarter compared to 49 days in the third quarter.

Table days increased to 48 days in the fourth quarter compared to 46 days in the third quarter.

In the fourth quarter, our cash balance increased to $21.9m -- increased by $21.9m to $91.7m at the period's end.

In terms of primary sources of cash, we generated $16.1m in net earnings and $6.2m from an increase in accounts payable.

In terms of primary uses of cash, an increase in accounts receivable consumed $2.1m and we invested $2.2m for testing equipment, software and design tools.

I will now move on to our guidance.

We are delighted with our solid performance in 2011 and excited about the growth opportunities that lie ahead of us in 2012.

Based upon the current design wins that Wallace had talked about earlier, we believe that revenue from our new growth products, LTE and SSD plus embedded, should scale and grow at least 100% to account for about 25% of our total corporate revenue in 2012.

We also expect continued growth from our card controllers, especially sales for smartphone bundled cards.

To support revenue growth in 2012 and beyond, we need to invest further in our R&D and other support resources and intend to increase our headcount with approximately 50 new employees.

We also anticipate higher tape-out and other related R&D project expenses.

Overall operating expense in 2012 will be 12% to 21% higher compared to 2011.

For the first quarter of 2012 we expect our overall mobile storage revenue to decline sequentially because of seasonal factors relating to our OEM customers and much stronger-than=expected build of cards and flash drives by module makers in the fourth quarter.

We believe our LTE transceiver business should grow sequentially as new handset design-wins begin to ramp, which should partially offset mobile storage weakness.

Let me point out that our much stronger-than-expected fourth quarter is a high basis for first quarter sequential comparisons, so what I mean is our first quarter of sequential change would have been less if our fourth quarter revenue had grown less.

For our first quarter guidance we expect first quarter revenue to be down 5% to 15% sequentially.

We expect first quarter gross margin to be within the 47% to 49% range.

We are targeting operating expenses to be in the range of $15.5m to $17m.

Stock-based compensation expense should be approximately $2.2m to $3m.

Our target model tax rate remains at 15%.

Now for our full-year 2012 guidance; we expect full-year 2012 revenue to increase by 20% to 30% as compared to 2011.

We expect full-year 2012 gross margin to be within the 48% to 50% range.

We are targeting full-year 2012 operating expense to be in the range of $65m to $70m.

Stock-based compensation expense should be approximately $14m to $17m.

Our target model tax rate for full-year 2012 is expected to be 15%.

We will now open the call for your questions.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session.

(Operator Instructions).

Your first question comes from the line of Daniel Amir from Lazard Capital.

Please ask your question.

Thanks a lot, congratulations on a great 2011 and great guidance for 2012.

So a couple of questions here to start with, first of all, on your LTE business can you reiterate what type of growth rates you expect for this year?

And then where we stand in terms of the competitive frontier as it seems like you've locked in already five design wins here for the first half of the year, which is probably the majority of Samsung's LTE phones now.

So where do we stand there?

And then I have a few follow-up questions.

Thanks.

First, we stated in last quarter's earning call we expect to share design model with Qualcomm inside Samsung's smartphones and tablets, and we believe Samsung will launch double the models than last year and probably more than double last year.

And we believe the unit shipment will be increased compared to last year, at probably more than 50%.

Daniel, let me add further to what Wallace had said.

Collectively, when you look at our growth products, our new growth products are LTE plus SSD plus embeddeds.

We're expecting that collective group of products, the revenue related to this to grow by about 100% in 2012.

So it's going to grow from roughly about 15% of our total revenue last year to roughly around 25% in 2012.

Okay, so a follow-up question on the SSD business, I guess you've focused in your prepared comments on the eMMC and LTE, where do we stand on SSD specifically, how does the pipeline look out, what type of product design are you focused on there?

Thanks.

So regarding SSD controllers into the notebook design I think starting from the second quarter we're going to see one major design ramp-up and from, probably it will be two to three will ramp-up in the second half this year.

Okay and is the focus on the SSD just on the notebook market or will you still be growing on the consumer industrial side?

We have quite a lot embedded SSD activity and design wins.

As we stated last quarter we have also a launch called embedded SSD solution called Ferri and Ferri is also doing well.

We are going to see reasonable revenue contribution in 2012.

We have a very established embedded SSD controller in the past few years but we are starting to enter in ultrabook and notebook markets this year.

Okay, then my final question and then I'll just get back into the queue.

In terms of the eMMC market, last quarter you gave an update on design wins or product ramps.

Where do we stand right now in terms of products shipped with your product and what type of design win activity do you have here for this year at this point?

Thanks.

In the last quarter we announced we have 12 major designs and of the 12 major designs we expect, I think two are already -- three are already moving to production in Q4.

We expect the remaining nine will all move to production before the end of the second quarter and we expect we're going to gain more designs in the second half of 2012.

We work both with the module makers as well as the flash makers.

Okay great, thanks a lot.

Thank you.

Your next question comes from the line of Anthony Stoss from Craig-Hallum.

Please ask your question.

Hey guys, my congrats also.

Can you talk about the share environment?

Do you think you're picking up share in your core business?

Also given the strength of your ASPs I'd love to hear your views on the pricing environment.

And, last but not least, Wallace, if you could chat with us on your plans for USB 3.0.

Thanks.

I don't know, we think we gained market share especially in Q4.

I don't know the overall total market shipment but I think that both OEM business as well as the module maker business looks very strong.

Even in coming to the first quarter, OEM business has maintained very strong, although this week the (inaudible) price declined sharply, we don't know why, but the demand is still there.

So we have a much better visibility, even with the module maker business.

We believe we definitely gained market share particularly for USB business.

Regarding USB 3.0 we're going to ramp up our product in late March and early Q2.

We believe we have at least a dozen designs right now so we're positioned to do high performance.

We don't believe USB 3.0 will replace 2.0 completely, even in the next two years, because of the price difference; however, we believe we're going to take a leading position in USB 3.0 controller and market share.

Okay great, thank you.

Thank you.

Your next question comes from the line of Raj Gill from Needham & Company.

Please ask your question.

Yes, thanks and congrats as well.

On the LTE business, having it being up sequentially in Q1, can you maybe provide some color, do you think it will be at the same run rate that you were doing in Q3?

And if you could maybe comment -- Q3 2010 -- Q3 2011 -- and can you comment also on the pricing of those LTE transceivers, would you see some degradation in pricing in 2012?

Any comment there would be helpful.

Sorry, we cannot give you a specific number regarding module shipments, it's very confidential and really we don't know the detail because if the module is domestic out of a certain region, if some modules are international, worldwide and the number will be large, but we cannot give you detailed information regarding the number of shipments.

Right, but will it be at some sort of run-rate that you did in Q3, or you can't provide details on that?

Well, we're expecting the LTE business to continue to ramp pretty much sequentially over the four quarters of this year but, of course, last quarter the percentage growth rate was very sharp because we came from next to nothing to a business that was beginning to contribute nicely to our revenue and now we're building upon that basis so the percentage is going to come down somewhat.

But overall when you look at our revenue expectations for our LTE plus or SSD plus embedded we're expecting this to grow very strongly, annually on a 100% growth rate.

So these products are going to be very important growth drivers for us.

Yes, definitely.

If you could remind again the visibility you get from Samsung, is it a three- to six-month rolling forecast from Samsung's LTE program?

Yes, for our OEMs we typically have three-month rolling forecasts, we also see where the various designs that are going to be coming to market but that's different from the rolling forecast obviously.

Okay, and if you could maybe characterize the NAND supply environment in the first half, given Samsung's commentary and SanDisk's commentary.

You are guiding down on a sequential basis, you're seeing a drop off in module maker business, albeit at a higher rate in Q4, I understand that.

But maybe if you could describe a little bit about what you're seeing in the supply and demand environment and the NAND market first half?

I think the first half NAND supply is sufficient.

I don't believe we're going to see shortages in the first half, but the second half it is possible.

In the first half we see probably Toshiba, SanDisk will supply more NAND wafers and components to the market and Samsung was selling more product to the market instead of the wafers.

I think different flash makers have different strategies based on their investment and their market share but we definitely think the supply will be sufficient in the first half of 2012.

Let me add further to what Wallace said.

For the full year we're expecting bits from all the NAND flash suppliers to grow probably around 75% bit growth this year so that compares very similarly to what we saw last year, bit growth about 80%.

It's a little bit less but only marginally so even with the push out of next phase fab start-ups in Japan.

You've got Hynix planning to accelerate based on what they recently reported so the environment still looks very healthy.

The last question for me on eMMC, it's a good ramp that's happening.

Maybe you could describe again the rationale for the flash maker Samsung to outsource the eMMC controller to you guys as well as maybe Phison and others.

Basically why are they shifting from internal to external (multiple speakers)

So (multiple speakers) have many different types and categories, there's high-performance high-density eMMC, there's low-density high-performance eMMC, there's MLC, there's SLC, and you're going to see TLC eMMC, or you already see it from SanDisk, you're going to see from Samsung maybe in the second half of this year.

So there's so many different types and requirements, it needs a different technology, different SRAM size to support the requirements, that's why sometimes Samsung don't have enough internal resources, they outsource then to some third parties.

But different companies have different strategies to do their plans.

We just, we are honored to be selected as major partner to supply the eMMC controllers for some flash makers.

Thank you very much.

Thank you.

Your next question comes from the line of Mike Crawford from B.

Riley & Company.

Please ask your questions.

Thank you very much.

So you touched a little bit on SanDisk slowing -- halting expansion at Yokkaichi but yet you're seeing Hynix at least plan to accelerate.

At what level would you start to worry about bit shipments growing that would be slow enough that would allow some of your competitors to catch up to your technology?

Well, overall, Mike, we're expecting fairly robust growth of bits despite plans to decelerate further move-ins of equipment into existing fabs.

You have fabs that continue to be, equipment that were placed previously continue to come on stream, yield's improving and so forth.

And you have Hynix, based on what they recently talked about in their earnings to -- their call with investors, they talked about pulling in, accelerating the installation equipment into their existing fabs so overall we're expecting a fairly reasonable and strong bit growth this year despite all the chatter.

So let me add a comment.

Our controller already support all from 19 to 21 nanometer MLC and TLC NAND, we're working for all flash makers and since even six months ago for 15 nanometer, 16 nanometer NAND flash technology.

So we believe we are ahead of many players in the market and we have a very, very unique technology in eMMCs, especially for LDPC and that's why we believe we will be ready, even ahead NAND moving to mass production.

Okay, thank you, Wallace.

Also I want to touch on the SSD strategy.

So you're starting to enter the notebook and ultrabook market but is that going to be with a Ferri-branded product or are you going to have, is this going to something that's branded at all?

No, I think in the past we've been really focused on PC, or ultrabook SSD and we're going to try to put more focus, because the market is growing, we see there is an opportunity for us, especially for the cache-based SSD for like in SATA and we try and work with the flash partners and to be through their platform and moving to major OEMs and PC makers.

So far I think we have one program we'll be ready to ramp in the second quarter and hopefully we can gain more designs in the second half of this year.

Okay, thank you.

Then last question relates to the LTE design wins you have, so I guess Samsung has pushed out launch of some of these phones to Q2 but that's fine.

Are these phones, so far your strength has been in the North American market, how many markets, where are these other five design wins targeted?

Mike, let me first correct what you just said.

There are no delays, these are design wins that we're expecting to roll out, these are not programs that had experienced delays.

We've rolled out very nicely with a large number of programs at several carriers and we recently received five new projects that are also going to go into mass production over the next two quarters.

So there are no delays whatsoever.

Okay, thank you, Riyadh, but what markets are those carriers in?

Primarily in North America, some will be in other countries.

Okay, thank you very much.

Thank you.

(Operator Instructions).

Your next question comes from the line of Tom Sepenzis from Northland Securities.

Please ask your question.

Hi, guys, congratulations on another wonderful quarter.

I just wanted to touch on the TV IC business since no one's really talked about that at all and what you're seeing there?

I know that a small carrier in the US is aiming to try and get that going in the North American market this year and I'm wondering how you would characterize that business and if you have any expectation that we could see growth there again.

I'm sorry, could you repeat your question again there was some disturbance on our end.

Oh I'm sorry, I just wanted to see if you could give us some kind of guidance on the TV IC business.

I know that's largely ignored and I know there's a couple of, there's a small carrier in the US that's trying to introduce television on the cell phone business this year and I'm wondering if you're seeing any kind of movement from anyone else and if we could expect growth from that business again.

The mobile TV business is experiencing growth in pockets, it has not rolled out as expected but it is still growing very nicely in Korea, it's growing nicely in China, in Japan it's already scaled out and, of course, Brazil and Latin America.

The significance of this business to us while it's still growing has lessened as our LTE business has scaled, put it that way.

Great, thank you and congratulations.

Thank you.

Next we have a follow-up question from the line of Daniel Amir from Lazard Capital.

Please ask your question.

Yes, thanks a lot.

Just one follow up, can you highlight again the ASP change in the mobile storage business this year, or in 2011 and what you think it could be in 2012?

Thanks.

ASPs for our mobile storage controllers were up 13% year on year so we've grown very nicely for two years, eight consecutive quarters of ASP increases, so that's quite exciting.

But we, there's also a combination of products -- our product mix that's blending it up, but we're planning conservatively flat ASPs while we would obviously like to see continued ASP increases.

Okay, so what was the -- I may have missed something -- what was the comment around 9% then?

Oh, I'm sorry, 9% was last year and 11% was 2010.

Okay, so your ASPs increased 9% in 2011 then?

Yes, correct.

Okay thank you.

Thank you.

(Operator Instructions).

There are no further questions at this time, I would now like to hand the conference back to today's presenter.

Please continue, sir.

I would like to thank all of you for joining us today and your continuing interest in Silicon Motion.

In February, we will be presenting at the Deutsche Bank Small and Mid-Cap Conference in Florida, and in March the Bank of America Merrill Lynch Conference in Taipei.

Thank you and goodbye for now.

Ladies and gentlemen, that does conclude our conference for today.

Thank you for participating.

You may all disconnect.