慧榮科技 (SIMO) 2021 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Silicon Motion Technology Corporation's First Quarter of 2021 Earnings Conference Call. (Operator Instructions)

美好的一天，感謝您的支持。歡迎參加 Silicon Motion Technology Corporation 的 2021 年第一季度收益電話會議。 （操作員說明）

This conference call 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.

本次電話會議包含 1933 年證券法第 27A 條和經修訂的 1934 年證券交易法第 21E 條含義內的前瞻性陳述。此類前瞻性陳述包括但不限於有關半導體行業趨勢以及我們未來經營業績、財務狀況和業務前景的陳述。儘管此類聲明基於我們自己的信息和來自我們認為可靠的其他來源的信息，但您不應過分依賴它們。

These statements involve risks and uncertainties and actual market trends and 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 effect 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 conference call.

由於各種原因，這些陳述涉及風險和不確定性，實際市場趨勢和結果可能與這些前瞻性陳述中明示或暗示的內容存在重大差異。潛在的風險和不確定性包括但不限於半導體行業的持續競爭壓力以及這種壓力對價格的影響、技術的不可預測變化和消費者對多媒體消費電子產品的需求、我們與我們的主要客戶以及台灣政治、經濟、法律和社會狀況的變化。有關這些風險和不確定性以及其他因素的更多討論，請參閱我們不時向證券交易委員會提交的文件。我們不承擔更新任何前瞻性陳述的義務，這些陳述僅適用於本次電話會議之日。

And please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference over to your first speaker for today, Mr. Chris Chaney, Director of Investor Relations and Strategy. Please go ahead.

請注意，今天的會議正在錄製中。 （操作員說明）我現在想將會議交給您今天的第一位發言人，投資者關係和戰略總監 Chris Chaney 先生。請繼續。

Thank you, Annie. Good morning, everyone, and welcome to Silicon Motion's First Quarter 2021 Financial Results Conference Call and Webcast. As Annie mentioned, my name is Chris Chaney. I'm the Director of Investor Relations. Joining me today on this call are Wallace Kou, our President and CEO; and Riyadh Lai, our Chief Financial Officer. Following my comments, Wallace will make -- will provide a review of our key business developments, and then Riyadh will discuss our first quarter results and our outlook. We will then conclude with a question-and-answer period.

謝謝你，安妮。大家早上好，歡迎參加 Silicon Motion 2021 年第一季度財務業績電話會議和網絡直播。正如安妮所說，我的名字是克里斯·錢尼。我是投資者關係總監。今天和我一起參加這次電話會議的是我們的總裁兼首席執行官 Wallace Kou；和我們的首席財務官 Riyadh Lai。根據我的評論，華萊士將對我們的關鍵業務發展進行審查，然後利雅得將討論我們的第一季度業績和我們的前景。然後，我們將以問答時間結束。

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 and uncertainties involved in investing in our securities, please refer to the filings with the U.S. and -- U.S. Securities and Exchange Commission. For more details on our financial results, please refer to our press release, which was filed on Form 6-K after the close of the market yesterday. This webcast will be available for replay in the Investor Relations section of our website for a limited time.

在我們開始之前，我想提醒您我們的安全港政策，該政策在本次電話會議開始時已閱讀。如需全面了解投資我們的證券所涉及的風險和不確定性，請參閱提交給美國和美國證券交易委員會的文件。有關我們財務業績的更多詳細信息，請參閱我們的新聞稿，該新聞稿在昨天收市後以 6-K 表格形式提交。該網絡廣播將在我們網站的投資者關係部分限時重播。

To enhance investors' understanding of our ongoing economic performance, we will 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 matter similar to how we analyze our own operating results. The reconciliation of our GAAP to non-GAAP financial data can be found in our earnings release issued yesterday. We ask that you review it in conjunction with this call.

為了增強投資者對我們持續經濟表現的了解，我們將在本次電話會議中討論非公認會計原則信息。我們在內部使用非公認會計原則財務指標來評估和管理我們的運營。因此，我們選擇提供此信息，以使您能夠以類似於我們分析我們自己的經營業績的方式對我們的經營業績進行比較。我們的 GAAP 與非 GAAP 財務數據的對賬可以在我們昨天發布的收益報告中找到。我們要求您在本次電話會議中對其進行審查。

And with that, I'd like to turn the call over to Wallace.

有了這個，我想把電話轉給華萊士。

Thank you, Chris. Hello, everyone, and thank you for joining us today. In the first quarter, we delivered record sales and EPS. Sales grew 27% sequentially to a record $182 million, and earnings per ADS were a record $1.11. Our strong revenue growth was driven by strong sales of both our SSD controllers and eMMC+UFS controllers, with both products achieving record quarterly highs.

謝謝你，克里斯。大家好，感謝您今天加入我們。在第一季度，我們實現了創紀錄的銷售額和每股收益。銷售額環比增長 27%，達到創紀錄的 1.82 億美元，每份 ADS 收益達到創紀錄的 1.11 美元。我們強勁的收入增長是由我們的 SSD 控制器和 eMMC+UFS 控制器的強勁銷售推動的，這兩種產品均創下季度新高。

The outlook of upcoming quarter and the rest of the year continues to be very strong. And as we have secured additional wafers from our foundries, we are raising our full year outlook. Our order book remain very strong and continue to exceed our ability to supply. Looking to next year, we expect solid growth based on continued strong demand from our products and available foundry supply.

下一季度和今年剩餘時間的前景繼續非常強勁。由於我們已經從我們的代工廠獲得了更多的晶圓，我們正在提高我們的全年展望。我們的訂單仍然非常強勁，並繼續超出我們的供應能力。展望明年，基於我們產品的持續強勁需求和可用的代工供應，我們預計將實現穩健增長。

We are excited about our trajectory this year. Applications that use SSD and eMMC+UFS are doing well. Adoption of these solutions is growing and, furthermore, we are growing our market share. Let me discuss key factors driving our growth this year.

我們對今年的發展軌跡感到興奮。使用 SSD 和 eMMC+UFS 的應用表現良好。這些解決方案的採用正在增長，此外，我們正在擴大我們的市場份額。讓我討論一下推動我們今年增長的關鍵因素。

First, our SSD controllers. While the PC market is experiencing modest growth and SSD attach rate continue to rise, which are all beneficial for growth of our SSD controllers, the primary reason our controller are growing rapidly is market share gains. Several of our customers have been gaining market share, and we have also been gaining share at our customers.

首先，我們的 SSD 控制器。雖然 PC 市場正在經歷溫和增長，SSD 連接率持續上升，這對我們的 SSD 控制器的增長都是有利的，但我們的控制器快速增長的主要原因是市場份額的增加。我們的一些客戶已經獲得了市場份額，我們也在我們的客戶中獲得了份額。

Our customers have also been upsizing their order to us as they consolidate their procurement. We have been gaining SSD controller market share and expect to continue this trend. We have resized the client SSD market, and now believe our market share last year was in the 25% to 30% range. Based on our strong controller sales growth this year, which will primarily be driven by PCIe Gen3 SSD and OEM programs, we believe we should pick up 5 to 10 percentage points of market share.

我們的客戶在整合採購時也一直在增加對我們的訂單。我們一直在獲得 SSD 控制器的市場份額，並希望繼續保持這一趨勢。我們調整了客戶端 SSD 市場的規模，現在相信我們去年的市場份額在 25% 到 30% 之間。基於我們今年強勁的控制器銷售增長，這將主要由 PCIe Gen3 SSD 和 OEM 計劃推動，我們相信我們應該獲得 5 到 10 個百分點的市場份額。

Our market share is increasing because our PCIe Gen3 PC OEM programs, which we had discussed extensively in the past, are scaling. We are -- will be shipping our Gen3 SSD controller to 6 of 7 NAND flash makers. We are also shipping our Gen3 controller to several module maker with PC OEM programs. SSD using our Gen3 controller will be used by all of our global PC OEMs. Additionally, we are gaining market share because our small merchant competitors and the captive controller resources of NAND flash makers are both also facing foundry supply issues.

我們的市場份額正在增加，因為我們過去廣泛討論過的 PCIe Gen3 PC OEM 計劃正在擴展。我們將向 7 家 NAND 閃存製造商中的 6 家運送我們的 Gen3 SSD 控制器。我們還通過 PC OEM 程序將我們的 Gen3 控制器運送給多個模塊製造商。使用我們的 Gen3 控制器的 SSD 將被我們所有的全球 PC OEM 使用。此外，我們正在獲得市場份額，因為我們的小型商業競爭對手和 NAND 閃存製造商的專屬控制器資源也都面臨代工供應問題。

Our momentum will pick up further when our PCIe Gen4 SSD controller start ramping. Our Gen4 controller will start shipping in the middle of this year, initially with a few PC OEM using Intel Tiger Lake platform. We expect our Gen4 OEM program to scale quickly next year when Intel's Alder Lake platform become widely available. Based on the size of our current Gen4 design win for OEM programs, when fully ramped, we believe our controller will be used in about half of our PC OEM Gen4 SSDs.

當我們的 PCIe Gen4 SSD 控制器開始加速時，我們的勢頭將進一步加快。我們的 Gen4 控制器將於今年年中開始出貨，最初由一些使用 Intel Tiger Lake 平台的 PC OEM 廠商提供。我們預計明年英特爾的 Alder Lake 平台廣泛可用時，我們的 Gen4 OEM 計劃將迅速擴展。根據我們當前為 OEM 計劃贏得的第 4 代設計的規模，當全面升級時，我們相信我們的控制器將用於我們大約一半的 PC OEM 第 4 代 SSD。

Let me add that we continue to outgun the competition. Last year, our client SDD controller share in the merchant market was 4x bigger than our closest competitor. And we expect our market share to grow further as more of our OEM SSD programs enter production and scale.

讓我補充一點，我們繼續在競爭中勝出。去年，我們的客戶 SDD 控制器在商戶市場的份額是我們最接近的競爭對手的 4 倍。隨著我們更多的 OEM SSD 項目進入生產和規模化，我們預計我們的市場份額將進一步增長。

Now turning to our eMMC+UFS controllers, which are primarily used in smartphone and IoT devices. For smartphones this year, we are benefiting from an industry recovery. Additionally, with smartphone embedded storage technology continuing to rapidly transition from legacy eMMC to UFS, our UFS controller sales will continue to scale rapidly as we further benefit from this trend.

現在轉向我們的 eMMC+UFS 控制器，主要用於智能手機和物聯網設備。對於今年的智能手機，我們受益於行業復甦。此外，隨著智能手機嵌入式存儲技術繼續從傳統 eMMC 快速過渡到 UFS，我們的 UFS 控制器銷售將繼續迅速擴大，因為我們進一步受益於這一趨勢。

Furthermore, we expect our share gains to increase our customer gain UFS market share. We believe our U.S. NAND flash partner using our highly competitive, jointly developed UFS controller with their industry-leading NAND and mobile DRAM technology will continue to outperform. We are also seeing positive customer engagement by our Chinese module makers and other customers with their UFS programs.

此外，我們預計我們的份額收益將增加我們客戶獲得的 UFS 市場份額。我們相信，我們的美國 NAND 閃存合作夥伴使用我們極具競爭力、聯合開發的 UFS 控制器及其行業領先的 NAND 和移動 DRAM 技術將繼續表現出色。我們還看到我們的中國組件製造商和其他客戶通過他們的 UFS 計劃積極參與客戶。

In the legacy eMMC segment, we continue to be positively surprised by both sustained power of eMMC and the expansion of our market opportunities. eMMC remains ideal storage solution for application that do not require large data storage capacity and are price-sensitive, and will continue to be widely used for the foreseeable future by low-cost smartphones as well as IoT and other non-smartphone application, such as smart TV, streaming, dongles, setup box, smart speaker and mainstream Chromebooks.

在傳統 eMMC 領域，我們繼續對 eMMC 的持續力量和我們市場機會的擴大感到驚訝。對於不需要大數據存儲容量和對價格敏感的應用，eMMC 仍然是理想的存儲解決方案，並且在可預見的未來將繼續被低成本智能手機以及物聯網和其他非智能手機應用廣泛使用，例如智能電視、流媒體、加密狗、設置盒、智能揚聲器和主流 Chromebook。

Our eMMC controller opportunity has also grown significantly larger with NAND maker exiting from the eMMC market as their priority has been changed. We are becoming the primary supplier of eMMC controllers. There are no other meaningful merchant suppliers of eMMC controllers.

隨著 NAND 製造商退出 eMMC 市場，我們的 eMMC 控制器機會也顯著增加，因為他們的優先級已經改變。我們正在成為 eMMC 控制器的主要供應商。沒有其他有意義的 eMMC 控制器商家供應商。

Our strong order book is a result of solid end markets and growing demand of our controllers. Demand for our controller continue to exceed our ability to supply to our customers because of the very tight foundry industry capacity.

我們強勁的訂單是穩固的終端市場和我們控制器不斷增長的需求的結果。由於鑄造行業產能非常緊張，對我們控制器的需求繼續超過我們向客戶供應的能力。

We still do not have enough foundry capacity to manufacture all the products ordered by our customers. We have, however, secured additional foundry supply and as a result, are able to meet more of our customers' need and increase our full year revenue guidance.

我們仍然沒有足夠的鑄造能力來製造客戶訂購的所有產品。然而，我們已經獲得了額外的代工供應，因此能夠滿足更多客戶的需求並提高我們的全年收入指導。

We have also secured additional foundry supply that should enable us to deliver solid growth next year. But again, demand for our product will likely continue to exceed our ability to supply. We are thankful to TSMC and our customers for their support in securing additional foundry supply. And to our many customers with unfulfilled orders, we ask for their understanding on this matter. We continue to work on our securing incremental foundry supply without which the many ecosystems, such as PC and smartphone, that depend on our controller for storage solution could be negatively affected.

我們還獲得了額外的代工供應，這將使我們能夠在明年實現穩健增長。但同樣，對我們產品的需求可能會繼續超過我們的供應能力。我們感謝台積電和我們的客戶在確保額外代工供應方面的支持。對於我們許多未完成訂單的客戶，我們要求他們對此事的理解。我們將繼續致力於確保增量代工供應，否則依賴我們的控制器存儲解決方案的許多生態系統（例如 PC 和智能手機）可能會受到負面影響。

Last quarter, we announced our $1 billion sales target by 2023 in 3 years. With stronger sales growth this year and solid growth next year, it is likely we could reach our goal sooner than our original expectation.

上個季度，我們宣布了 3 年內到 2023 年達到 10 億美元的銷售目標。隨著今年更強勁的銷售增長和明年的穩健增長，我們可能會比我們最初的預期更快地實現我們的目標。

Let me conclude by providing an update of enterprise-grade PCIe Gen5 SSD controller. Acting -- engineering work continues, and we have been marketing our unique Gen5 architecture to hyperscalers in both the U.S. and China with very positive feedback. We expect to start sampling this SSD controller with customers in the second half of next year.

最後，我提供企業級 PCIe Gen5 SSD 控制器的更新。代理——工程工作仍在繼續，我們一直在向美國和中國的超大規模企業推銷我們獨特的 Gen5 架構，並獲得了非常積極的反饋。我們預計在明年下半年開始向客戶提供這款 SSD 控制器的樣品。

Now I will turn the call over to Riyadh to discuss our financial results and our outlook.

現在我將把電話轉給利雅得，討論我們的財務業績和前景。

Thank you, Wallace, and good morning, everyone. I will discuss additional details of our first quarter results and then provide our guidance. My comments today will focus primarily on our non-GAAP results unless otherwise specifically noted. A reconciliation of our GAAP to non-GAAP data is included with the earnings release issued yesterday.

謝謝你，華萊士，大家早上好。我將討論我們第一季度業績的更多細節，然後提供我們的指導。除非另有特別說明，我今天的評論將主要集中在我們的非公認會計原則結果上。昨天發布的收益報告中包含了我們的 GAAP 與非 GAAP 數據的對賬。

In the first quarter, revenue reached a record $182 million, 27% higher sequentially and 37% higher year-over-year. Earnings per ADS were $1.11, 29% higher sequentially and 38% higher year-over-year.

第一季度，收入達到創紀錄的 1.82 億美元，環比增長 27%，同比增長 37%。每份 ADS 收益為 1.11 美元，環比增長 29%，同比增長 38%。

Now I will walk through the performance of our 3 key products during the first quarter. SSD controller sales increased 25% to 30% sequentially and 45% to 50% year-over-year. Sequential strength of our first quarter SSD controller sales growth was primarily driven by our PCIe Gen3 OEM programs. Channel market sales also grew sequentially, but more modestly.

現在我將介紹我們的 3 個關鍵產品在第一季度的表現。 SSD 控制器銷售額環比增長 25% 至 30%，同比增長 45% 至 50%。我們第一季度 SSD 控制器銷售增長的連續優勢主要是由我們的 PCIe Gen3 OEM 計劃推動的。渠道市場銷售額也環比增長，但增長幅度較小。

eMMC+UFS controller sales also reached a record high, growing 30% to 35% sequentially and 50% to 55% year-over-year. Sequential strength of our eMMC+UFS controller sales growth was primarily driven by our UFS controllers. eMMC controller sales also grew sequentially, but more modestly. SSD solutions sales increased 0% to 5% sequentially and were down 40% to 45% year-over-year.

eMMC+UFS 控制器銷量也創下歷史新高，環比增長 30% 至 35%，同比增長 50% 至 55%。我們的 eMMC+UFS 控制器銷售增長的連續強度主要由我們的 UFS 控制器推動。 eMMC 控制器的銷售額也出現了環比增長，但增幅較為溫和。 SSD 解決方案銷售額環比增長 0% 至 5%，同比下降 40% 至 45%。

Gross margin in the first quarter increased from 49.3% in the prior quarter to 50.7%. Gross margin was higher than our guidance, primarily due to our focus on selling a better product mix for non-OEM programs.

第一季度的毛利率從上一季度的 49.3% 上升至 50.7%。毛利率高於我們的預期，主要是因為我們專注於為非 OEM 項目銷售更好的產品組合。

Operating expenses in the first quarter were point $43.9 million, $4.4 million higher than the prior quarter, primarily due to higher compensation accruals. Operating margin in the first quarter was 26.6%, an increase from the 21.9% we generated in last year's fourth quarter. Our effective tax rate in the first quarter was 20.9%, above our 15% to 20% tax rate guidance due to more sales from higher tax offering entities.

第一季度的運營費用為 4390 萬美元，比上一季度高出 440 萬美元，主要是由於應計薪酬增加。第一季度的營業利潤率為 26.6%，高於去年第四季度的 21.9%。我們第一季度的有效稅率為 20.9%，高於我們 15% 至 20% 的稅率指導，原因是來自更高稅收提供實體的更多銷售額。

Stock-based compensation and our operating expense, which we exclude from our non-GAAP results, was $3.0 million in the first quarter, slightly below our guidance of $3.1 million to $3.3 million. We had $371 million of cash, cash equivalents, restricted cash and short-term investments at the end of the first quarter compared to $369.2 million at the end of the fourth quarter last year. We paid $12.2 million in dividends to shareholders, the second quarterly installment of our $1.40 per ADS annual dividend that was announced last October.

我們從非公認會計原則結果中排除的基於股票的薪酬和運營費用在第一季度為 300 萬美元，略低於我們 310 萬美元至 330 萬美元的指導。截至第一季度末，我們擁有 3.71 億美元的現金、現金等價物、受限現金和短期投資，而去年第四季度末為 3.692 億美元。我們向股東支付了 1220 萬美元的股息，這是去年 10 月宣布的每 ADS 年度股息 1.40 美元的第二季度。

Now let me turn to our second quarter and full year guidance and forward-looking business trends. For the second quarter, we expect revenue to increase 5% to 10% sequentially to approximately $192 million to $201 million. We expect all 3 of our key products, SSD controllers, eMMC+UFS controllers and SSD solutions to all grow in the second quarter. As Wallace had discussed, our growth remains capped by foundry supply limitations.

現在讓我談談我們的第二季度和全年指導以及前瞻性的業務趨勢。對於第二季度，我們預計收入將環比增長 5% 至 10%，達到約 1.92 億美元至 2.01 億美元。我們預計我們的所有 3 個關鍵產品 SSD 控制器、eMMC+UFS 控制器和 SSD 解決方案都將在第二季度實現增長。正如華萊士所討論的，我們的增長仍然受到代工廠供應限制的限制。

Second quarter gross margin should be in the range of 48% to 50%. Second quarter operating margin should be in the range of 26% to 28%. In the second quarter, we expect stock-based compensation in the range of $2 million to $3 million.

第二季度毛利率應在 48% 至 50% 之間。第二季度營業利潤率應在 26% 至 28% 之間。在第二季度，我們預計基於股票的薪酬在 200 萬美元到 300 萬美元之間。

For full year 2021, we are now expecting the following: With additional foundry supply allocation, we now expect revenue to grow in the range of 45% to 55% to $782 million to $836 million. Our ability to meet customer demand, however, will remain capped by foundry supply availability.

對於 2021 年全年，我們現在預計如下：隨著額外的代工供應分配，我們現在預計收入將增長 45% 至 55% 至 7.82 億美元至 8.36 億美元。然而，我們滿足客戶需求的能力仍將受到代工供應可用性的限制。

Our full year gross margin expectations remains in the range of 47% to 49%. We expect gross margin in the second half of the year to be less favorable as our back-end and substrate costs have increased, while our prices to customers for OEM programs are bound by contractual terms.

我們的全年毛利率預期保持在 47% 至 49% 的範圍內。由於我們的後端和基板成本增加，我們預計下半年的毛利率將不那麼有利，而我們對客戶的 OEM 計劃價格受合同條款的約束。

Furthermore, our OEM programs are driving our growth, and despite foundry capacity limitations, scaling faster than expectations and subject to volume discounts. We believe our short-term investment in slightly lower gross margin will pay off in the years to come as we pull further ahead of both merchant and captive competitors and secure our position as the tech industry's primary supplier of NAND controllers.

此外，我們的 OEM 計劃正在推動我們的增長，儘管代工產能受到限制，但擴張速度快於預期並受到批量折扣的影響。我們相信，隨著我們進一步領先於商業和專屬競爭對手，並鞏固我們作為科技行業 NAND 控制器主要供應商的地位，我們對毛利率略低的短期投資將在未來幾年獲得回報。

Operating margin is expected to be in the range of 26% to 28%, up sharply from 21.8% last year and approaching our 30% target. For the full year, we expect stock-based compensation in the range of $16 million to $18 million, more than the prior year. We expect our effective tax rate for the year to be about 20%, similar to the first quarter.

營業利潤率預計將在 26% 至 28% 之間，較去年的 21.8% 大幅上升，接近我們 30% 的目標。全年，我們預計基於股票的薪酬在 1600 萬美元至 1800 萬美元之間，高於上一年。我們預計今年的有效稅率約為 20%，與第一季度相似。

On February 24, we broke ground on the construction of our Hsinchu office building. Construction is budgeted to cost $77 million, with $5 million spent this year and $33 million next year. We expect to complete construction in 2024. Upon construction -- upon completion, we plan on a sale and leaseback of the building.

2月24日，我們的新竹辦公樓動土動工。建設預算為7700萬美元，今年500萬美元，明年3300萬美元。我們預計在 2024 年完成建設。在建設完成後，我們計劃出售和回租該建築物。

Separately, on February 18, we won a bid with a third party to build an office building in Taipei, paid $1 million bid bond and expect to execute a property development agreement in the next few weeks at which time, we will pay a $5 million performance bond and other fees. We expect to spend approximately $75 million to $85 million and complete construction in about 6 years.

另外，在 2 月 18 日，我們與第三方中標在台北建造一座辦公樓，支付了 100 萬美元的投標保證金，預計將在未來幾週內執行一項房地產開發協議，屆時我們將支付 500 萬美元履約保證金和其他費用。我們預計將花費大約 7500 萬至 8500 萬美元，並在大約 6 年內完成建設。

This concludes our prepared remarks. We will now open the call to your questions.

我們準備好的評論到此結束。我們現在將打開您的問題的電話。

Annie, please go ahead and give instructions for the Q&A session.

安妮，請繼續為問答環節提供指導。

(Operator Instructions) Our first question is from the line of Anthony Stoss of Craig-Hallum.

（操作員說明）我們的第一個問題來自 Craig-Hallum 的 Anthony Stoss。

Congrats on just the unbelievable results for you guys. Couple of questions. Riyadh or Wallace, maybe if you could give us your sense right now of when do you think the wafer shortages really start to ease up? TSM and others are talking about in Q3, things will start to loosen up a little bit. So I'm curious what your view is on that?

恭喜你們取得了令人難以置信的結果。幾個問題。利雅得或華萊士，也許您現在可以告訴我們您認為晶圓短缺何時真正開始緩解？ TSM 和其他人都在談論 Q3，事情會開始有點鬆動。所以我很好奇你對此有何看法？

And then also, either 1 of you 2 guys, you're talking about bookings being sharply above your ability to get wafers. Can you quantify that? Is it 30% higher, 50% higher? Or maybe just if you wouldn't mind sharing kind of your view on where your bookings are for this year.

然後，你們兩個人中的任何一個，您都在談論預訂量大大超出了您獲得晶圓的能力。你能量化嗎？是高出 30%，還是高出 50%？或者，也許只是如果您不介意分享您對今年預訂情況的看法。

Yes. I believe TSMC said they expect current foundry shortage to continue throughout this year and maybe extend into 2022. As many of you know, foundry supply shortage is especially acute with the mature technology nodes, which significantly affect our ability to have a product fabricated. None of our products today are manufacturing using 5- or 7-nanometer. We do not know when the foundry supply will improve.

是的。我相信台積電錶示，他們預計目前的代工短缺將持續到今年，並可能延續到 2022 年。正如你們許多人所知，隨著技術節點的成熟，代工供應短缺尤其嚴重，這嚴重影響了我們製造產品的能力。我們今天的產品都不是使用 5 或 7 納米製造的。我們不知道代工供應何時會改善。

Tony, let me add to Wallace for your other question about our booking, what you think -- your question about how much our bookings could be in excess of our wafer supply. One way to put a framework around that is with -- if we do not have that constraint, we will be significantly on our way towards the $1 billion sales target that we have outlined -- that we had outlined last quarter. And we believe we'll be delivering faster than expected because of our stronger growth this year.

托尼，讓我補充華萊士關於我們預訂的另一個問題，你的想法 - 你的問題是我們的預訂可能超過我們的晶圓供應多少。圍繞這一點建立框架的一種方法是——如果我們沒有這種限制，我們將朝著我們概述的 10 億美元銷售目標邁進一大步——我們在上個季度概述了這一目標。我們相信，由於今年增長強勁，我們的交付速度將超過預期。

And then as a follow-up, your comments or Wallace's comments about solid growth for 2022. Do you think you could grow faster than the overall, let's say, PC market in 2022 over 2021 revenues?

然後作為後續行動，你的評論或華萊士關於 2022 年穩健增長的評論。你認為你的增長速度是否會超過整體，比如說，2022 年的個人電腦市場超過 2021 年的收入？

I think for the demand, yes. But from the wafer supply, we are not sure. But we already secured additional wafer to support our growth, but the demand is much bigger than the supply we can secure today.

我認為對於需求，是的。但從晶圓供應來看，我們不確定。但是我們已經獲得了額外的晶圓來支持我們的增長，但需求遠大於我們今天可以確保的供應。

Our next question is from the line of Craig A. Ellis of B. Riley Securities.

我們的下一個問題來自 B. Riley Securities 的 Craig A. Ellis。

Congratulations on the real robust execution, guys. Great to see the growth and the margin performance has come through in the first quarter. So the first question is just on the new $1 billion target, and it's really a clarification. So the clarification is this: Can you just identify what the prior and what the new embedded underlying PC growth is in the calendar '21 revenue target, which at a midpoint, I think is $809 million? And is there any benefit from some of the improved product mix and pricing that you're seeing in channel markets in the increase from initial to $809 million now?

祝賀真正強大的執行力，伙計們。很高興看到第一季度的增長和利潤率表現。所以第一個問題只是關於新的 10 億美元目標，這確實是一個澄清。所以澄清是這樣的：你能確定在日曆 '21 收入目標中的先前和新的嵌入式底層 PC 增長是什麼，我認為是 8.09 億美元的中點嗎？您在渠道市場上看到的一些改進的產品組合和定價是否從最初的增長到現在的 8.09 億美元有什麼好處？

Okay. Let me start with your first question. The $1 billion target, the underlying assumptions that we had baked in was our growth will be driven primarily from our SSD controllers and also from our eMMC+UFS controllers. The growth from these 2 products will get us to $1 billion. Additionally, we also expect our FerriSSDs to contribute, and we are not expecting our enterprise SSDs to be part of this. Our enterprise SSD, we're building as growth driver beyond the $1 billion.

好的。讓我從你的第一個問題開始。 10 億美元的目標，我們的基本假設是我們的增長將主要來自我們的 SSD 控制器以及我們的 eMMC+UFS 控制器。這兩種產品的增長將使我們達到 10 億美元。此外，我們還期望我們的 FerriSSD 做出貢獻，我們並不期望我們的企業級 SSD 成為其中的一部分。我們的企業級 SSD，我們正在打造超過 10 億美元的增長動力。

In terms of PC growth, we are obviously expecting modest PC growth this year, in line with expectations from third-party industry analysts. And within the PC profile, we are expecting notebooks to grow, while desktops to decline. And so that is a favorable tailwind to our overall business.

在 PC 增長方面，我們顯然預計今年 PC 將出現適度增長，這與第三方行業分析師的預期一致。在個人電腦方面，我們預計筆記本電腦將增長，而台式機將下降。因此，這對我們的整體業務是有利的。

But clearly, as Wallace had talked about, the key driver is not the PC growth or the transition from hard disk drives to SSD. But rather because of our investments that we had put in place over the last few years in winning design wins with our big customers for OEM programs, these are now going into production and scaling very nicely, leading to very solid market share gains.

但顯然，正如華萊士所說，關鍵驅動力不是個人電腦的增長或從硬盤驅動器向 SSD 的過渡。而是由於我們在過去幾年中為贏得 OEM 計劃的大客戶的設計勝利而進行的投資，這些現在正在投入生產並非常好地擴展，從而帶來非常穩固的市場份額增長。

Yes. Good to see those gains. And Riyadh, a follow-up just on the full year '21 guide implications for some things in the back half. So on revenue, just given your updates into increased supply and the share gain programs you have in Gen4, would you expect revenues to rise sequentially through the back half of the year? Or do you get supply early enough that we would see revenues peak in the third quarter?

是的。很高興看到這些收益。還有利雅得，只是對 21 年全年指南對後半部分某些事情的影響的後續行動。因此，在收入方面，僅考慮到您對增加供應的更新以及您在 Gen4 中擁有的份額增益計劃，您是否預計收入將在今年下半年連續增長？或者你是否足夠早地獲得供應，我們會看到第三季度的收入達到頂峰？

And then on the gross margin side, the full year gross margin guidance on average would imply 46.5% gross margin in the back half of the year. But as you've noted, gross margin is very mix dependent. And so what does the order book portend for the way gross margin can play out in the back half?

然後在毛利率方面，全年毛利率指引平均意味著下半年的毛利率為 46.5%。但正如您所指出的，毛利率非常依賴於組合。那麼訂單簿預示著毛利率在後半部分的表現如何？

Okay. For the first part of your question, our revenue, we are expecting very modest sequential revenue growth for the rest of the year, quarter-after-quarter, very modest growth. This is going to be in line with additional wafers made available to us. But clearly, our ability to grow is capped by wafer limitations from our foundry suppliers.

好的。對於你的問題的第一部分，我們的收入，我們預計今年剩餘時間的收入環比增長非常溫和，一個季度一個季度，增長非常溫和。這將與提供給我們的其他晶圓一致。但很明顯，我們的增長能力受到代工供應商晶圓限制的限制。

In terms of our gross margin, we are -- our gross margin profile is going to be less favorable in the second half of the year as our big OEM programs continue to scale. And as these OEM programs continue to scale, our gross margin will be affected.

就我們的毛利率而言，隨著我們的大型 OEM 項目繼續擴大規模，我們的毛利率將在下半年變得不那麼有利。而且隨著這些 OEM 計劃的不斷擴大，我們的毛利率將受到影響。

For a lot of our OEM programs, the pricing has already been predetermined on -- and baked in contractually, so our flexibility -- so our ability to change prices are fairly limited. And furthermore, there also volume incentive plans. And as these programs get larger and larger, they will impact our gross margin negatively in the second half of the year.

對於我們的許多 OEM 計劃，定價已經預先確定——並且是合同規定的，因此我們的靈活性——所以我們改變價格的能力相當有限。此外，還有數量激勵計劃。隨著這些項目的規模越來越大，它們將在下半年對我們的毛利率產生負面影響。

So let me comment. I think all wafer are available right now. We won't gain any additional wafer. That's why we make a full year guidance based on all the available wafer to us. Now execution about manufacturer back end, all the assembly, testing, everything, and we know exactly the yield, the price, all fixed. That's why I think the guidance, we'll fulfill the full year. It just depend on just the rest of our operational execution.

所以讓我評論一下。我想現在所有的晶圓都可以買到。我們不會獲得任何額外的晶圓。這就是為什麼我們根據所有可用的晶圓來製定全年指導。現在執行關於製造商後端，所有組裝，測試，一切，我們確切地知道產量，價格，所有這些都是固定的。這就是為什麼我認為指導，我們將完成全年。它僅取決於我們其餘的運營執行。

Okay. That's fair, guys. Would it be fair to think that your OEM customer mix would rise from the third to the fourth quarter and, therefore, we would see a sort of gross margin impact to the business sequentially?

好的。這很公平，伙計們。認為您的 OEM 客戶組合將從第三季度上升到第四季度是否公平，因此我們會看到對業務的毛利率影響順序？

That is correct.

那是正確的。

Next question is from the line of Rajvindra Gill of Needham Company.

下一個問題來自 Needham 公司的 Rajvindra Gill。

Congratulations as well on excellent results. Wallace, you talked about that your market share picture is improving fairly significantly, expecting to pick up 5 to 10 points of market share. I wanted to get a sense of -- maybe if you could elaborate a little bit further, on kind of what's driving that market share gains. How sustainable is it going into next year? And is that a major part of the underlying growth in SSDs and kind of your confidence of achieving that $1 billion target?

也祝賀你取得了優異的成績。華萊士，您談到您的市場份額正在顯著改善，預計將增加 5 到 10 個點的市場份額。我想了解一下——也許你可以進一步詳細說明，是什麼推動了市場份額的增長。明年的可持續性如何？這是 SSD 潛在增長的主要部分，以及您對實現 10 億美元目標的信心嗎？

Okay. It's a very good question. I think we have very high confidence to grow 5% to 10% market gain because through our current PC OEM program from NAND makers as well as module makers. And we are ramping very quickly with the available wafer to us.

好的。這是一個很好的問題。我認為我們對增長 5% 到 10% 的市場收益非常有信心，因為通過我們目前來自 NAND 製造商和模塊製造商的 PC OEM 計劃。我們正在迅速利用可用的晶片。

And due to, as we mentioned, our PCIe Gen4 controller design win, very widely and aligned with Intel Alder Lake next year. So we believe when PCIe Gen4 SSD adopted widely by PC OEM, we were about 50% of our OEM project. That's why we have very high confidence our -- we will have continued market gain for our clients to be continuing to next year and even beyond.

正如我們所提到的，由於我們的 PCIe Gen4 控制器設計贏得了廣泛的認可，並在明年與英特爾 Alder Lake 保持一致。所以我們相信，當 PC OEM 廣泛採用 PCIe Gen4 SSD 時，我們占我們 OEM 項目的 50% 左右。這就是為什麼我們對我們非常有信心——我們將為我們的客戶持續獲得市場收益，並持續到明年甚至更久。

And your commentary that based on the sales growth this year and what you see next year, that you could achieve the $1 billion target sooner rather than later. You talked about fiscal year '23 achieving the $1 billion target, and you're basically implying that could happen in 2022. I'm just trying to kind of reconcile that with your commentary about the supply constraints kind of continuing at TSMC for the remainder of the year and going into possibly 2022.

你的評論基於今年的銷售增長和你對明年的看法，你可以早日實現 10 億美元的目標。你談到了 23 財年實現 10 億美元的目標，你基本上是在暗示這可能在 2022 年發生。我只是想將這一點與你關於台積電在剩餘時間裡繼續存在的供應限制的評論相協調年度最佳，並可能進入 2022 年。

Is it that you have -- you're expecting to get additional wafer supply in 2022 that will kind of help you -- give you more confidence about achieving the $1 billion? Is it that the Gen4 programs are going to ramp and you have those purchase orders in hand that's giving you some of the confidence that you could get that -- to get to that number sooner? I'm just curious that you feel that you could get to that number sooner, however, the capacity constraints are still fairly significant.

是不是你有——你期望在 2022 年獲得額外的晶圓供應，這會對你有所幫助——讓你對實現 10 億美元更有信心？是因為 Gen4 計劃將會增加，並且您手頭有這些採購訂單，這讓您有信心獲得它——更快地達到這個數字嗎？我只是好奇你覺得你可以更快地達到這個數字，但是，容量限制仍然相當大。

So maybe we can make it very clear to you guys. Our backlog that's building today is over $1 billion. If we have sufficient supply, this year, we can achieve over $1 billion sales target. However, we are not able to due to wafer supply shortage. Now we secure additional wafer supply, which is supported to continue growth for next year. It's too early to comment 2022 guidance, but we believe we'll continue growth for 2022. And if we can continue negotiate with TSMC to support major critical program, because if we cannot get a sufficient supply, that will impact the ecosystem negatively. So this is very important for us and also for our customer and for the whole industry.

所以也許我們可以讓你們非常清楚。我們今天積壓的訂單超過 10 億美元。如果我們有足夠的供應，今年我們可以實現超過 10 億美元的銷售目標。但是，由於晶圓供應短缺，我們無法做到。現在我們確保了額外的晶圓供應，這將支持明年繼續增長。現在評論 2022 年的指導還為時過早，但我們相信我們將在 2022 年繼續增長。如果我們能夠繼續與台積電談判以支持主要的關鍵項目，因為如果我們無法獲得足夠的供應，那將對生態系統產生負面影響。因此，這對我們、對我們的客戶和整個行業都非常重要。

So we believe we current secure additional wafer will support our growth for 2022, but we cannot comment what the eventually sale revenue will be. But we believe we'll be probably early than 2023 is likely.

因此，我們相信我們目前獲得的額外晶圓將支持我們 2022 年的增長，但我們無法評論最終的銷售收入將是多少。但我們相信我們可能會早於 2023 年。

That's very helpful. And just my follow-up, I'm going to -- I'll step back in the queue. Riyadh, the gross margin is kind of dipping to 46.5% range in the second half. You talked about that the pricing is committed or predetermined. And at the same time, there's back end and substrate costs that are increasing. That clearly is transitory.

這很有幫助。只是我的後續行動，我要-- 我會退到隊列中。利雅得，毛利率在下半年下降到 46.5% 的範圍。您談到定價是承諾或預定的。同時，後端和基板成本也在增加。這顯然是暫時的。

But I'm curious in terms of when do you expect the back end of the substrate cost starting to subside? Is that still is going to be dependent on the capacity constrained environment? And how do you think about that, balancing that with, say, the pricing commitments going into 2022, kind of looking past the second half? How are you balancing the kind of the pricing dynamic with the back end and substrate costs that have been increasing?

但我很好奇您預計基板成本的後端何時開始下降？這是否仍將取決於容量受限的環境？你如何看待這一點，平衡它與進入 2022 年的定價承諾，有點看過去下半年？您如何平衡這種定價動態與不斷增加的後端和基板成本？

That's a very good question, Raji. We're -- this is also tied in with, when do we think foundry supply will ease up. So related to this topic is when do we expect substrate and back-end tightness to also ease up. Frankly, it's not that clear right now. We are seeing improvements on the back end and substrates. But when will this lead to a better cost structure in terms of pricing of back end and substrates to us, we're still not quite sure. We are keeping a very close eye on this and continue to see if we can negotiate better terms. And this is something we'll be updating everyone in the following quarters.

這是一個很好的問題，拉吉。我們 - 這也與我們認為代工供應何時會緩解有關。因此，與該主題相關的是，我們預計基板和後端的密封性何時也會緩解。坦率地說，現在還不是很清楚。我們看到後端和基板的改進。但是，就後端和基板的定價而言，這何時會為我們帶來更好的成本結構，我們仍然不太確定。我們正在密切關注這一點，並繼續看看我們是否可以協商更好的條款。這是我們將在接下來的幾個季度中更新每個人的內容。

Next question is from the line of Karl Ackerman of Cowen.

下一個問題來自 Cowen 的 Karl Ackerman。

Two questions, please. I guess, Riyadh, how sustainable are these OEM programs? You've indicated contractual agreements with NAND OEMs, but I'm curious if you could discuss the volume commitments you have with the OEMs that extend into the second half and into 2022 in the event capacity constraints ease. And how that may increase the risk that those OEMs move back toward internal controller solutions?

請教兩個問題。我想，利雅得，這些 OEM 計劃的可持續性如何？您已經表示與 NAND OEM 簽訂了合同協議，但我很好奇您是否可以討論在產能限制緩解的情況下您與 OEM 的批量承諾，這些承諾將延長到下半年和 2022 年。這會如何增加這些 OEM 轉向內部控制器解決方案的風險？

Karl, I'll let Wallace answer this question.

卡爾，我會讓華萊士回答這個問題。

Yes. I think these OEM programs are not easy to be replaced by either third-party controller or internal controller. Because it's need to predesign and have to be -- put a lot of effort in the design qualification and through their [end] customer verification.

是的。我認為這些OEM程序不容易被第三方控制器或內部控制器替換。因為它需要預先設計並且必須——在設計資格和通過他們的[最終]客戶驗證方面付出很多努力。

And I think we already have a full year forecast from 2022. So we know exactly what is going to last. And this is not just a solution. This is a industrial standard and will continue -- going to stay for more than 3 or 4 years, in the next 3 to 4 years.

而且我認為我們已經有了從 2022 年開始的全年預測。所以我們確切地知道會發生什麼。這不僅僅是一個解決方案。這是一個行業標準，將繼續下去——在未來 3 到 4 年內將保持 3 到 4 年以上。

So I think the -- we have a -- I think we have a contract price, and it's been discussed 2 years ago. Nobody can predict the COVID-19 and the wafer shortage and all these manufacture-centered related issue.

所以我認為 - 我們有一個 - 我認為我們有一個合同價格，並且在 2 年前就已經討論過了。沒有人可以預測 COVID-19 和晶圓短缺以及所有這些以製造為中心的相關問題。

But so we -- I think we respect the commitment regarding our customers. We have been working together for a long time, and we committed for further agreement and contract. So we think this program is going to empower overall gross margin. However, this is going to drive to further growth and for net profit to the company.

但是我們——我認為我們尊重對客戶的承諾。我們已經合作了很長時間，我們承諾進一步的協議和合同。因此，我們認為該計劃將提高整體毛利率。然而，這將推動公司的進一步增長和淨利潤。

So I think it's a very important project and it's going to be a very unique, outstanding high-growth project for the industry. So it's -- we really try to follow our previous contract and agreement and moving forward.

所以我認為這是一個非常重要的項目，它將是一個非常獨特、傑出的行業高增長項目。所以它 - 我們真的試圖遵循我們之前的合同和協議並繼續前進。

Karl, let me also add a little bit more to what Wallace said. As Wallace as mentioned, these programs took a lot of effort, a long time to put into execution. Our Gen3 projects, our PCIe Gen3 projects, we've been working on these for over 2 years, and they're now finally going to production and beginning to scale.

卡爾，讓我再補充一點華萊士所說的話。正如華萊士所提到的，這些計劃花費了很多精力，很長時間才能付諸實施。我們的 Gen3 項目，我們的 PCIe Gen3 項目，我們已經在這些項目上工作了 2 年多，現在它們終於投入生產並開始擴大規模。

But as a result of the work that we've been doing with our customers for these OEM programs, we're building a lot of traction, a lot of stickiness. And this is now leading to the Gen4 programs that we have. And so this gives you a sense of what we're working on, solidifying our position as a leading supplier of controllers to the tech industry.

但由於我們與客戶一起為這些 OEM 計劃開展的工作，我們正在建立很多牽引力和粘性。現在這導致了我們擁有的 Gen4 計劃。因此，這讓您了解我們的工作，鞏固我們作為科技行業控制器領先供應商的地位。

Yes. No, that's very helpful. For my follow-up, how would you characterize the level of channel inventory of controllers today? I ask because I think there have been perhaps some news flow that module makers have been stockpiling PCIe controllers in -- as an afterthought or as a, I guess, perhaps a view that cloud SSD demand remains strong given this recent uptick in cryptocurrency demand. So any thoughts there in terms of the level of channel inventory of controllers today and your ability to service that demand?

是的。不，這很有幫助。對於我的後續行動，您如何描述當今控制器的渠道庫存水平？我之所以這麼問，是因為我認為模塊製造商可能已經在儲備 PCIe 控制器的消息流——作為事後的想法，或者我猜想，鑑於最近加密貨幣需求的上升，雲 SSD 需求仍然強勁的觀點。那麼，就當今控制器的渠道庫存水平以及您滿足該需求的能力而言，您有什麼想法嗎？

So let me comment. This is a good question. I believe that current channel controller inventory is very, very low, probably almost near 0 because everybody is in shortage today. So the NAND component, NAND supply is not in shortage. So no customer will try to buy additional net inventory or solution put into inventory.

所以讓我評論一下。這是一個很好的問題。我相信當前的渠道控制器庫存非常非常低，可能幾乎接近 0，因為今天每個人都缺貨。所以在NAND元件方面，NAND供應並不短缺。因此，沒有客戶會嘗試購買額外的淨庫存或放入庫存的解決方案。

I think every product -- every wafer, every component we make is shipped directly to the end customer. The -- and our agent, our distributor even cannot even keep it in their stock. So we see the inventory is very, very low. Demand depend on product. Some products really high demand, some just moderate. But in average, I believe there's almost no inventory or inventory very, very low for controller in the channel.

我認為每一個產品——每一個晶圓，我們製造的每一個組件都直接運送給最終客戶。 - 以及我們的代理商，我們的分銷商甚至無法將其保存在他們的庫存中。所以我們看到庫存非常非常低。需求取決於產品。有些產品的需求真的很高，有些只是適中。但平均而言，我相信渠道中的控制器幾乎沒有庫存或庫存非常非常低。

Next question is from the line of Donnie Teng of Nomura.

下一個問題來自野村的Donnie Teng。

And congrats on the good results. The first question is also related to gross margin. So for 2022, do you think there is a chance that we can renegotiate the price with the OEM customers in terms of the -- to revise up the price, as you have said that the foundry supply could be pretty tight all the way into 2022? And also, could you kind of clarify the so-called OEM project includes both SSD controller as well as UFS controller or mainly SSD controller?

並祝賀取得好成績。第一個問題也與毛利率有關。因此，對於 2022 年，您認為我們是否有機會與 OEM 客戶重新協商價格，以修改價格，正如您所說，到 2022 年代工供應可能一直很緊張?另外，您能否澄清一下所謂的 OEM 項目既包括 SSD 控制器，也包括 UFS 控制器或主要是 SSD 控制器？

I think that everything is negotiable, but if for a very large program with a contract, it's difficult, it's challenging. Because especially, I think for some additional wafer, also helped by our major OEM customer to negotiate together. We respect the contract, we engage with the customer.

我認為一切都是可以商量的，但如果對於一個非常大的有合同的項目來說，這很困難，很有挑戰性。因為特別是，我認為對於一些額外的晶圓，我們的主要 OEM 客戶也幫助我們一起談判。我們尊重合同，我們與客戶互動。

But I think to 2022, we will definitely try the best for the company. And we'll also going to see what the price trend for the wafer. If wafer price increase dramatically, we have to negotiate the price with the customer. By the way, this OEM program is involved for both PCIe as well as UFS.

但我認為到2022年，我們一定會為公司盡最大努力。我們還將看到晶圓的價格趨勢。如果晶圓價格大幅上漲，我們必須與客戶協商價格。順便說一下，這個 OEM 程序涉及 PCIe 和 UFS。

Donnie, let me also add, there are 2 other variables that we also look at. The first is, we're constantly winning new designs, right? So new design, new contracts, new OEM programs. And so with new OEM programs, the terms could be more favorable, more reflective of current circumstances, right?

唐尼，我還要補充一點，我們還研究了另外 2 個變量。首先是，我們不斷贏得新設計，對吧？所以新的設計、新的合同、新的 OEM 計劃。因此，對於新的 OEM 計劃，條款可能更有利，更能反映當前情況，對嗎？

And the other factor is, while back end, substrates, very tight right now, the industry is always cyclical. Our semiconductor industry is always cyclical. And so sometime down the road, there will be more supply, more back end, more substrates and prices will change. And our gross margin circumstances will also become more favorable. So these are 2 other factors to keep in mind.

另一個因素是，雖然後端基板目前非常緊張，但該行業始終是周期性的。我們的半導體行業總是周期性的。因此，在未來的某個時候，將會有更多的供應、更多的後端、更多的基材和價格會發生變化。我們的毛利率情況也將變得更加有利。所以這些是另外兩個要記住的因素。

Yes. Just -- thank you, Riyadh. I think it's very helpful. Just a follow-up. When you mentioned about back-end capacity as well as substrate supply, if we compare with the foundry capacity constraint, when do you think -- I mean, which one would you think that the supply tightness will be easing first?

是的。只是 - 謝謝你，利雅得。我認為這很有幫助。只是一個後續。當您提到後端產能以及基板供應時，如果我們與代工產能限制進行比較，您認為什麼時候--我的意思是，您認為哪一個會首先緩解供應緊張？

And also, I think Samsung's Austin fab previously suffered from the difficult weather. So I think they have resumed some production in terms of controllers as well. Have you seen any kind of supply-demand change after they resume their production?

而且，我認為三星的奧斯汀工廠此前曾遭受惡劣天氣的影響。所以我認為他們在控制器方面也恢復了一些生產。你看到他們恢復生產後的任何形式的供需變化嗎？

My personal opinion, the back end, the substrate supply and the assembly capacity, that will be relieved earlier than the wafer supply. I think when we talk about wafer shortage, we need to separate advanced technology node and mature technology node. Currently, I believe, 90% of (inaudible) company are in mature technology node, and these technology wafer is very hard to increase capacity. Because doesn't matter for TSMC, GlobalFoundries, Samsung, UMC, SMIC, they want to invest any material technology node. It takes a minimum 2 years to get in land, to build a clean room fab and to get new equipment to install, to fine-tune. It will take time. So it won't result -- it won't increase capacity within just 1 to 2 years.

我個人認為，後端、基板供應和組裝能力，會比晶圓供應更早得到緩解。我認為當我們談論晶圓短缺時，我們需要將先進技術節點和成熟技術節點分開。目前，我相信，90%（聽不清）的公司都處於成熟的技術節點，這些技術晶圓很難增加產能。因為台積電、格羅方德、三星、聯電、中芯國際都無所謂，他們想投資任何材料技術節點。至少需要 2 年時間才能獲得土地、建造潔淨室晶圓廠並安裝新設備並進行微調。需要花時間。所以它不會產生結果——它不會在 1 到 2 年內增加容量。

So this -- the tight wafer supply situation will continue, but it also depends if the relief related to overbooking or related to other factors, and maybe that can resolve certain of the tight supply. However, we -- I think, according to TSMC, they don't see there will be a solution this year. And probably the tight capacity will extend to 2022.

所以這個 - 晶圓供應緊張的情況將繼續存在，但這也取決於緩解是否與超額預訂或其他因素有關，也許這可以解決某些供應緊張的問題。但是，我們 - 我認為，根據台積電的說法，他們認為今年不會有解決方案。產能緊張的情況可能會延續到 2022 年。

That's very helpful. And the last question is regarding to the operating margin. So it looks like the gross margin, of course, in the second half, there could be some pressure. But for operating margin, it looks like pretty strong. So Riyadh, just wondering, besides the operating efficiency, are there any other reasons behind the improving operating margin?

這很有幫助。最後一個問題是關於營業利潤率。所以看起來毛利率，當然，在下半年，可能會有一些壓力。但就營業利潤率而言，它看起來相當強勁。所以利雅得只是想知道，除了運營效率，運營利潤率提高的背後還有其他原因嗎？

Donnie, it's a big trade-off that we have, right? With these OEM programs, they're very large. And when they ramp, the trade-off is, we have these volume incentive programs that result in slightly lower gross margin, but the offset is we're getting very significant operating leverage so helps our bottom line significantly.

唐尼，這是一個很大的權衡，對吧？對於這些 OEM 程序，它們非常龐大。當它們上升時，權衡是，我們有這些數量激勵計劃導致毛利率略低，但抵消的是我們獲得了非常重要的運營槓桿，因此顯著幫助我們的底線。

Next question is from the line of [Harlo Zayn] of SIG.

下一個問題來自 SIG 的 [Harlo Zayn]。

Yes, this is actually Mehdi Hosseini. I have a couple of follow-ups. And by the way, congrats for gaining market share. Wallace, how are you seeing new cryptocurrency technologies, specifically Chia. There has been a lot of headlines over the past month as to how the new cryptocurrency is going to consume low-end SSDS. And it appears that maybe some of the channel inventory of a low-end SSDs have been completely depleted. And I'm just wondering if you have any thoughts you can share with us? And I have a follow-up.

是的，這實際上是 Mehdi Hosseini。我有幾個跟進。順便說一句，恭喜您獲得了市場份額。華萊士，你如何看待新的加密貨幣技術，特別是 Chia。在過去的一個月裡，有很多關於新加密貨幣將如何消耗低端 SSDS 的頭條新聞。並且看起來，可能某個低端 SSD 的部分渠道庫存已經完全耗盡。我只是想知道您是否有任何想法可以與我們分享？我有一個後續行動。

Yes, I think the new crypto technology and the Chia, the preferred really is for capacity drive. And really, it's really easier for HDD, our high-density enterprise SSD, not client SSD. So this is really not related to our business. We didn't pay really actual attention. I think even our channel, we'll focus on the real customer to grow our business and technology. But we just know this relates to the high-density HDD -- enterprise SSD.

是的，我認為新的加密技術和 Chia，確實是容量驅動的首選。實際上，對於 HDD（我們的高密度企業級 SSD）來說，它真的更容易，而不是客戶端 SSD。所以這真的與我們的業務無關。我們並沒有真正關注。我認為即使是我們的渠道，我們也會專注於真正的客戶來發展我們的業務和技術。但我們只知道這與高密度硬盤——企業級固態硬盤有關。

Mehdi, apologies, I appreciate if you could repeat your second question.

Mehdi，抱歉，如果您能重複第二個問題，我將不勝感激。

Yes. I was going to get into it. Actually, two-part second question. One for Wallace. You have historically had pretty good assessment of NAND supply and demand. You just told us that there is absolutely no channel inventory of controllers. Does that apply to NAND, especially looking into the second half? And the second part of the second question is for Riyadh. Would it be fair to assume that perhaps OpEx are going to be in the range of $40 million to $42 million on a quarterly basis for a foreseeable future?

是的。我打算進入它。實際上，兩部分的第二個問題。一個給華萊士。從歷史上看，您對 NAND 的供需情況進行了很好的評估。您剛剛告訴我們，控制器絕對沒有渠道庫存。這是否適用於 NAND，尤其是下半年？第二個問題的第二部分是針對利雅得的。假設在可預見的未來，每季度的運營支出可能會在 4000 萬美元到 4200 萬美元之間，這是否公平？

I think let me comment regarding the channel for controller in the NAND. As I said, we believe there is no inventory for controller because every controller we have in hand, it will be sold out. We have a huge backlog in hand, and we cannot fulfill the order.

我想讓我評論一下 NAND 中控制器的通道。正如我所說，我們相信控制器沒有庫存，因為我們手中的每個控制器都會售罄。我們手頭有大量積壓，我們無法完成訂單。

And regarding the NAND, NAND maker also observe there's a severe controller shortage. So NAND maker move their storage product to higher density product, that going to consume more NAND.

而對於 NAND，NAND 製造商也觀察到存在嚴重的控制器短缺。所以 NAND 製造商將他們的存儲產品轉移到更高密度的產品上，這將消耗更多的 NAND。

As you can see from PC OEM before, the lower density, 128 gigabyte SSD, not anymore. So value line start from 256 gigabyte. So that is the way how you see NAND maker, they manage to move all the product to higher density, and that can consume the NAND quickly.

正如您之前從 PC OEM 看到的那樣，密度較低的 128 GB SSD 已不再存在。所以價值線從 256 GB 開始。這就是你看待 NAND 製造商的方式，他們設法將所有產品轉移到更高的密度，這可以快速消耗 NAND。

That's why we don't see that many even NAND inventory in the market. From Q2, we start to see NAND price going up. And I think the price will continue gradually going up, but within single digit. So we really don't see the high inventory, either controller or storage solution in the channel.

這就是為什麼我們在市場上看不到那麼多 NAND 庫存。從第二季度開始，我們開始看到 NAND 價格上漲。而且我認為價格會繼續逐漸上漲，但在個位數以內。所以我們真的看不到渠道中的高庫存，無論是控制器還是存儲解決方案。

Mehdi, to your other question about our OpEx in the second half of the year. We are expecting our OpEx to be fairly stable sequentially in the following quarters. We are expecting our top line to inch up a little bit quarter after quarter. We're expecting our gross margins to drift down a little bit. But we are expecting our operating margins to be fairly stable. So this is going to be coming from fairly stable -- allowing fairly stable operating expense in each one of the quarters in second half.

Mehdi，關於下半年我們的運營支出的其他問題。我們預計我們的運營支出在接下來的幾個季度將保持相當穩定。我們預計我們的收入將逐季小幅增長。我們預計我們的毛利率會略有下降。但我們預計我們的營業利潤率將相當穩定。因此，這將來自相當穩定的 - 允許下半年每個季度的運營費用相當穩定。

We have Suji Desilva of ROTH Capital for the next question.

下一個問題請來自 ROTH Capital 的 Suji Desilva。

Congratulations on the results here. As you approach that $1 billion revenue, can you give us a sense of what kind of mix of SSD and smartphone eMMC+UFS controller we should expect roughly?

祝賀這裡的結果。當您接近 10 億美元的收入時，您能否讓我們大致了解一下 SSD 和智能手機 eMMC+UFS 控制器的哪種組合？

We cannot really tell the detail of percentage. We just -- both the client SSD and eMMC+UFS are very strong. And we also see our Ferri product going strong in the second half this year.

我們無法真正說出百分比的細節。我們只是——客戶端 SSD 和 eMMC+UFS 都非常強大。我們還看到我們的 Ferri 產品在今年下半年表現強勁。

Okay. That's helpful. And then for UFS, can you talk about the number of NAND customers that are now ramping? Is it still maybe 2 major ones? Or is it more at this point? And how many do you expect 6, 12 months out?

好的。這很有幫助。然後對於 UFS，你能談談現在正在增加的 NAND 客戶的數量嗎？它仍然可能是2個主要的嗎？還是在這一點上更多？你預計有多少 6、12 個月？

So for this year, the momentum is really driven by one major U.S. NAND maker. But we're going to have 5 more customer to grow UFS product in 2022.

因此，今年的勢頭確實是由一家主要的美國 NAND 製造商推動的。但到 2022 年，我們將再增加 5 個客戶來發展 UFS 產品。

So all 5 of those will be starting, Wallace, in 2022? Or some come on this year?

華萊士，所有這 5 個都將在 2022 年開始？還是今年來的？

For the year, will be very small, very light looking. But all 5 will grow really 2022.

對於這一年，將非常小，看起來很輕。但到 2022 年，所有 5 個都將真正增長。

And we have Matt Bryson from Wedbush for the next question.

我們請來自 Wedbush 的 Matt Bryson 來回答下一個問題。

As I think Wallace talked to shipping to the 6 of the 7 NAND fabs. Can you remind us where that was a year ago? Also, can you characterize which markets you're getting more traction with your Gen3, Gen4 solutions? Is it primarily product ending up in retail? Is it low-end OEM? Is it across the gamut? And I have one follow-up.

我認為華萊士談到了向 7 家 NAND 晶圓廠中的 6 家發貨。你能提醒我們一年前那是在哪裡嗎？此外，您能否描述一下您的 Gen3、Gen4 解決方案在哪些市場上獲得了更大的吸引力？它主要是零售產品嗎？是低端代工嗎？是否涵蓋了所有領域？我有一個後續行動。

As we said before, for module maker, we already have around 70% market share. But last year, I think our OEM program were just above -- below 30%. So we start to grow PC OEM program from this year. And the major driver for this year is the PCIe Gen3 controller. So we see the very strong demand from PC OEM as well as customer gain market share and we gain market share. And we see they going carry the momentum through from Gen3 to Gen4 next year because we have roughly around 50% design win socket from our PC OEM Gen4 program to 2022 aligned with the Intel Alder Lake platform.

正如我們之前所說，對於模塊製造商，我們已經擁有大約 70% 的市場份額。但去年，我認為我們的 OEM 計劃略高於 - 低於 30%。因此，我們從今年開始發展 PC OEM 計劃。今年的主要驅動力是 PCIe Gen3 控制器。因此，我們看到來自 PC OEM 的非常強勁的需求以及客戶獲得了市場份額，我們也獲得了市場份額。我們看到他們明年將把勢頭從第三代延續到第四代，因為從我們的 PC OEM Gen4 計劃到 2022 年，我們大約有 50% 的設計獲勝插座與英特爾 Alder Lake 平台保持一致。

So we see the momentum will continue, and we will continue to gain market share. Our PC OEM percentage also will gain through -- from '21 to carry to 2022.

所以我們看到這種勢頭將繼續下去，我們將繼續獲得市場份額。從 21 年到 2022 年，我們的 PC OEM 百分比也將增加。

Matt, the line was a bit choppy. Appreciate if you could repeat your first question again.

馬特，線路有點波濤洶湧。感謝您是否可以再次重複您的第一個問題。

I think, Riyadh, that Wallace got most of what I was asking for. Sounds like it's predominantly PC OEMs. But my follow-up is, is there any color you can give us around how much the newest NAND makers growth is contributing to your strong results and better outlook moving -- or strong outlook moving forward?

我認為，利雅得，華萊士得到了我想要的大部分。聽起來它主要是PC OEM。但我的後續行動是，你能告訴我們最新的 NAND 製造商的增長對你的強勁業績和更好的前景有多大貢獻 - 或向前發展的強勁前景？

The new NAND makers OEM program will contribute from 2022.

新的 NAND 製造商 OEM 計劃將從 2022 年開始做出貢獻。

The next question is from the line of Craig A. Ellis of B. Riley Securities.

下一個問題來自 B. Riley Securities 的 Craig A. Ellis。

Guys, I wanted to go back to the eMMC market. And it's typically not a focus, but there were 2 notable things in the commentary. I wanted to follow-up on one. There is an instance where it appears one OEM, due to some of the recent dynamics that we're seeing in the marketplace and with their manufacturing, may be moving away from doing eMMC internally. And you mentioned that you're the only merchant eMMC supplier.

伙計們，我想回到 eMMC 市場。它通常不是焦點，但評論中有兩件值得注意的事情。我想跟進一個。有一個例子，由於我們在市場上看到的一些近期動態以及他們的製造，一家 OEM 可能正在放棄在內部進行 eMMC。您提到您是唯一的商家 eMMC 供應商。

So the twofold question is this, one, is it possible that the decision around eMMC could be the tip of the iceberg for more controller work, which would actually go merchant, not just eMMC, but SSD controllers? And two, given industry structure with merchant eMMC now, how would you characterize the pricing dynamics? Is it more possible to price for functional value and the value you create, given the industry landscape?

所以有兩個問題，第一，圍繞 eMMC 的決定是否可能是更多控制器工作的冰山一角，這實際上會成為商業化的，不僅僅是 eMMC，而是 SSD 控制器？第二，鑑於現在商家 eMMC 的行業結構，您如何描述定價動態？考慮到行業格局，是否更有可能為功能價值和您創造的價值定價？

Okay. Let me try to answer your 3 questions. First, regarding eMMC, it's a very good question. I'd like to answer it. I think the market trend favors SIMO in the next few years. Firstly, it's because the market really demand more low-density storage solution. eMMC is the best solution which you can feed in lower density. Lower density mean is 120 gigabyte or lower or smaller is low density and price sensitive. So eMMC is adopted by not just a low-end smartphone but also from set-top box, from smart TV, smartwatch, smart speaker, IoT and Chromebook and many, many, even cable box, many, many electronic devices. This has become the standard because -- JEDEC standard, that's why it's widely accepted by many, many consumer electronic makers.

好的。讓我試著回答你的3個問題。首先，關於 eMMC，這是一個非常好的問題。我想回答它。我認為未來幾年市場趨勢有利於 SIMO。首先，因為市場確實需要更多的低密度存儲解決方案。 eMMC 是您可以餵入較低密度的最佳解決方案。低密度平均值為 120 GB 或更低或更小是低密度和價格敏感的。因此，eMMC不僅被低端智能手機採用，也被機頂盒、智能電視、智能手錶、智能音箱、物聯網和Chromebook以及很多很多甚至有線電視盒、很多很多電子設備所採用。這已成為標準，因為——JEDEC 標準，這就是為什麼它被許多、許多消費電子製造商廣泛接受的原因。

But because of controller shortage, wafer shortage become controller shortage, NAND maker tried to utilize their variable controller to make a higher-density solution. That's why NAND maker moving away from eMMC controller. They moved to UFS or higher-density SSD or enterprise SSD or other storage solution. This gave us tremendous opportunity. That's why we see as a huge demand will come to our company, but we cannot even fulfill 50% of the demand because demand is large.

但由於控制器短缺，晶圓短缺變成控制器短缺，NAND製造商試圖利用他們的可變控制器來製作更高密度的解決方案。這就是 NAND 製造商遠離 eMMC 控制器的原因。他們轉向 UFS 或更高密度的 SSD 或企業 SSD 或其他存儲解決方案。這給了我們巨大的機會。這就是為什麼我們認為我們公司會有巨大的需求，但我們甚至無法滿足 50% 的需求，因為需求很大。

And even there are more NAND maker come to us to place PO, but we have to apologize because we don't have wafer to support the trend. So this is a really market trend. You see NAND maker, even they try outsourcing for the third party, and we are the only one merchant company have the capability and scale and technology to support them. So this is really favor for Silicon Motion.

甚至還有更多的 NAND 製造商來找我們放置 PO，但我們不得不道歉，因為我們沒有晶圓來支持這一趨勢。所以這是一個真正的市場趨勢。你看NAND製造商，即使他們嘗試外包給第三方，我們是唯一一家有能力、規模和技術支持他們的商業公司。所以這對Silicon Motion來說真的很受歡迎。

Second is, we also see for mainstream client SSD, this trend will happen and will continue to happen. Because NAND maker finally realize the -- they don't have to develop the client SSD controller for mainstream or value line. They will focus on high-end client SSD or enterprise SSD. That have added more value to their own benefit. Because our turnkey solution is more cost effective and time to market and serve with our customer with a very integrated technology, good solution. This is much better than the internal development.

其次，我們也看到，對於主流客戶端SSD，這種趨勢將會發生並將繼續發生。因為 NAND 製造商終於意識到——他們不必為主流或價值線開發客戶端 SSD 控制器。他們將專注於高端客戶端 SSD 或企業 SSD。這為他們自己的利益增加了更多價值。因為我們的交鑰匙解決方案更具成本效益和時間，以非常集成的技術和良好的解決方案與我們的客戶一起服務於我們的客戶。這比內部開發要好得多。

So for controller or wafer shortage, the market trend and moving to the direction. That's why we gain almost majority of the NAND makers' business for client SSD. That's why we see our PCIe Gen4 design win is going to occupy minimum, almost half of PCIe Gen4 SSD in next year, ramping 2022.

因此對於控制器或晶圓短缺，市場趨勢和方向。這就是為什麼我們在客戶端 SSD 上獲得了 NAND 製造商幾乎大部分的業務。這就是為什麼我們看到我們的 PCIe Gen4 設計獲勝將在明年佔據 PCIe Gen4 SSD 的最低比例，幾乎是一半，到 2022 年將增長。

Regarding the third question is related to the price. I think the -- when wafer's in shortage, the price will become more stable, and it was favoring in our controller side. So we were, based on the product, to do certain adjustments. If certain product in the past is below our corporate average, we'll do a little adjustment. But if this contract base for major OEM, we will respect for the contract.

關於第三個問題與價格有關。我認為 - 當晶圓短缺時，價格會變得更加穩定，並且在我們的控制器方面受到青睞。所以我們要根據產品做一些調整。如果過去某些產品低於我們公司的平均水平，我們會做一些調整。但如果此合同為主要OEM，我們將尊重合同。

So I think the price will become more stable as long as our foundry supplier and our back-end service provider, the price -- their adjustment is reasonable, we will not changing the price dramatically. We will really try to monitor the market trend carefully, make sure we can keep a very stable gross margin to our product mix.

所以我認為只要我們的代工供應商和我們的後端服務提供商的價格——他們的調整是合理的，我們不會大幅改變價格，價格會變得更加穩定。我們將真正嘗試仔細監控市場趨勢，確保我們能夠對我們的產品組合保持非常穩定的毛利率。

And furthermore, as Wallace talked about, more and more new businesses coming in our door. To the extent that we can take on new projects, the terms of new projects will be reset at today's conditions. So the margins are -- for new projects will be more favorable than projects that we took on, say, 2 years ago and facing higher costs today.

此外，正如華萊士所說，越來越多的新企業走進我們的大門。在我們可以承接新項目的範圍內，新項目的條款將在今天的條件下重新設置。因此，利潤率是 - 對於新項目而言，將比我們在 2 年前承接且今天面臨更高成本的項目更有利。

And as there are no further questions on queue, I'd like to hand the conference back to our President and CEO, Mr. Wallace Kou. Go ahead, please.

由於隊列中沒有其他問題，我想將會議交還給我們的總裁兼首席執行官華萊士寇先生。請繼續。

Thank you, everyone, for joining us today and for your continuing interest in Silicon Motion. I would leave you with some final thoughts. I'm extremely proud of our execution over the past several quarters and want to thank our team for their hard work and dedication.

感謝大家今天加入我們，感謝您對 Silicon Motion 的持續關注。我會給你一些最後的想法。我為過去幾個季度的執行感到非常自豪，並感謝我們團隊的辛勤工作和奉獻精神。

As a large merchant controller supplier, we play an increasingly critical role in both the NAND supply chain and many critical technology ecosystems. Technology today is built on data, and data need to be stored to be used. And solid state storage-required controllers, our competitive position in the storage controller market has never been stronger, and I remain confident that our growth will continue. Thank you for continuing interest and listening to our call. Goodbye for now.

作為一家大型商用控制器供應商，我們在 NAND 供應鍊和許多關鍵技術生態系統中發揮著越來越重要的作用。今天的技術是建立在數據之上的，數據需要存儲才能使用。以及固態存儲所需的控制器，我們在存儲控制器市場的競爭地位從未如此強大，我仍然相信我們的增長將繼續下去。感謝您一直以來的關注和聆聽我們的電話。暫時告別。

Thank you. And this concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝你。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。