慧榮科技 (SIMO) 2023 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Silicon Motion Technology Corp. Third Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加慧榮科技 2023 年第三季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

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產業趨勢以及我們未來營運績效、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資訊以及我們認為可靠的其他來源的信息，但您不應過度依賴它們。

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 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 obligations to update any forward-looking statements, which apply only as of the date of this conference call.

這些陳述涉及風險和不確定性以及實際市場趨勢，由於各種原因，我們的結果可能與這些前瞻性陳述中明示或暗示的結果有重大差異。潛在的風險和不確定性包括但不限於半導體產業持續的競爭壓力以及這種壓力對價格的影響、技術和消費者對多媒體消費電子產品的需求的不可預測的變化、我們與客戶關係的狀況和任何變化。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，請參閱我們不時向美國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 now, I'd like to hand the conference over to Mr. Jason Tsai, VP of Investor Relations and Finance. Please go ahead, sir.

現在，我想把會議交給投資者關係和財務副總裁 Jason Tsai 先生主持。請繼續，先生。

Thank you. And good morning, everyone, and welcome to Silicon Motion's Third Quarter 2023 Financial Results Conference Call and Webcast.

謝謝。大家早安，歡迎參加慧榮科技 2023 年第三季財務業績電話會議和網路廣播。

Joining me today is Wallace Kou, our President and CEO. Wallace will first provide a review of our key business developments, and I will discuss our third quarter results and our outlook. Following our prepared remarks, we will conclude with a Q&A session. Please note that Riyadh Lai, our CFO, will not be joining us on today's call. Riyadh worked intensively on the merger with MaxLinear over the last 15 months, while continuing to manage all the CFO responsibilities. He's now devoting his time to prepare him for the arbitration against MaxLinear. As a result, I was asked to lead our investor-related activities. We will then conclude with Q&A.

今天加入我的是我們的總裁兼執行長郭建華。華萊士將首先回顧我們的主要業務發展，我將討論我們的第三季業績和前景。在我們準備好的發言之後，我們將以問答環節結束。請注意，我們的財務長 Riyadh Lai 將不會參加今天的電話會議。在過去 15 個月裡，Riyadh 集中精力致力於與 MaxLinear 的合併，同時繼續管理所有 CFO 職責。他現在正花時間為針對 MaxLinear 的仲裁做準備。因此，我被要求領導我們與投資者相關的活動。然後我們將以問答結束。

Before we get started, I would 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 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，該政策已在本次電話會議開始時閱讀。有關投資我們的證券所涉及風險的全面概述，請參閱我們向美國證券交易委員會提交的文件。有關我們財務業績的更多詳細信息，請參閱昨天收市後以 6-K 表格形式提交的新聞稿。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 manner similar to how we analyze our own operating results. The reconciliation of the GAAP to non-GAAP financial data can be found on 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當前經濟表現的了解，我們將在本次電話會議上討論非公認會計準則資訊。我們在內部使用非公認會計準則財務指標來評估和管理我們的營運。因此，我們選擇提供此信息，以便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。公認會計原則與非公認會計原則財務數據的調節可以在我們昨天發布的收益報告中找到。我們要求您結合本次電話會議進行審查。

As we have previously shared, Silicon Motion filed its Notice of Arbitration against MaxLinear for its willful and material breaches of the merger agreement that was signed on May 5, 2022. The company is seeking payment of the termination fee of $160 million, further substantial damages, interest and costs. Please note that the arbitration process is confidential, and we will, therefore, not be commenting further on this matter today.

正如我們之前分享的，Silicon Motion 針對 MaxLinear 故意嚴重違反 2022 年 5 月 5 日簽署的合併協議提交了仲裁通知。該公司正在尋求支付 1.6 億美元的終止費以及進一步的巨額損失、利息和成本。請注意，仲裁過程是保密的，因此我們今天不會就此事進一步發表評論。

With that, I will turn the call over to Wallace.

這樣，我就把電話轉給華萊士。

Thank you, Jason. Hello, everyone, and thank you for joining us today.

謝謝你，傑森。大家好，感謝您今天加入我們。

It is good to speaking with you again after such a long break to provide an update on the progress we have made over the past year and a half. Since our founding nearly 3 decades ago, the strengths of our business and the fundamental drivers of our growth have always been our technology leadership and the quality and depth of our customer partnership.

很高興在經過這麼長時間的休息後再次與您交談，向您介紹我們在過去一年半中取得的最新進展。自近 3 年前成立以來，我們的業務優勢和成長的根本驅動力始終是我們的技術領先地位以及客戶合作夥伴關係的品質和深度。

Today, the statement has never been truer. Silicon Motion Technology leadership continue to enable us to win sockets and grow our share as NAND makers. At the same time, it drives them to rely on us more each day, to outsource more in order to target a wider range of end markets that their own R&D did not have the bandwidth to support. Our relationship with our module maker customer continued to deepen to our broad portfolio of solution, enable them to be the most competitive in their respective end markets.

今天，這句話再真實不過了。慧榮科技的領導地位繼續使我們能夠贏得市場並擴大我們作為 NAND 製造商的份額。同時，這促使他們每天更加依賴我們，進行更多外包，以瞄準更廣泛的終端市場，而他們自己的研發沒有足夠的頻寬來支援。我們與模組製造商客戶的關係不斷深化，我們提供廣泛的解決方案組合，使他們能夠在各自的終端市場中最具競爭力。

Our technology leadership also paves the way for us to expand into additional markets like enterprise and data center storage, automotive, commercial, industrial and IoT. And now that is clear that we will remain a standalone company. Our engagement with our customers have been steadily increasing as well. Our unwavering focus on technology leadership will be what continue to drive our growth longer term and ensure our partnership with both NAND maker and module maker alike remain strong.

我們的技術領先地位也為我們擴展到企業和資料中心儲存、汽車、商業、工業和物聯網等其他市場鋪平了道路。現在很明顯，我們將仍然是一家獨立的公司。我們與客戶的互動也在穩定增加。我們對技術領先地位的堅定不移的關注將繼續推動我們的長期成長，並確保我們與 NAND 製造商和模組製造商的合作關係保持牢固。

With that, I will turn to our results for the third quarter. Our business continued to gain momentum, with the revenue growing 23% sequentially to $172 million and earning per ADS growing 67% sequentially to $0.63. We saw inventory level begin to normalize across the majority of end markets and OEM order activity pick up in the third quarter, leading to a strong revenue growth in the quarter. We expect this trend to continue, and are confident they will lead to strong sequential growth in the fourth quarter.

接下來，我將談談第三季的業績。我們的業務持續保持強勁勢頭，營收季增 23%，達到 1.72 億美元，每 ADS 收益環比成長 67%，達到 0.63 美元。我們看到大多數終端市場的庫存水準開始正常化，OEM 訂單活動在第三季度有所回升，導致本季營收強勁成長。我們預計這一趨勢將持續下去，並有信心它們將在第四季度帶來強勁的環比增長。

While the first half of 2023 was challenging due to the global macro economy weakness and excess inventory in the channels, the inventory level across our end market are normalizing and OEM demand continue to improve. Today, I'm pleased to say that we are shipping to more customers than ever before, working with all the major NAND makers on the multiple engagement across several end markets and expanding our footprint among market-leading module makers with an innovative solution for the smartphone, PC, automotive, industrial, commercial and enterprise markets.

儘管由於全球宏觀經濟疲軟和通路庫存過剩，2023年上半年充滿挑戰，但我們終端市場的庫存水準正在正常化，OEM需求持續改善。今天，我很高興地說，我們正在向比以往更多的客戶發貨，與所有主要NAND 製造商合作，在多個終端市場進行多種合作，並透過針對以下領域的創新解決方案擴大我們在市場領先模組製造商中的足跡。智慧型手機、個人電腦、汽車、工業、商業和企業市場。

We continue to invest in our technology leadership and in coming quarters, expect to introduce several industry-leading solutions for SSD and embedded market. That will drive sustainable long-term profitable growth for our business. QLC NAND is essential to further improve affordability of solid-state storage, but also posted greater challenging to overcome leading to worsened endurance, reliability, data integrity and performance. As flash makers continue to roll out next-generation higher-density 3D QLC NAND with 200 to 300 plus layers, controller technology requirements are scaling up significantly, requiring the use of more sophisticated LDPC, as well as our proprietary 3D RAID technology for better error correction and recovery, data protection and reliabilities.

我們將繼續投資於我們的技術領先地位，並預計在未來幾季為 SSD 和嵌入式市場推出多種領先業界的解決方案。這將推動我們業務的可持續長期獲利成長。 QLC NAND 對於進一步提高固態儲存的可負擔性至關重要，但也面臨更大的挑戰，導致耐用性、可靠性、資料完整性和效能惡化。隨著快閃記憶體製造商不斷推出具有 200 至 300 層以上的下一代更高密度 3D QLC NAND，控制器技術要求顯著提高，需要使用更複雜的 LDPC 以及我們專有的 3D RAID 技術來改善錯誤率糾正和恢復、資料保護和可靠性。

These next-generation controllers will require final design and manufacturing processes to deliver a much higher performance while maintaining the same low-power consumption as previous generation solutions. We invest early in supporting QLC NAND and Silicon Motion have more experience managing the technology than any other company in our industry. Our leadership in these areas are second to none, especially in the merchant market. We expect to continue to maintain our leadership in the market with these next-generation solutions and win meaningful share of a new product with all NAND flash makers, as well as all the leading module makers.

這些下一代控制器將需要最終的設計和製造流程來提供更高的性能，同時保持與上一代解決方案相同的低功耗。我們很早就投資支援 QLC NAND，而慧榮科技比業內任何其他公司都擁有更多的技術管理經驗。我們在這些領域的領導地位是首屈一指的，尤其是在商業市場。我們期望透過這些下一代解決方案繼續保持我們在市場上的領導地位，並在所有 NAND 快閃記憶體製造商以及所有領先的模組製造商中贏得有意義的新產品份額。

From an end market standpoint, excess inventory in the PC and smartphone markets have plagued the industry since late 2022 when the global economy weakened and demand lowered. It has taken nearly a year, but we believe the inventory level in both the PC and smartphone markets are normalizing. We are seeing more consistent order patterns from our customers and better visibility that are more closely aligned with end market demand. We are optimistic that this trend will continue, and that the industry is well positioned to return to growth in 2024.

從終端市場的角度來看，自2022年底全球經濟疲軟、需求下降以來，PC和智慧型手機市場的庫存過剩一直困擾著該產業。雖然花了近一年的時間，但我們相信個人電腦和智慧型手機市場的庫存水準正在正常化。我們看到客戶的訂單模式更加一致，可見度也更好，與終端市場需求更加一致。我們樂觀地認為這一趨勢將持續下去，並且該行業已準備好在 2024 年恢復成長。

Now, let me now discuss our SSD controller business. Our SSD controller business grew 5% to 10% sequentially in the third quarter. We are beginning to see the PC market rebound, and believe that the replacement cycle of corporate that [reached no go] in the early days of COVID are beginning. This should lead to stronger PC demand in the coming months. For the current PCIe Gen4 SSD market, we just began shipping our Gen4 controller to our newest Korean NAND maker customer for their PC OEM customers. And we're now supplying our SSD controller to all, but one of the major NAND makers.

現在，我來談談我們的SSD控制器業務。第三季我們的 SSD 控制器業務較上季成長 5% 至 10%。我們開始看到個人電腦市場反彈，並相信在新冠肺炎疫情初期[沒有進展]的企業更換週期已經開始。這應該會導致未來幾個月的個人電腦需求更加強勁。對於目前的 PCIe Gen4 SSD 市場，我們剛開始向最新的韓國 NAND 製造商客戶運送我們的 Gen4 控制器，以供他們的 PC OEM 客戶使用。我們現在向所有人提供 SSD 控制器，但主要 NAND 製造商之一除外。

Our large expanding NAND flash customer base and our strong share with all the leading module maker continue to position us well in the PC OEM and channel market for SSD. We expect Gen4 SSD to continue to be the majority of the PC SSD market through 2025, and PC OEM will begin adoption of PCIe Gen5 SSD for high-performance PC in 2025 when Intel and AMD adopt standard in notebooks. This PCIe Gen5 SSD will enable much higher data bandwidth and performance that will be critical for next-generation PC, and will also enable new capabilities such as AI as an edge and will eventually become standard.

我們龐大且不斷擴大的 NAND 快閃記憶體客戶群以及我們與所有領先模組製造商的強大份額繼續使我們在 PC OEM 和 SSD 通路市場中佔據有利地位。我們預計到 2025 年，Gen4 SSD 將繼續佔據 PC SSD 市場的主導地位，而當英特爾和 AMD 在筆記型電腦中採用標準時，PC OEM 將在 2025 年開始在高效能 PC 中採用 PCIe Gen5 SSD。這款 PCIe Gen5 SSD 將實現更高的資料頻寬和效能，這對於下一代 PC 至關重要，並且還將實現人工智慧等新功能作為邊緣，並最終成為標準。

We already secured design wins with other flash makers that are outsourcing controller to merchant supplier and expect to begin shipments in late 2024. Our first Gen5 controller is tapping out in this quarter and will serve the high-performing market with an 8-channel solution using TSMC's 6-nanometer technology that will deliver unparalleled performance and low-power consumption. PC OEM expects significantly higher performance with Gen5 SSD. But at the same time, power consumption in Gen4 SSD requiring us to move 6-nanometer process technology to achieve both high performance as well as low-power consumption requirement.

我們已經與其他快閃記憶體製造商取得了設計勝利，這些製造商將控制器外包給商業供應商，預計將於2024 年末開始發貨。我們的第一個Gen5 控制器將於本季度投入使用，並將透過使用8 通道解決方案來服務高效能市場台積電的 6 奈米技術將提供無與倫比的性能和低功耗。 PC OEM 期望 Gen5 SSD 的效能顯著提高。但同時，Gen4 SSD 的功耗要求我們轉向 6 奈米製程技術，以實現高性能和低功耗的要求。

This new SSD controller USB will be nearly double than our comparable 8-channel Gen4 controllers. We expect to tape out our second PCIe Gen5 controller a full channel solution in the second quarter of next year and began sampling in the second half of next year. We expect this solution to help expand the adoption of Gen5 SSD into more mainstream PC in 2026. For the enterprise market, we will sample our MonTitan PCIe Gen5 SSD controller this quarter. We are working with several enterprise and data center customers around the world, and expect to generate initial revenue in late 2024 with more meaningful revenue in 2025 and beyond.

這款新的 SSD 控制器 USB 容量幾乎是我們同類 8 頻道 Gen4 控制器的兩倍。我們預計明年第二季推出第二個 PCIe Gen5 控制器全通道解決方案，並於明年下半年開始提供樣品。我們預計該解決方案將有助於在 2026 年將 Gen5 SSD 的採用擴大到更主流的 PC 中。對於企業市場，我們將在本季度對 MonTitan PCIe Gen5 SSD 控制器進行採樣。我們正在與世界各地的多家企業和資料中心客戶合作，預計在 2024 年末產生初始收入，並在 2025 年及以後產生更有意義的收入。

Now moving to our eMMC and UFS business. Revenue from these products rebounded strongly in the third quarter and more than doubled as demand ramped ahead of the holiday season and inventory level in the channel and smartphone OEM are normalizing. Our diversified customer base of NAND flash makers and module makers have expanded our share with a leading handset OEM. UFS 3.1, as well as the UFS 2.2 solution remains a dominant interface for smartphones, and we continue to win new programs with both flash makers and module makers.

現在轉向我們的 eMMC 和 UFS 業務。隨著假期季前需求的增加以及通路和智慧型手機 OEM 的庫存水準正常化，這些產品的收入在第三季強勁反彈，成長了一倍多。我們由 NAND 快閃記憶體製造商和模組製造商組成的多元化客戶群擴大了我們在領先手機 OEM 中的份額。 UFS 3.1 以及 UFS 2.2 解決方案仍然是智慧型手機的主導接口，我們繼續贏得快閃記憶體製造商和模組製造商的新專案。

UFS 4 is only adopted by factory smartphone today, and we do not expect to see adoption of UFS 4 into mainstream smartphone until 2025. We are working on our own UFS solution also using 6-nanometer process technology to deliver higher performance, while maintaining the same power consumption of the UFS 3.1. We expect to tape-out the product in early January and start sampling in the first half of 2024, with mass production expected in early 2025. We are already engaged with the flash makers as well as module maker, targeting leading handset OEMs and on track to meet their expected ramp for UFS 4 in 2025.

目前，UFS 4 僅在工廠智慧型手機中採用，我們預計要到2025 年，主流智慧型手機才會採用UFS 4。我們正在開發自己的UFS 解決方案，該解決方案也使用6 奈米製程技術來提供更高的效能，同時保持功耗與UFS 3.1相同。我們預計該產品將於1 月初流片，並於2024 年上半年開始出樣，預計2025 年初實現量產。我們已經與閃存製造商和模組製造商進行了接觸，目標是領先的手機OEM 廠商，並已步入正軌以滿足 2025 年 UFS 4 的預期成長。

We are also seeing expanding use case of eMMC and UFS beyond smartphones and have significant wins already in the automotive, IoT, commercial and industrial market with NAND makers as well as module makers. We believe we are well positioned to continue to see our eMMC and UFS business to continue to grow in 2024 and beyond. We have talked a lot about expanding use case of solid-state storage, and I would like to highlight a particular end market as an example of our success in diversifying our business.

我們也看到 eMMC 和 UFS 的用例不斷擴大，超越了智慧型手機，並且已經在汽車、物聯網、商業和工業市場與 NAND 製造商和模組製造商取得了重大勝利。我們相信，我們有能力繼續看到我們的 eMMC 和 UFS 業務在 2024 年及以後繼續成長。我們已經談論了很多關於擴展固態儲存用例的問題，我想強調一個特定的終端市場作為我們在業務多元化方面取得成功的一個例子。

In the automotive market, our embedded SSD controller as well as our FerriSSD are making significant progress with the flash makers and module makers, targeting storage for central vehicle control unit, infotainment, dashboard and ADAS functions. We are shipping our controller to 2 flash maker already and in development with 2 additional flash makers for solution targeting this market. Our FerriSSD are already shipping to several top carmakers, including 2 of the largest Japanese automakers. As we said, we see significant opportunity beyond just smartphone and PC to continue to grow our business. And the success we are seeing in the automotive market across all our product groups is a good example of the traction we have been making.

在汽車市場，我們的嵌入式 SSD 控制器以及 FerriSSD 與快閃記憶體製造商和模組製造商取得了重大進展，目標是中央車輛控制單元、資訊娛樂、儀表板和 ADAS 功能的儲存。我們已經將控制器運送給 2 家快閃記憶體製造商，並正在與另外 2 家快閃記憶體製造商合作開發針對該市場的解決方案。我們的 FerriSSD 已向多家頂級汽車製造商出貨，其中包括兩家最大的日本汽車製造商。正如我們所說，我們看到了超越智慧型手機和個人電腦的巨大機遇，可以繼續發展我們的業務。我們在汽車市場上所有產品組所取得的成功就是我們一直以來所取得的牽引力的一個很好的例子。

Overall, we are pleased by the progress we are making despite macroeconomy headwinds for the industry this year. Our focus on our technology leadership has yielded strong customer traction, strong share in the market we serve and diversified the end market our products are using. Combined, we expect all of this to drive growth in 2024 as the end market and the NAND flash industry economies improve.

總體而言，儘管今年該行業面臨宏觀經濟阻力，但我們對所取得的進展感到高興。我們對技術領先地位的關注產生了強大的客戶吸引力，在我們所服務的市場中佔據了強大的份額，並使我們產品所使用的終端市場多樣化。總而言之，隨著終端市場和 NAND 快閃記憶體產業經濟的改善，我們預計所有這些都將推動 2024 年的成長。

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

現在，我將把電話轉給傑森，討論我們的財務表現和前景。

Thank you, Wallace, and good morning, everyone.

謝謝你，華萊士，大家早安。

I will discuss additional details of our third quarter results and then provide our guidance. Please note that 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 our earnings release issued yesterday.

我將討論我們第三季業績的更多細節，然後提供我們的指導。請注意，除非另有特別說明，否則我今天的評論將主要集中在我們的非公認會計準則績效上。我們的 GAAP 與非 GAAP 數據的調整包含在我們昨天發布的收益報告中。

In the third quarter, we grew sales 23% sequentially to $172 million. SSD controller sales grew 5% to 10% sequentially. eMMC and UFS controller sales more than doubled sequentially, as we benefited from ramping holiday season build and normalizing inventory levels. SSD solutions sales decreased 5% to 10% sequentially. Gross margins in the third quarter were stable sequentially and remained at 42.5%. Operating expenses in the third quarter were $49.5 million, $1.5 million higher than the prior quarter, primarily from higher R&D expenses to support our technology leadership.

第三季度，我們的銷售額較上季成長 23%，達到 1.72 億美元。 SSD 控制器銷量較上月成長 5% 至 10%。 eMMC 和 UFS 控制器的銷售額連續成長了一倍以上，這得益於假日季節產量的增加和庫存水準的正常化。 SSD 解決方案銷售額季減 5% 至 10%。第三季毛利率較上季穩定，維持在42.5%。第三季營運費用為 4,950 萬美元，比上一季增加 150 萬美元，主要是因為支持我們技術領先地位的研發費用增加。

Operating margin in the third quarter was 13.8%, an increase from 8.3% in the second quarter. Our effective tax rate in the third quarter was 22.8%, an increase from the 12.7% tax rate in the second quarter. Earnings per ADS were $0.63, 67% higher sequentially. Stock-based compensation and our operating expense, which we exclude from non-GAAP results, was $3.8 million in the third quarter. We had $350.3 million of cash, cash equivalents, restricted stock and short-term investments at the end of the third quarter compared to $305 million at the end of the second quarter. Inventory decreased again sequentially in the third quarter to $199 million from $251 million in the second quarter. Earlier this week, our Board declared a new annual dividend of $2 per ADS. The first $0.50 installment will be paid in November.

第三季營業利益率為 13.8%，高於第二季的 8.3%。我們第三季的有效稅率為22.8%，較第二季的12.7%有所提高。每份 ADS 收益為 0.63 美元，比上一季成長 67%。第三季基於股票的薪酬和我們的營運費用（我們將其排除在非 GAAP 業績之外）為 380 萬美元。截至第三季末，我們的現金、現金等價物、限制性股票和短期投資為 3.503 億美元，而第二季末為 3.05 億美元。第三季庫存再次環比下降，從第二季的 2.51 億美元降至 1.99 億美元。本週早些時候，我們的董事會宣布新的年度股息為每份 ADS 2 美元。第一期 0.50 美元分期付款將於 11 月支付。

Now let me turn to our fourth quarter guidance and forward-looking business trends. In the fourth quarter, we expect revenue to be up 10% to 15% sequentially to approximately $190 million to $198 million. We expect SSD controller sales to be stable in the fourth quarter, while eMMC and UFS controller sales will increase. Fourth quarter gross margin is expected to be stable and be in the range of 42.5% to 43.5%. Fourth quarter operating margin should be in the range of 13.5% to 15.5%. Fourth quarter effective tax rate to be approximately unchanged from the third quarter. And in the fourth quarter, we expect stock-based compensation in the range of $6.2 million to $7.2 million.

現在讓我談談我們的第四季指導和前瞻性業務趨勢。我們預計第四季營收將季增 10% 至 15%，達到約 1.9 億至 1.98 億美元。我們預計第四季SSD控制器銷售將保持穩定，而eMMC和UFS控制器銷售將增加。第四季毛利率預計將穩定在42.5%至43.5%之間。第四季營業利潤率應在 13.5% 至 15.5% 之間。第四季有效稅率與第三季基本持平。我們預計第四季的股票薪酬將在 620 萬美元至 720 萬美元之間。

Let me provide some additional color to our fourth quarter expectations. Our business will continue to rebound in the fourth quarter, and sequential revenue growth is expected to be stronger than normal seasonality. Our gross margins are expected to be flat to up slightly. We expect our gross margins to improve gradually over the next few quarters as the financial health of the NAND makers and the memory market overall slowly improves. Most of our NAND maker and module maker customers have been selling NAND products below their cost since early this year. And even with the sharp increases in NAND prices we've seen lately, it is still challenging, especially for NAND makers.

讓我為我們第四季的預期提供一些額外的資訊。我們的業務將在第四季度繼續反彈，預計營收環比成長將強於正常季節性。我們的毛利率預計將持平或略有上升。我們預計，隨著 NAND 製造商的財務狀況和記憶體市場整體緩慢改善，我們的毛利率將在未來幾季逐步改善。自今年年初以來，我們的大多數 NAND 製造商和模組製造商客戶一直以低於成本的價格銷售 NAND 產品。即使我們最近看到 NAND 價格大幅上漲，這仍然具有挑戰性，尤其是對於 NAND 製造商而言。

Our pricing is somewhat reflective of our customers' challenges and as their financial conditions improve, we believe we can gradually improve our pricing and our margins, but it will take time. Our cost of goods, especially wafer prices remain high, but we believe we can extract some additional manufacturing cost improvements over the next few quarters as well. Combined with an improving mix of new products, including the new -- our new Gen -- PCIe Gen4 and 5 controllers and UFS 4 solutions, we believe we can gradually return to our historical gross margin levels.

我們的定價在一定程度上反映了客戶面臨的挑戰，隨著他們的財務狀況改善，我們相信我們可以逐步提高定價和利潤，但這需要時間。我們的商品成本，特別是晶圓價格仍然很高，但我們相信我們也可以在接下來的幾季中實現一些額外的製造成本改善。結合不斷改進的新產品組合，包括新的（我們的新一代）PCIe Gen4 和 5 控制器以及 UFS 4 解決方案，我們相信我們可以逐漸恢復到歷史毛利率水準。

For operating expenses, as Wallace mentioned, we will be taping out 3 new 6-nanometer controllers, our 8-channel PCIe Gen5 controller this quarter, our UFS 4 controller in the first quarter and our 4 channel PCIe Gen5 controller in the second quarter. The total investments to get each of these products to market is more than $15 million. So, we expect our operating expense to be elevated for these 3 quarters and then come down a bit in the second half of next year, driving additional operating margin leverage.

對於營運費用，如Wallace 所提到的，我們將在本季推出3 個新的6 奈米控制器，即我們的8 通道PCIe Gen5 控制器，在第一季推出UFS 4 控制器，在第二季推出4 通道PCIe Gen5 控制器。將這些產品推向市場的總投資超過 1500 萬美元。因此，我們預計這三個季度的營運費用將有所上升，然後在明年下半年略有下降，從而推動額外的營運利潤率槓桿。

As Wallace mentioned, our business is steadily improving as end market demand stabilizes and inventory levels normalize. We'll continue to invest to maintain our technology leadership with best-in-class next-generation storage controllers. Our broadening product portfolio and diversified customer base will further solidify our strong foundation for continuing revenue and profitability growth. We are optimistic that industry conditions will improve and believe we are well positioned to benefit from these improving market dynamics.

正如華萊士所提到的，隨著終端市場需求穩定和庫存水準正常化，我們的業務正在穩步改善。我們將繼續投資，透過一流的下一代儲存控制器來保持我們的技術領先地位。我們不斷擴大的產品組合和多元化的客戶群將進一步鞏固我們持續收入和獲利成長的堅實基礎。我們對行業狀況將會改善持樂觀態度，並相信我們能夠從這些改善的市場動態中受益。

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

我們準備好的演講到此結束。我們現在將開始電話詢問您的問題。操作員？

(Operator Instructions) Our first question comes from the line of Mehdi Hosseini from SIG.

（操作員說明）我們的第一個問題來自 SIG 的 Mehdi Hosseini。

Yes. Two for me. First, in terms of technology migration among the NAND manufacturers, I wanted to better understand how increased adoption of QLC is helping you? And how should we compare that to end market system unit trend? In other words, how a smartphone, notebook unit would fare against migration to QLC?

是的。給我兩個。首先，就 NAND 製造商之間的技術遷移而言，我想更了解 QLC 的採用增加對您有何幫助？我們應該如何將其與終端市場系統單位趨勢進行比較？換句話說，智慧型手機、筆記型電腦如何應對向 QLC 的遷移？

And my second question has to do with a strong cash. And what would it take for a company to -- or for the Board and the company to become more aggressive in a stock buyback?

我的第二個問題與雄厚的現金有關。公司或董事會和公司如何更積極地回購股票？

So let me answer your first question, Mehdi. Regarding QLC, we see the trends. All NAND makers are going to have a QLC NAND and product by late 2024. So, we see QLC initially all transition to client SSD. And we believe in 2025, probably value line, more than 80% of value line SSD will all adopt QLC in 2025. And we've seen the QLC trending into mobile phone will take time. And I believe the leading smartphone maker, which will try to adopt QLC, but when it's going to be in mass production, when it will create a meaningful volume, we don't know yet. All the NAND makers are trying to explore the opportunity. But we also believe QLC will enter data center sometime in 2026 or 2027. That's why QLC becomes very, very important, and it becomes a major offer for the NAND maker after 2026, 2027.

那麼讓我回答你的第一個問題，邁赫迪。關於QLC，我們看到了趨勢。到 2024 年底，所有 NAND 製造商都將擁有 QLC NAND 和產品。因此，我們看到 QLC 最初全部過渡到客戶端 SSD。我們相信到2025年，可能是價值線，超過80%的價值線SSD將在2025年全部採用QLC。而且我們已經看到QLC趨勢進入手機還需要時間。我相信領先的智慧型手機製造商將嘗試採用 QLC，但何時量產、何時產生有意義的銷量，我們還不知道。所有NAND廠商都在努力探索這個機會。但我們也相信QLC將在2026年或2027年的某個時候進入資料中心。這就是為什麼QLC變得非常非常重要，它成為2026年、2027年後NAND製造商的主要報價。

And Mehdi, to answer your second question about the share repurchase, as you know, our share repurchase program has been opportunistic in the past. We do not have a program in place today, but the Board is always evaluating ways of returning cash to shareholders and share repurchase is something that they will continue to look at.

邁赫迪，回答你關於股票回購的第二個問題，正如你所知，我們的股票回購計畫過去一直是機會主義的。我們目前還沒有製定計劃，但董事會一直在評估向股東返還現金的方式，他們將繼續考慮股票回購。

If I may, just a quick follow-up to Wallace. Let me rephrase my first question. Let's say, if units, units of smartphone and notebook were to go flattish next year, could the migration to QLC for client SSD drive growth? Is that something that could provide additional growth drivers?

如果可以的話，請快速跟進華萊士。讓我重新表達我的第一個問題。假設明年智慧型手機和筆記型電腦的銷售持平，客戶端 SSD 向 QLC 的遷移能否推動成長？這是否可以提供額外的成長動力？

I think that we believe our customers will gain market share in 2024, although the total unit for PC might not grow very much, maybe just a single-digit of 2% to 3% because our strong technology in QLC and supporting with our major controllers for both Gen4, Gen5 are going to be helping us to transition to take additional market share in 2024.

我認為我們相信我們的客戶將在2024 年獲得市場份額，儘管PC 的總銷量可能不會增長太多，可能只是2% 到3% 的個位數，因為我們在QLC 方面擁有強大的技術並支持我們的主要控制器對於 Gen4 和 Gen5 來說，Gen5 將幫助我們實現轉型，以在 2024 年獲得更多市場份額。

Our next question comes from the line of Quinn Bolton from Needham & Company.

我們的下一個問題來自 Needham & Company 的 Quinn Bolton。

Congrats on the nice results and outlook. I guess maybe first Wallace and Jason, can you just maybe expand on your outlook for gross margins? I know you're looking for sort of a gradual recovery as the market improves. But can you give a little bit of shape to that gradual? Is that sort of 50 basis points a quarter? Is it 100 basis points a quarter? What kind of trajectory would you see? And any thoughts on when you might get back to kind of a 48% to 50% gross margin would be helpful?

祝賀取得了良好的成果和前景。我想首先是華萊士和傑森，你們能否擴展一下你們對毛利率的展望？我知道隨著市場的改善，您正在尋求逐步復甦。但是你能為這個漸層賦予一點形狀嗎？是每季 50 個基點嗎？是每季100個基點嗎？你會看到什麼樣的軌跡？關於什麼時候可以恢復到 48% 到 50% 毛利率的任何想法都會有幫助嗎？

Yes. So look, obviously, as you know, there are still a lot of challenges in the NAND flash industry. NAND makers are still struggling economically. And our goal is obviously to continue to gradually improve our gross margins and get back to where historically we were. And as the industry's health improves, we believe our pricing, our gross margins will also improve. And as we roll out new products, the new products that we talked about just a little while ago, right, some of the new PCIe Gen4, Gen5 and UFS 4 controllers as those come out to market, that will also have an uplift to our gross margins. But we haven't provided specific guidance for next year. And certainly, as we move into January report on fourth quarter, we'll have a better view on what that longer-term gross margin profile looks like for next year.

是的。所以你看，顯然，如你所知，NAND快閃記憶體產業仍然存在著許多挑戰。 NAND 製造商仍在經濟上陷入困境。我們的目標顯然是繼續逐步提高毛利率並回到歷史水平。隨著行業健康狀況的改善，我們相信我們的定價和毛利率也會提高。當我們推出新產品時，我們剛才談到的新產品，對吧，一些新的 PCIe Gen4、Gen5 和 UFS 4 控制器即將上市，這也將提升我們的性能。毛利率。但我們尚未提供明年的具體指導。當然，當我們進入一月份第四季的報告時，我們將對明年的長期毛利率狀況有更好的了解。

Great. And then just looking forward to the kind of the eMMC and UFS market, can you kind of give your thoughts on market share looking forward? I think one of your customers is trying to in-source UFS 4. Does that have a significant impact on your outlook? Or do you think it's just -- there are some puts, some takes, but you still feel very confident about your overall market share position in UFS?

偉大的。那麼對於eMMC和UFS市場的展望，您能談談您對未來市場佔有率的看法嗎？我認為您的一位客戶正在嘗試內購 UFS 4。這對您的前景有重大影響嗎？或者您認為這只是——有一些看跌，一些看跌，但您仍然對自己在 UFS 的整體市場份額地位非常有信心？

Yes. We believe one of our major customer partners or NAND makers, they have a internal solution controller for UFS 4 since 4 years ago, that we know that. But as you know, we're working closely with this particular partner because for each of the NAND makers, their controller probably supports 1 to 2 generation NAND. So they have -- when you have a new generation NAND and that's the opportunity we've taken. So, we'll continue to discuss the future opportunity with this customer and to expand even to the additional new legacy UFS 2.2, 3.1, as well as the potential newer generation, including UFS 5.0.

是的。我們相信我們的主要客戶合作夥伴或 NAND 製造商之一，他們從 4 年前就擁有 UFS 4 的內部解決方案控制器，我們知道這一點。但如您所知，我們正在與這個特定的合作夥伴密切合作，因為對於每個 NAND 製造商來說，他們的控制器可能支援 1 到 2 代 NAND。所以當你擁有新一代 NAND 時，我們就抓住了這個機會。因此，我們將繼續與該客戶討論未來的機會，甚至擴展到其他新的傳統 UFS 2.2、3.1，以及潛在的新一代，包括 UFS 5.0。

In addition, we have engaged multiple NAND makers, not just one for UFS. So, we are targeting a new customer in production from late Q1 or early Q2. And so I think because our technology expanded and because there are more NAND coming to the market and we definitely benefit for more NAND maker, which don't have internal resource on the Wave G third-party controller like Silicon Motion to help engage with the smartphone market.

此外，我們還聘請了多家 NAND 製造商，而不僅僅是一家 UFS 製造商。因此，我們的目標是從第一季末或第二季初開始生產新客戶。所以我認為，因為我們的技術得到了擴展，並且因為有更多的NAND 進入市場，我們肯定會讓更多的NAND 製造商受益，這些製造商沒有像Silicon Motion 這樣的Wave G 第三方控制器的內部資源來幫助與智慧型手機市場。

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

我們的下一個問題來自 Craig-Hallum 的 Anthony Stoss。

Wallace, you gave us some info on what you expect PC growth and that you expect to grow faster for taking share. I'm curious if you'd offer something kind of overall, including smartphones, auto, et cetera, where you think 2024 growth might be for Silicon Motion? Then I had a couple of follow-ups.

華萊士，您向我們提供了一些關於您對 PC 成長的預期以及您希望以更快的速度成長以獲取份額的資訊。我很好奇您是否會提供某種整體產品，包括智慧型手機、汽車等，您認為慧榮科技 2024 年的成長可能在哪些方面？然後我進行了幾次跟進。

Well, I think it's a good question, but I think we will wait for our Q4 earnings call. We'll give you guidance. But we're definitely looking forward to continue growing in 2024. And what scale? I think that we will give our guidance for next earnings call.

嗯，我認為這是一個很好的問題，但我認為我們將等待第四季度的財報電話會議。我們將為您提供指導。但我們絕對期待 2024 年繼續成長。規模是多少？我認為我們將為下一次財報電話會議提供指導。

Okay. And then following up on the comment on large Korean NAND maker now back, and I believe you said in Q3, can you give us a sense of kind of design activity you have with that customer for 2024? What percentage of their share you think you'll have?

好的。然後跟進現在對韓國大型 NAND 製造商的評論，我相信您在第三季度說過，您能否讓我們了解您與該客戶在 2024 年的設計活動？您認為您將獲得他們的份額是多少？

We're not able to comment regarding particular customer. But overall, we see significant growth opportunity with all flash makers, although there is some potential consolidation, but we believe we'll continue to see opportunity open for Silicon Motion to grow our share with our customers.

我們無法對特定客戶發表評論。但總體而言，我們看到所有快閃記憶體製造商都有巨大的成長機會，儘管存在一些潛在的整合，但我們相信我們將繼續看到慧榮有機會增加我們在客戶中的份額。

Okay. And last question for me. Over the last year or so with the MaxLinear proposed deal, do you felt that some of your customers were opting or thinking about moving to their own internal solutions or external? Seems like they're reengaged. I guess I'm trying to figure out, if you lost share in terms of designs maybe for, I don't know, 2024 or something just based on the MaxLinear deal and the pause that, that may have created.

好的。還有我的最後一個問題。在過去一年左右的時間裡，MaxLinear 提議的交易中，您是否覺得您的一些客戶正在選擇或考慮轉向他們自己的內部解決方案或外部解決方案？看來他們又複合了我想我正在試圖弄清楚，如果你在設計方面失去了份額，也許是在 2024 年，我不知道，或者只是基於 MaxLinear 交易以及可能造成的暫停。

Yes. From our legal counsels -- but we cannot comment any of MaxLinear's related question. But I think that as you know very well, for any conventional M&A, it definitely has a certain impact for the customer. If the customer do not understand the potential buyer, so they have some fear and concern. I cannot give you how that really impacts for our business. But definitely, every company have some gain, have some loss. But overall, we will continue to gain market share and with more opportunity. And especially after July 26, we do see the momentum become stronger.

是的。來自我們的法律顧問 - 但我們無法評論 MaxLinear 的任何相關問題。但我想大家都很清楚，對於任何傳統的併購來說，對顧客來說肯定是有一定的影響的。如果客戶不了解潛在買家，那麼他們就會有一些恐懼和擔憂。我無法告訴您這對我們的業務有何真正影響。但可以肯定的是，每家公司都有一些收穫，也會有一些損失。但總體而言，我們將繼續獲得市場份額和更多機會。尤其是7月26日之後，我們確實看到勢頭變得更強。

Our next question comes from the line of Suji Desilva from ROTH MKM.

我們的下一個問題來自 ROTH MKM 的 Suji Desilva。

So congrats on the progress here. So the eMMC, UFS market, smartphone, you had very strong results this quarter, you're guiding for that. Just can you give us a sense of the sustainability of the recovery in the end market and the demand perspective versus -- is the channel restocking? And are channel inventories typical levels now? Or are they actually leaner than typical?

所以要祝賀這裡的進展。因此，eMMC、UFS 市場、智慧型手機，本季你們取得了非常強勁的業績，你們正在為此提供指導。您能否讓我們了解終端市場復甦的可持續性以及需求前景與通路是否補貨？現在通路庫存是典型水準嗎？或者他們實際上比一般人更瘦？

Yes. Let me comment about the smartphone market based on my -- our view. The channel inventory has become normal and in a healthy position. We definitely see growth rebound for both eMMC and UFS products. And we also see we will gain more share for the UFS in 2024. And although I think in managing particular customers, they have internal controller, but that's the UFS 4.0 for next year, primarily still see UFS 3.1 as well as the 2.2 for 4G smartphone. And we see we'll have more customers jumping into the market and that's why we are able to gain market share.

是的。讓我根據我的觀點來評論智慧型手機市場。渠道庫存已趨於正常且健康。我們肯定會看到 eMMC 和 UFS 產品的成長反彈。 And we also see we will gain more share for the UFS in 2024. And although I think in managing particular customers, they have internal controller, but that's the UFS 4.0 for next year, primarily still see UFS 3.1 as well as the 2.2 for 4G智慧型手機.我們看到會有更多的客戶進入市場，這就是我們能夠獲得市場份額的原因。

And in addition, we are working directly with the smartphone maker to tailor certain soft firmware and to specify for certain requirements that gave us advantage compared with even NAND maker to provide the solution for a specific customer. So, we're very happy for our position. I think in certain detail, if we are able to, we will release during the next quarter or 2.

此外，我們還直接與智慧型手機製造商合作，客製化某些軟固件並指定某些要求，這使我們比 NAND 製造商更有優勢，可以為特定客戶提供解決方案。所以，我們對我們的立場感到非常高興。我認為在某些細節上，如果可以的話，我們將在下一季或第二季發布。

Okay. Wallace, that's helpful. And then my other question is on the operating expenses. Jason, I think you talked about the R&D being elevated for the next 2 to 3 quarters. Can you give a sense of what it comes back to after that in the second half '24? Is it back to sort of the $40 million level in the second quarter? Or just trying to understand what it reverts to after the elevated spend in the next 3 quarters?

好的。華萊士，這很有幫助。我的另一個問題是關於營運費用。傑森，我想您談到了未來 2 到 3 個季度的研發投入。能透露一下24年下半年之後的情況嗎？第二季是否又回到了 4000 萬美元的水平？或者只是想了解未來三個季度支出增加後會恢復到什麼水準？

Yes. It's -- we'll obviously provide more color on that in the next earnings call, but it will temper back a little bit. As we said, the total investment cost for each of these 6-nanometer products is north of $15 million. Obviously, all of that -- not that entire cost is beared in one single quarter. It does get spread out over several quarters, depending on the timeframe of the investment process into that new controller. So it will step back a little bit in Q3 and Q4 next year, but we'll provide more color on that in next quarter -- next earnings call.

是的。我們顯然會在下一次財報電話會議上對此提供更多信息，但情況會有所緩和。正如我們所說，每種 6 奈米產品的總投資成本都超過 1500 萬美元。顯然，所有這些——並不是全部成本都是在一個季度內承擔的。它確實會分散在幾個季度中，這取決於新控制人的投資流程的時間框架。因此，明年第三季和第四季它將略有回落，但我們將在下個季度（下一次財報電話會議）提供更多資訊。

I can give you addition -- I'll give you some reference. 6-nanometer tape-out, normally that probably is about 30 to 40 -- it will be two times to 3x more expensive than 12-nanometer tape-out. And we believe after the 3 6-nanometer tape-out, we won't have any 6-nanometer tape-out within a year. But we do have additional 12-nanometer, 28-nanometer tape-out quarter-by-quarter. So definitely, operational expense will go down, but versus scale, it depends on product, how many products we're going to tape-out. So, I think we'll give you more color when we have the next quarter or next year guidance.

我可以給你補充——我會給你一些參考。 6 奈米流片，通常大約為 30 到 40 奈米——它比 12 奈米流片貴兩倍到 3 倍。我們相信，在3個6奈米流片之後，一年內我們不會再有任何6奈米流片。但我們確實每季都有額外的 12 奈米、28 奈米流片。因此，營運費用肯定會下降，但與規模相比，這取決於產品，我們要流片的產品數量。因此，我認為當我們有下個季度或明年的指導時，我們會給您更多的資訊。

Our next question comes from the line of Gokul Hariharan from J.P. Morgan.

我們的下一個問題來自摩根大通的 Gokul Hariharan。

Congrats on the good rebound in the numbers. My first question is, could you give us a little bit of a kind of a backdrop in terms of how your market share situation is right now for client SoC controller? Just to get an update after almost a year or more than a year in terms of their market share is? And also, you did allude to some of the design wins in enterprise and data center. Could you give us a little bit of a color on what is the size of the opportunity there? And what is the nature of engagement you have? Is it still mostly the PCIe Gen5 controllers for enterprise market? Or are there -- previously, you had tried open-channel controllers for certain segments of the market. So, just wanted to understand what is the approach to kind of tap into the enterprise market and data center market size?

祝賀數字的良好反彈。我的第一個問題是，您能否向我們介紹一下您目前客戶端 SoC 控制器的市場佔有率？只是為了在近一年或一年多後獲得其市場份額的更新嗎？而且，您確實提到了企業和資料中心的一些設計勝利。您能為我們介紹一下那裡的機會有多大嗎？您的參與度是怎樣的？企業市場仍以 PCIe Gen5 控制器為主嗎？或者是否存在 - 之前，您曾嘗試過針對某些市場部分使用開放通道控制器。那麼，只是想了解進入企業市場和資料中心市場規模的方法是什麼？

All right, Gokul. Thank you. Great to talk to you again. Regarding the -- our client market share, we continue to maintain a stable market share around 30%, maybe up and down a little bit, but I think we're gaining market share continuing for 2024. But regarding the data center, I think the major enterprise product, we're shipping meaningful still SATA. And our PCIe, really, we focus on PCIe Gen5 because Gen4 controller, we're not able to show meaningful financial results, and it's not cost competitive. But PCIe Gen5 MonTitan, we are in a very good position, we believe, worldwide show meaningful financial results by end of 2024 and more meaningful in 2025.

好吧，戈庫爾。謝謝。很高興再次與你交談。關於我們的客戶市場份額，我們繼續保持穩定的市場份額在 30% 左右，可能會有一點上下，但我認為我們將在 2024 年繼續獲得市場份額。但關於數據中心，我認為作為主要企業產品，我們推出的SATA 仍然有意義。我們的 PCIe，實際上，我們專注於 PCIe Gen5，因為 Gen4 控制器，我們無法顯示有意義的財務結果，而且它不具有成本競爭力。但對於 PCIe Gen5 MonTitan，我們處於非常有利的位置，我們相信，到 2024 年底，全球將顯示出有意義的財務業績，到 2025 年將更有意義。

So could you give us a sense of how big this enterprise and data center market size is? I think I remember a few years back when you started talking about this, you indicated that it is similar size to the client SSD market in terms of controller revenue size. Any updates on how big the market is, given data center demand has clearly grown since then?

那麼您能否讓我們了解這個企業和資料中心的市場規模有多大？我想我記得幾年前，當您開始談論這個問題時，您表示就控制器收入規模而言，它與客戶端 SSD 市場的規模相似。鑑於資料中心需求自那時以來明顯增長，有關市場有多大的最新資訊？

Gokul, it's Jason here. Yes, look, we're seeing a good traction today. We're working with a number of data center and enterprise customers around the world. But it's still early. We're going to start sampling this quarter. It's too early to say how big that opportunity is at this point. As we get closer to launch, as we have more concrete and better visibility, we'll be able to provide more additional details at that point. But right now, it's just a little bit early.

戈庫爾，我是傑森。是的，看，今天我們看到了很好的牽引力。我們正在與世界各地的許多資料中心和企業客戶合作。但現在還早。我們將於本季開始抽樣。現在說這個機會有多大還為時過早。隨著我們越來越接近發布，由於我們擁有更具體和更好的可見性，我們將能夠在那時提供更多額外的細節。但現在看來，還為時過早。

Okay. Got it. And one question on pricing. Could you talk a little bit about how pricing has evolved in the last 12 months or so? Clearly, pricing seems to have come off from the $4 to $5 kind of average client SSD controller ASP that you had? And do we need to wait for Gen5 to really come through on the client SSD controllers for you to start potentially seeing some price increases coming through? Do you need to wait for the next generation for like price increases to come through? Or do you think that you can adjust price as we go along, once the market starts getting a little bit better?

好的。知道了。還有一個關於定價的問題。您能否談談過去 12 個月左右的定價是如何演變的？顯然，定價似乎已經從您擁有的 4 至 5 美元的普通客戶端 SSD 控制器 ASP 中下調了？我們是否需要等待 Gen5 真正在客戶端 SSD 控制器上實現，您才能開始看到價格上漲？您是否需要等待下一代產品才會出現類似的價格上漲？或者您認為一旦市場開始好轉，您可以隨著我們的進度調整價格嗎？

As you know very well, this year is very challenging for NAND flash makers as well as the controller makers because before September, 90% of our customers are selling product below cost. And thanks to the price increase in the last 2 months, many NAND makers, their gross margin is still negative. And we, definitely, as a leading controller maker, we have to share the pain. But we believe when the NAND price gradually recover to breakeven and become profitable, our certain controller segment, and we will also gradually increase the ASP. But I think the PCIe Gen5 8 channel controller, as we stated, the ASP is two times than Gen4 8 channel controller. And this would be much more competitive in helping for both gross margin and also ASP. And we also believe the PCIe to UFS 5.0 -- 4.0 also gaining -- help us gaining mix regarding both gross margin as well as ASP. So, we do have other new products coming and also create a more positive regarding the product mix by helping our ASP and gross margin.

大家都知道，今年對 NAND 快閃記憶體製造商和控制器製造商來說都是非常具有挑戰性的，因為在 9 月之前，我們 90% 的客戶都以低於成本的價格銷售產品。而得益於近2個月的漲價，不少NAND廠商的毛利率仍然為負。當然，作為領先的控制器製造商，我們必須分擔痛苦。但我們相信，當NAND價格逐漸恢復到損益平衡並實現獲利時，我們一定的控制器細分市場，我們也會逐漸提高ASP。但我認為 PCIe Gen5 8 通道控制器，正如我們所說，ASP 是 Gen4 8 通道控制器的兩倍。這在提高毛利率和平均售價方面將更具競爭力。我們也相信 PCIe 到 UFS 5.0（4.0 也在成長）有助於我們在毛利率和平均售價方面獲得混合。因此，我們確實推出了其他新產品，並透過幫助我們的平均售價和毛利率創造了更積極的產品組合。

Our next question comes from the line of Matt Bryson from Wedbush Securities.

我們的下一個問題來自韋德布希證券公司 (Wedbush Securities) 的 Matt Bryson。

Yes. First question is, I think in the prepared remarks, you mentioned that there's still some inventory getting worked down at your customers. I guess, in Q4, is the expectation with that guide that inventory is fully worked down? Or is there a potential that there's still some incremental revenue that you'll see in forward quarters because inventories are normalized in future periods?

是的。第一個問題是，我認為在準備好的評論中，您提到您的客戶仍有一些庫存正在減少。我想，在第四季度，該指南對庫存的預期是否已完全下降？或者，由於未來期間庫存正常化，您在未來幾季是否仍有可能看到一些增量收入？

Matt, it's Jason here. I think we're very close to normalized inventory levels, if not there already. There may be -- I mean, it varies by product, by product. It varies customer by customer end market. But by and large, we see inventory has normalized for the vast majority of the end markets and customers that we work with.

馬特，我是傑森。我認為我們已經非常接近正常庫存水準（如果還沒有達到的話）。可能有——我的意思是，它因產品而異。它因客戶終端市場而異。但總的來說，我們看到與我們合作的絕大多數終端市場和客戶的庫存已經正常化。

And I guess my second question is around new products. So it sounds like both in terms of returning pricing and margins -- or returning margins to more traditional historic levels, as well as potentially seeing some revenue growth tied to higher ASPs that the new products are very important. I guess, is there any help you can give us in terms of thinking about how those parts roll out, either in terms of time after tape-out, the revenue starts to become meaningful? Or if you could give us some color around when you think customers start shifting to either Gen5 PCIe or UFS 4.0 solutions. That would be really helpful.

我想我的第二個問題是關於新產品的。因此，聽起來無論是在恢復定價和利潤率方面，還是在將利潤率恢復到更傳統的歷史水平方面，以及可能看到一些收入增長與更高的平均售價相關的情況下，新產品都非常重要。我想，在思考這些部件如何推出方面，您能給我們任何幫助嗎？或者在流片後的時間方面，收入開始變得有意義？或者，當您認為客戶開始轉向 Gen5 PCIe 或 UFS 4.0 解決方案時，您是否可以給我們一些說明。這真的很有幫助。

Yes. So, our first 8-channel Gen5 controller is getting taped out right now. We'll start sampling that here shortly, and then we expect to start seeing the first shipments late 2024. UFS 4.0 is getting taped out in the first quarter. We'll start seeing shipments of that late 2024 into 2025. And then the 4 channel Gen5 SSD controller, that's really more of a late '25 -- mid- to late '25 into '26 type event for us.

是的。因此，我們的第一個 8 通道 Gen5 控制器現已流片。我們很快就會開始在這裡進行採樣，然後我們預計將在 2024 年底開始看到第一批發貨。UFS 4.0 將於第一季流片。我們將開始看到 2024 年末到 2025 年的出貨量。然後是 4 通道 Gen5 SSD 控制器，這對我們來說實際上更像是 25 世紀末——25 世紀中後期到 26 世紀的事件。

(Operator Instructions) Our next question comes from the line of Craig Ellis from B. Riley Securities.

（操作員指示）我們的下一個問題來自 B. Riley 證券公司的 Craig Ellis。

This is Ethan Widell calling in for Craig Ellis. To start, you provided some good color on the near to intermediate term slope of OpEx as you focused on strategic investments. I was wondering to what extent the timing of those investments is sensitive to the slope of recovery in end market demand?

我是伊森·維德爾 (Ethan Widell) 為克雷格·埃利斯 (Craig Ellis) 打電話。首先，當您專注於策略性投資時，您對營運支出的近中期斜率提供了一些很好的說明。我想知道這些投資的時機對終端市場需求復甦的斜率有多敏感？

I'm sorry. What's the slope of the OpEx? And how does it tie to the end market recovery? Is that what you asked?

對不起。營運支出的斜率是多少？它與終端市場復甦有何關係？這是你問的嗎？

Right.

正確的。

Yes. So obviously, we're seeing strength in the end markets. The guidance we provided for Q4 is stronger than seasonal. And then certainly, we expect to continue to grow in 2024 as well. The OpEx should stay at these levels for Q4, Q1 and Q2, and then that will come down a little bit in the second half of next year, but that's depending on the number of additional tape-outs that we'll be doing can vary a little bit. So, we'll provide more color around that next earnings call.

是的。顯然，我們看到了終端市場的實力。我們為第四季度提供的指導比季節性指導更強。當然，我們預計 2024 年也將持續成長。第四季、第一季和第二季的營運支出應該保持在這些水平，然後在明年下半年會略有下降，但這取決於我們將進行的額外流片數量可能會有所不同一點點。因此，我們將在下一次財報電話會議上提供更多資訊。

All right. And then given your cash position, I was hoping that you could just broadly speak to your cash deployment plans?

好的。然後考慮到您的現金狀況，我希望您能大致談談您的現金部署計劃？

Yes. So for cash deployment, as you may have saw earlier this week, we instigated our $2 per year dividend. That will be paid quarterly. The first quarterly payment will start here in November. And with regards to share repurchase, it's something that, historically, we've been opportunistic about. We don't have a program in place today, but the Board is always looking at ways of returning cash to shareholders and it's something they'll continue to evaluate.

是的。因此，對於現金部署，正如您本週早些時候可能已經看到的那樣，我們發起了每年 2 美元的股息。這將按季度支付。第一季付款將於 11 月開始。關於股票回購，從歷史上看，我們一直是機會主義的。我們今天還沒有製定計劃，但董事會一直在尋找向股東返還現金的方法，他們將繼續評估這一點。

(Operator Instructions)

（操作員說明）

Okay. I think -- Wallace?

好的。我想——華萊士？

All right. Very happy to talk to you guys, have been 1.5 year. Thank you, everyone, for joining us today and for your continued interest in Silicon Motion. We will be attending several investor conferences over the next few months. The schedule of this event will be posted on our Investor Relationship section of our corporate website.

好的。很高興和大家聊天，已經1.5年了。感謝大家今天加入我們，並感謝大家對慧榮科技的持續關注。我們將在接下來的幾個月內參加幾次投資者會議。本次活動的日程安排將發佈在我們公司網站的投資者關係部分。

Thank you, everyone, for joining us today. Goodbye for now.

謝謝大家今天加入我們。暫時再見了。

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

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。