Silicon Motion Technology (SIMO) J.P. Morgan 54th Annual Global Technology, Media and Communications Conference summary

Business evolution and growth drivers

• Expanded from core eMMC and UFS for smartphones to edge computing SSD controllers, enterprise boot drives, and automotive FerriSSD, with all segments scaling meaningfully since 2023.

• Significant share gains in SSD controllers, with enterprise boot drives and automotive solutions ramping through 2027 and beyond.

• Strong relationships with all seven NAND makers enable supply leverage and market share gains across product lines.

• Diversified customer base across global car makers, CSPs, and server OEMs, reducing reliance on any single segment.

• Long-term growth outlook supported by new opportunities in enterprise, automotive, and IoT markets.

Market environment and supply dynamics

• AI-driven demand is expected to keep DRAM and NAND in shortage through 2027, with improvement only likely in 2028.

• NAND supply tightness and rising prices are impacting value-line smartphones and PCs, with a projected 10%-15% decline in smartphone shipments in 2026.

• Outsourcing by NAND makers and exits from mobile segments are fueling market share gains, especially in China.

• IoT and AIoT devices are driving strong eMMC shipments, expected to exceed 400 million units in 2026.

Product and technology roadmap

• Boot drive solutions are scaling with major GPU and cloud customers, with unique DRAM-less designs and strong security features.

• Expectation of 40%-45% margins for boot drives over the next 2-3 years, with meaningful revenue contribution.

• MonTitan SSD controllers are positioned for both warm and compute storage, with new opportunities in CMX and KV cache architectures.

• PCIe Gen 6 controllers will sample in Q4 2026 and enter production in late 2027-2028, with Gen 7 development underway.

• QLC NAND adoption is expected to become mainstream from 2028, with TLC dominating in the near term.