Silicon Motion Technology (SIMO) Piper Sandler 5th Annual Growth Frontiers Conference summary

Market position and business transformation

• Holds leading market share in NAND flash controllers for PCs (40%) and mobile (20-25%), excluding Apple.

• Underwent a major shift in the past year toward enterprise-class controllers and full SSD solutions, expanding into automotive and AI infrastructure markets.

• Boot drive business now represents a significant new opportunity, with major GPU and telecom customers ramping up through 2025-2027.

• Secured supply agreements with four of six major NAND makers, ensuring supply through at least Q1 2027.

• Automotive segment has grown from less than 5% to 15% of revenue in the past year.

Industry dynamics and competitive landscape

• Major NAND makers are exiting mobile, PC, and boot drive markets to focus on higher-margin HBM and DRAM, leaving opportunities for controller specialists.

• NAND prices have risen sharply due to 80% YoY demand growth versus 20% supply growth; prices are expected to remain elevated through 2027.

• New NAND fabs from Samsung and Micron may moderate price increases after 2028 but won't significantly alter supply-demand balance.

• HDDs are sold out for two years, driving enterprise and AI customers toward NAND flash solutions despite high prices.

Product and customer developments

• Boot drive attach rates are set to rise from 20-30% to 100% with the transition from Blackwell to Rubin platforms at the largest GPU maker.

• MonTitan enterprise SSD platform has secured seven tier-one customers, with five new CSPs ramping in the second half of the year.

• MonTitan is positioned for KV cache and compute drive applications in AI data centers, with design wins for 16TB NAND flash drives.

• QLC NAND adoption is key for MonTitan, enabling cost-effective, high-capacity storage for large language models and AI workloads.

• Customization needs in enterprise storage favor partnerships with NAND makers, leveraging engineering resources for tailored solutions.