Silicon Motion (SIMO) Benefiting From Accelerating Transition Toward SSD Solutions - Needham & Company

Needham & Company analyst Rajvindra Gill reiterated a Buy rating and $60 price target on Silicon Motion Technology (NASDAQ: SIMO) after CFO, Rayadh Lai, enthusiastically spoke to a packed room at today's Needham & Company Growth Conference.

Gill commented, "Rayadh Lai, CFO, enthusiastically spoke to a packed room. SIMO highlighted its expertise in Controller ICs managing NAND devices. With the decrease in NAND prices over the next few years, SIMO benefits from the expansion of applications, which will use NAND. Currently, SIMO’s Client SSDs Controllers are growing 20-25% y/y and benefiting from accelerating HDD displacement. SIMO highlighted the expanding value-added role of Controller ICs through two main areas: Customers demand better, cheaper storage devices and as NAND becomes cheaper through geometry shrink and quality issues ensue, SIMO can maximize value through efficient, error free controllers. SIMO also highlighted the strength in demand for Hyper scale data applications, namely its Shannon SSDs for Alibaba’s datacenters. We believe that the tightness in the NAND market will be alleviated by the end of 2Q17, as more NAND capacity is introduced to the market, particularly with Sk Hynix, and through next-generation (60/70 bit layers) 3D NAND ramping over the next few periods. It is important to note that SIMO’s controllers are insulated from NAND’s declining ASPs. Net, we believe SIMO is benefiting nicely from the accelerating transition toward SSD solutions, and we reiterate our Buy rating with a $60 price target."

For an analyst ratings summary and ratings history on Silicon Motion Technology click here. For more ratings news on Silicon Motion Technology click here.

Shares of Silicon Motion Technology closed at $44.16 yesterday.

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