Silicon Motion closes $1.15B convertible notes offering at 0% interest

Silicon Motion Technology Corporation (NASDAQ: SIMO) announced the closing of a $1.15 billion offering of 0.00% Convertible Senior Notes due 2031, including the full exercise of an option for an additional $150 million in notes by initial purchasers.

The notes were issued in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The offering was upsized from an initial target of $800 million.

The notes will mature on August 15, 2031, unless earlier repurchased, redeemed, or converted. The initial conversion price is approximately $380.50 per American depositary share (ADS), representing a premium of approximately 65% over the last reported sale price of $230.61 per ADS on the Nasdaq Global Select Market on August 10, 2026.

Net proceeds from the issuance totaled $1.127 billion after deducting initial purchasers' discounts, but before estimated offering expenses. Silicon Motion said it intends to use the proceeds for general corporate purposes and to repay amounts outstanding under its existing credit agreement.

Silicon Motion will settle each conversion by paying the principal amount in cash, with any conversion value exceeding the principal amount settled in cash, ADSs, or a combination, at the company's election.

"This transaction significantly strengthens the Company's balance sheet and furnishes the capital required we expect to accelerate growth in our rapidly expanding Enterprise Boot Drive Storage and Ferri for Automotive and Physical AI solutions businesses," said Wallace Kou, Silicon Motion's President and Chief Executive Officer.

Kou added that the company's solutions products collectively represent nearly 30% of revenue in the second quarter, compared with less than 5% one year ago.

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