Ashraf Eassa
Long/short equity, contrarian, independent research, tech

Silicon Motion's New Controller Significantly Bolsters Core Growth Thesis

Silicon Motion (NASDAQ:SIMO) is a name that, admittedly, has been frustrating. While the shares have perked up from their recent $9.90 lows, they are still down roughly 33% from when I first wrote about the name almost one year ago. The shares have been weighed down largely by uncertainty surrounding the company's LTE transceiver business, which is highly dependent on Samsung (OTC:SSNLF) transitioning to an in-house LTE-Advanced basebannd. My core thesis hinges around the fact that once Silicon Motion begins to recognize material revenue from LTE, sentiment will turn (driving a richer multiple) and estimates will go up.

However, while the LTE story is intriguing, a much less talked about opportunity is the SATA SSD...

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