Financial Highlights

 -- Net sales increased 14% quarter-over-quarter to US$23.1 million
 -- Gross margin excluding stock-based compensation was unchanged
    at 48.5% compared with our 2Q09 gross margin
 -- Operating expenses excluding stock-based compensation,
    acquisition-related charges, and one-time items increased from
    2Q09 of US$11.2 million to US$12.0 million in the third quarter
 -- Net income excluding stock-based compensation, acquisition-
    related charges, foreign exchange gain, and one-time items
    decreased to US$0.8 million from US$1.0 million in 2Q09. GAAP
    net loss decreased to US$4.7 million from a loss of US$6.2
    million in 2Q09
 -- Diluted earnings per ADS excluding stock-based compensation,
    acquisition-related charges, foreign exchange gain (loss), and
    one-time items were US$0.02, a decrease from our 2Q09 earnings
    per ADS of US$0.03.  GAAP diluted loss per ADS was US$0.16

Business Highlights

 -- Increased total unit shipments 24% sequentially but decreased
    37% year-over-year to approximately 67 million units
 -- Increased storage controller unit shipments 21% sequentially
    but decreased 39% year-over-year
 -- Launched controllers that support SanDisk/Toshiba 43nm and 32nm
    3-bits per cell MLC flash, SanDisk/Toshiba 32nm 2-bits per cell
    MLC flash and Samsung 42nm and 32nm 3-bits per cell MLC flash
 -- Designed in at two major card vendors for their ultra high
    performance 133x Secure Digital (SD) cards
 -- Began shipping world's fastest 600x Compact Flash (CF) card
    controller, which enables 90MB per second data rate
 -- Began shipping our ISDB-T SoC solution to Samsung for the
    emerging Brazil mobile TV market
 -- Received two additional CDMA transceiver design-ins for the
    rapidly growing China market

TAIPEI, Taiwan, Oct. 30, 2009 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation (Nasdaq:SIMO) (the "Company") today announced its third quarter 2009 financial results. For the third quarter of 2009, net sales increased 14% quarter-over-quarter to US$23.1 million. Net loss (GAAP) for the third quarter decreased to US$4.7 million or US$0.16 per diluted ADS compared to a GAAP net loss of US$6.2 million or US$0.22 per diluted ADS in the second quarter.

Net income excluding stock-based compensation, acquisition-related charges, foreign exchange gain, and one-time items decreased in the third quarter to US$0.8 million or US$0.02 per diluted ADS as compared to US$1.0 million or US$0.03 per diluted ADS in the second quarter of 2009.

Third Quarter 2009 Financial Review (1)

Commenting on the results of the third quarter, Silicon Motion's President and CEO, Wallace Kou, said:

        "After many challenging quarters, we have finally delivered
    revenue growth.  Our markets remained challenging but we grew
    our mobile storage controller volume 21% and our overall
    revenue 14% sequentially.  As we had expected, NAND flash
    industry component volume started growing again this quarter as
    a result of higher NAND flash industry utilization rates and
    progress in migrating geometry to 40nm and 30nm.  Our retail
    and bundled businesses have both improved with the increased
    availability of flash.  However, we do not believe we are out
    of the woods yet.  NAND flash prices increased further in
    October and these high costs are being passed down to consumers
    in the form of higher retail prices for storage devices-and
    this in turn affects the momentum of our recovery.

        Nevertheless, we believe that we continue to be well
    positioned with the technological changes taking place in the
    dynamic NAND flash industry.  We have launched new controllers
    that support low cost 3-bits per cell MLC that Toshiba, SanDisk,
    and others are beginning to release to market.  We believe that
    3-bits per cell MLC, supported by advanced controller
    technologies, is well suited for meeting the cost and
    performance requirements of consumer storage applications and
    could in a few years time become the mainstream type of flash
    for the consumer market.  In addition to the release of our new
    3-bits per cell MLC controllers, we have also launched other
    new controllers: controllers that support 30nm NAND flash
    produced by vendors in addition to IM Flash, controllers that
    manage lower grade NAND flash, and controllers for card makers
    that want superior performance.

        This quarter, our mobile communications business started
    shipping our ISDB-T SoCs to Samsung for the Brazil market, a
    design-in that we had announced last quarter.  We also secured
    two CDMA transceiver design-ins with leading handset OEMs for
    the rapidly growing China market.  These two design-ins, as
    well as the CDMA design-in that we had previously announced,
    should start shipping in the fourth quarter to early 2010 time
    frame.  We believe that these new design-ins will serve as a
    strong base for long-term growth in our mobile communications
    business."

(1) Unless otherwise stated, all financial information used in this press release is unaudited, consolidated, prepared in accordance with US GAAP and denominated in New Taiwan dollars. US dollar amounts are translated for convenience only. Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by independent auditors, to which we subject our audited consolidated financial statements, and may vary materially from the audited consolidated financial information for the same period. Any evaluation of the financial information presented in this press release should also take into account our published audited consolidated financial statements and the notes to those statements. In addition, the financial information presented is not necessarily indicative of our results for any future period.

Sales

Net sales in the third quarter were US$23.1 million, an increase of 14% compared with the previous quarter. This quarter, mobile storage products accounted for 60% of net sales, mobile communications 27% of net sales, and multimedia SoCs 13% of net sales.

Net sales of mobile storage products, which include flash memory card controllers, USB flash drive controllers, card reader controllers, SSD controllers, and embedded flash controllers, increased 27% from the second quarter of 2009 to US$14.0 million this quarter.

Net sales of mobile communication products, which include mobile TV IC solutions, CDMA RF ICs, and electronic toll collection (ETC) RF ICs, decreased 8% from the second quarter of 2009 to US$6.2 million in the third quarter.

Net sales of multimedia SoC products, which include embedded graphics processors, PMP and DAB SoCs, and PC camera SoCs, increased 18% from the second quarter of 2009 to US$2.9 million this quarter.

Gross and Operating Margins

Gross margin excluding stock-based compensation was flat at 48.5% compared with the second quarter. GAAP gross margin increased slightly to 48.1% from 48.0% in the second quarter.

Operating expenses excluding stock-based compensation, acquisition-related charges, and one-time items were US$12.0 million, which were higher than the US$11.2 million reported for the second quarter. Research and development expenditures, excluding stock-based compensation, were US$7.3 million, which were higher than the US$6.8 million in the previous quarter. Selling and marketing expenses excluding stock-based compensation were US$2.4 million, which were unchanged from the previous quarter. General and administrative expenses excluding stock-based compensation and litigation expenses were US$2.2 million, a slight increase from the US$2.1 million reported in the previous quarter. Stock-based compensation was US$2.2 million in the third quarter, which was unchanged from the second quarter. Acquisition-related charges were US$1.5 million, which were also unchanged compared with the previous quarter. Litigation expenses were less than US$0.1 million in the third quarter, similar to the previous quarter.

Operating margin excluding stock-based compensation, acquisition-related charges, and one-time items was a negative 3.2%, an improvement from negative 6.7% in the previous quarter. GAAP operating margin also improved to a negative 19.3% compared with the negative 24.7% reported for the second quarter.

Other Income and Expenses

Net total other income excluding net foreign exchange gain or loss, and one-time items was US$0.1 million, which was unchanged from the previous quarter. GAAP net total other income was a loss of US$1.6 million, which was significantly lower than the loss of US$3.4 million in the previous quarter due primarily to lower foreign exchange loss in the third quarter.

Earnings

Net income excluding stock-based compensation, acquisition-related charges, net foreign exchange loss, and one-time items was US$0.8 million in this quarter, a decrease from US$1.0 million in the second quarter. The third quarter was positively impacted by a deferred tax benefit of US$1.4 million. Diluted earnings per ADS excluding stock-based compensation, acquisition-related charges, net foreign exchange gain (loss), and one-time items were US$0.02, a decrease from earnings per ADS of US$0.03 in the previous quarter.

GAAP net loss was US$4.7 million, which was an improvement from the net loss of US$6.2 million in the previous quarter. Diluted GAAP loss per ADS was US$0.16, an improvement compared to the loss per ADS of US$0.22 in the previous quarter.

Balance Sheet

Cash, cash equivalents, and short-term investments decreased slightly from US$60.7 million at the end of the second quarter of 2009 to US$60.6 million at the end of this quarter.

Cash Flow

Our cash flows were as follows:

                 3 months ended September 30, 2009
                 ---------------------------------

                                                     (In US$ millions)

 Net income (loss)                                               (4.7)
 Depreciation & amortization                                      2.7
 Changes in operating assets and liabilities                     (2.1)
 Others                                                           1.3
                                                                -----
   Net cash provided by (used in) operating activities           (2.8)
                                                                =====
 Acquisition of property and equipment                           (0.5)
 Others                                                           1.1
                                                                -----
   Net cash provided by (used in) investing activities            0.6
                                                                =====
 Others                                                            --
                                                                -----
   Net cash provided by (used in) financing activities             --
                                                                =====
 Effects of changes in foreign currency exchange rates on cash    1.5
                                                                -----

   Net decrease in cash and cash equivalents                     (0.7)
                                                                =====
 Pro-forma adjustment for foreign exchange translation            1.0
                                                                -----
   Pro-forma net increase in cash and cash equivalents            0.3
                                                                =====

During the third quarter of 2009, we spent US$0.5 million in capital expenditures primarily relating to the purchase of software and equipment. There were no shares repurchased in the third quarter.

Business Outlook:

Silicon Motion's President and CEO, Wallace Kou, added:

    "While our business has improved, we remain vigilant against
    unexpected changes in light of continued NAND flash volatility.
    NAND flash prices have risen in October and this will affect
    the near-term procurement of flash and controllers by our
    customers.  We are uncertain whether NAND flash prices will
    remain at these level, rise further or fall.  We do, however,
    believe that progress on the ramp of 30nm and 40nm flash, 3-
    bits per cell MLC, and lower grade flash will continue and
    demand for higher performance memory cards and other solid
    state storage device will increase.