Core Viewpoint - Silicon Motion Technology Corporation (NASDAQ: SIMO) is identified as a well-managed and profitable company that is currently trading at a discount, suggesting that the market may be underestimating its potential in the semiconductor sector [1]. Company Analysis - The semiconductor landscape is currently challenging, yet Silicon Motion is positioned favorably due to its strong fundamentals and growth potential [1]. - The company is noted for its effective management and profitability, which are critical factors for long-term investment considerations [1]. Market Context - The current hype surrounding semiconductor companies may not accurately reflect the underlying value of Silicon Motion, indicating a potential investment opportunity [1]. - The article emphasizes the importance of combining financial data with qualitative analysis to evaluate companies within the technology sector, particularly in the context of long-term investing [1].

Group 1 - The core viewpoint of the article is that PCIe 6.0 x4 SSDs for PCs will not be available until 2030, with current interest from PC OEMs being minimal [1] - Silicon Motion's CEO, Wallace C. Kuo, stated that both AMD and Intel are not planning to implement PCIe 6.0 solutions in the short term [1] - The complexity of implementing PCIe 6.0 and the lack of interoperability testing by PCI-SIG are significant barriers to adoption in the client PC market [1][2] Group 2 - As data rates increase with PCIe, signal loss, noise, and impedance will reduce the allowable copper wire length between the root complex and endpoints [2] - At 64 GT/s (PCIe 6.0), the maximum wire length is reduced to 3.4 inches, which may not be sufficient for high-performance graphics cards in consumer PCs [2] - The data center market may utilize PCIe 6.0 retimers to address these issues, but the costs are too high for consumer-grade PCs [2]

Summary of Silicon Motion Technology Corporation (SIMO) Conference Call Company Overview - **Company**: Silicon Motion Technology Corporation (SIMO) - **Industry**: Memory chip industry, specifically focusing on NAND flash memory Key Points Long-Term Growth Catalysts - NAND flash memory is critical for various applications, including smartphones, PCs, enterprise, automotive, and industrial sectors, leading to increased memory demand and performance requirements [2][3] - The expansion and improvement of NAND memory generations create opportunities for SIMO to deliver solutions that enhance performance and density, thus expanding Total Addressable Market (TAM) and Serviceable Available Market (SAM) [3] Near-Term Outlook - Despite geopolitical uncertainties and tariffs, SIMO expects growth in the second quarter due to new projects ramping up, including PCIe 5 for client SSDs [4][5] - Customer conversations indicate that the demand in the second quarter is genuine and not merely a pull-in demand [6] Market Share and Competitive Position - SIMO has seen a significant increase in market share for client SSDs, growing from over 25% to over 30% last year, with a target of achieving over 40% in the coming years [9][10] - The company is positioned to capture over 50% market share in the high-end PCIe 5 controller segment, which has historically been dominated by flash makers developing in-house solutions [10][11] Business Model and Outsourcing Trends - The increasing complexity and cost of developing new controllers have led flash makers to outsource their controller needs, presenting an opportunity for SIMO to gain market share [17][18] - SIMO is the only merchant supplier that collaborates with all flash makers, allowing it to capture a disproportionate share of the market [18][21] Automotive Sector Growth - The automotive sector currently accounts for over 5% of SIMO's revenue, with expectations to exceed 10% in the next few years due to the increasing number of memory components required in vehicles [31][32] - SIMO is engaged with various automotive manufacturers, providing solutions for infotainment, ADAS, and other memory-intensive applications [33][34] Data Center and AI Opportunities - SIMO is providing boot drives for NVIDIA's BlueField 3 GPUs, which is expected to open up further opportunities in the enterprise SSD market [36][37] - The Montitan enterprise SSD, supporting high densities, is anticipated to contribute 5% to 10% of total revenue by 2026-2027 [37][45] Macro and Industry Uncertainties - The company has not observed significant impacts from U.S. tariffs, with overall expectations for PC and smartphone growth remaining stable [46][49] - Inventory levels are reported to be normal, reflecting end market demand [49] Shareholder Returns and Capital Allocation - SIMO has consistently prioritized dividends, increasing from $0.60 to $2 per ADS over the past decade, and has allocated approximately half of its free cash flow to share repurchases [55][56] - The company is also exploring M&A opportunities to enhance its technology offerings [57] R&D and Talent Acquisition - SIMO has been increasing its headcount to drive development in new technologies, including six-nanometer solutions for PCIe 5 and UFS 4 [60] Legal Matters - Ongoing arbitration in Singapore is expected to convene in October, with a resolution anticipated by the end of the year [50][52] Conclusion - SIMO is well-positioned for growth in the memory chip industry, with strong market share gains, a robust pipeline of projects, and strategic focus on high-growth sectors such as automotive and data centers. The company remains vigilant in managing macroeconomic uncertainties while continuing to prioritize shareholder returns and innovation.

Core Insights - Silicon Motion Technology Corporation (SIMO) is set to showcase its next generation product suite, including two new SSD controllers, SM2504XT and SM2324, at Computex 2025, highlighting its leadership in high-performance SSD solutions for various applications [1][6] Group 1: Product Innovations - The SM2504XT is a PCIe Gen5 DRAM-less controller built on a 6nm process, achieving sequential read speeds of up to 11.5 GB/s and write speeds of 11.0 GB/s, with random read IOPS of 1.7 million and write IOPS of 2.0 million, while maintaining power consumption under 5W [2][3] - The SM2504XT offers an 11% improvement in performance per watt over its predecessor, setting a new efficiency benchmark for PCIe Gen5 SSDs [2] - The SM2324 is the world's first true single-chip portable SSD controller with native USB4 support, capable of read and write speeds of up to 4,000MB/s and supporting storage capacities of up to 32 TB [4] Group 2: Market Applications - Silicon Motion's controller technologies target a wide range of markets, including automotive systems, AI-powered smartphones, datacenter/enterprise SSDs, and high-performance display interfaces, supporting AI-driven applications [5] - The innovations are expected to generate incremental demand for Silicon Motion's solutions, leading to higher revenues and improved financial performance [7] Group 3: Stock Performance - Shares of Silicon Motion have declined by 21% over the past year, compared to the industry's decline of 3.7% [8]

Core Insights - Silicon Motion Technology Corporation announced the launch of two new SSD controllers at COMPUTEX 2025, emphasizing its leadership in energy-efficient and high-performance SSD solutions for various applications [1][5]. Product Highlights - The SM2504XT is an ultra-low power PCIe Gen5 DRAM-less controller that delivers up to 11.5 GB/s sequential read and 11.0 GB/s write speeds, achieving an 11% improvement in performance per watt compared to the previous generation [2][3]. - The SM2324 is the first single-chip portable SSD controller with native USB4 support and built-in Power Delivery, offering sequential read/write speeds of up to 4,000MB/s and supporting storage capacities of up to 32TB [4]. Market Positioning - Silicon Motion's products are designed for AI PCs, gaming systems, and portable devices, targeting the growing demand for cost-effective and energy-efficient SSD solutions [3][5]. - The company also plans to showcase a wide range of controller solutions for markets including automotive, AI smartphones, datacenter/enterprise SSDs, and high-performance display interfaces at COMPUTEX 2025 [5]. Company Overview - Silicon Motion is recognized as the global leader in supplying NAND flash controllers for solid-state storage devices, serving a diverse customer base that includes major NAND flash vendors and leading OEMs [6].

Silicon Motion Technology Corporation (SIMO) FY Conference May 14, 2025 08:00 AM ET Speaker0 Morning, and, welcome to the second day of the JPMorgan, Global TMC Conference. I'm Gokul Hariharan, senior tech analyst at JPMorgan. I'm happy to host Silicon Motion here, President and CEO, Wallace Kho and CFO, Jason Tsai. Thanks very much for being here. Maybe Wallace, to set the stage, I think there was a period where you were grappling with the MaxLinear acquisition, and you have been kind of accelerated your R ...

Group 1 - Silicon Motion Technology Corporation is a global leader in designing and marketing NAND flash controllers for solid state storage devices [1][2] - The company will participate in several upcoming conferences, including the J.P. Morgan 53rd Annual Global Technology, Media and Communications Conference on May 14, 2025, and the Bank of America Securities 2025 Global Technology Conference on June 3, 2025 [1] - Silicon Motion supplies more SSD controllers than any other company globally for servers, PCs, and other client devices, and is the leading merchant supplier of eMMC and UFS embedded storage controllers used in smartphones and IoT devices [2] Group 2 - The company also provides customized high-performance solutions for hyperscale data centers and specialized industrial and automotive SSD applications [2] - Silicon Motion's customer base includes most NAND flash vendors, storage device module makers, and leading OEMs [2] - Interested parties can access live audio webcasts of the company's presentations on its Investor Relations website, with replays available for 90 days [1]

Group 1 - The core viewpoint of the news highlights the financial performance and market position of Silicon Motion Technology Corporation (SIMO), noting a stock price increase and a recent upgrade in target price by B. Riley FBR [1][3] - As of March 31, 2025, Silicon Motion reported total revenue of $166 million, a year-over-year decrease of 12.05%, while net profit attributable to shareholders was $19.46 million, reflecting a year-over-year increase of 21.52% [1] - The company is recognized as a global leader in NAND Flash controller chips, with over 20 years of design and development experience, providing high-performance storage solutions for SSDs and other solid-state storage devices [2] Group 2 - Silicon Motion has shipped over 5 billion NAND Flash controller chips in the past decade, leading the industry in cumulative shipments [2] - The company's controller chips are compatible with a wide range of flash memory products from major manufacturers, including Intel, Micron, Samsung, SK Hynix, Toshiba, and Western Digital, supporting various 3D TLC and QLC products [2] - Silicon Motion's customer base includes all major NAND Flash manufacturers, storage module manufacturers, large data centers, and other OEMs globally [2]

Core Viewpoint - Simplo Technology (SIMO) is experiencing fluctuations in stock price and financial performance, with a recent downgrade in target price by Needham while maintaining a buy rating [1][2]. Financial Performance - As of March 31, 2025, Simplo Technology reported total revenue of $166 million, a year-over-year decrease of 12.05% [1]. - The net profit attributable to the parent company was $19.463 million, reflecting a year-over-year increase of 21.52% [1]. Company Overview - Simplo Technology is a global leader in NAND Flash controller chips, with over 20 years of design and development experience [2]. - The company provides high-performance storage solutions for SSDs and other solid-state storage devices, applicable in smartphones, personal computers, data centers, and industrial applications [2]. - Simplo has shipped over 5 billion NAND Flash controller chips in the past decade, leading the industry in cumulative shipments [2]. - The company's controller chips are compatible with various flash memory products from major manufacturers, including Intel, Micron, Samsung, SK Hynix, Toshiba, and Western Digital [2].

[Company Information](index=27&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) [Business Overview](index=27&type=section&id=Introduction) Silicon Motion leads globally in NAND flash controllers for SSDs, offering high-performance storage solutions for diverse applications under brands like "SiliconMotion" and "MonTitan" - The company is a **global leader** in NAND flash controllers for SSDs and other solid-state storage devices, with over **20 years of experience**[126](index=126&type=chunk) - Over the last ten years, the company has shipped more than **six billion NAND flash controllers**, supporting components from all major NAND producers[126](index=126&type=chunk) - Key product brands include **"SiliconMotion"** for PC controllers, **"FerriSSD"** for specialized storage, and **"MonTitan"** for enterprise SSD controllers[127](index=127&type=chunk) [Products and Revenue Mix](index=28&type=section&id=Our%20Market%20and%20Products) NAND flash controllers and SSD solutions are primary products, with 2024 net sales dominated by SSD controllers (50-55%) and significant revenue (98%) from outside the US, primarily China, Singapore, and Korea Net Sales Breakdown by Product Category (2022-2024) | Product Category | 2022 Revenue % | 2023 Revenue % | 2024 Revenue % | | :--- | :--- | :--- | :--- | | SSD Controllers | 45% - 50% | 55% - 60% | 50% - 55% | | eMMC & UFS Controllers | 35% - 40% | 25% - 30% | 35% - 40% | | SSD Solutions | 5% - 10% | 5% - 10% | 5% - 10% | - In 2024, **98% of revenue** originated from sales outside the United States, with China, Singapore, and Korea collectively contributing **68%** of total revenue[134](index=134&type=chunk) - The company offers a broad range of controllers for **computing-grade SSDs**, **enterprise-grade SSDs**, **eMMC/UFS mobile storage**, and **specialized industrial/automotive SSDs**[135](index=135&type=chunk)[138](index=138&type=chunk) [Customers and Sales Channels](index=29&type=section&id=Our%20Customers) Silicon Motion sells to a concentrated customer base, with the top five accounting for 66% of 2024 net revenue, primarily through a direct sales force (65%) - Sales to the **five largest customers** constituted approximately **67% in 2022**, **61% in 2023**, and **66% in 2024** of net revenue[139](index=139&type=chunk) - In 2024, **Micron, Kioxia, PHISEMI, and AFASTOR** each exceeded **10% of net revenue**, collectively representing **57%** of total net revenue[139](index=139&type=chunk) - In 2024, approximately **65% of sales** were generated by the direct sales force, with the remainder from distributors[141](index=141&type=chunk) [Research & Development (R&D)](index=30&type=section&id=Research%20and%20Development) R&D focuses on NAND flash controller solutions from centers in Taiwan and China, with expenses rising to $217.8 million in 2024, supported by 3,087 patents and 1,100 pending applications R&D Expenses (2022-2024) | Year | R&D Expense (US$ Millions) | | :--- | :--- | | 2022 | 188.5 | | 2023 | 174.4 | | 2024 | 217.8 | - As of April 1, 2025, the company holds **3,087 patents** and has **1,100 pending applications** worldwide[148](index=148&type=chunk) - Primary R&D centers are located in **Hsinchu and Taipei, Taiwan**, and **Shanghai, China**[147](index=147&type=chunk) [Manufacturing and Quality Assurance](index=30&type=section&id=Manufacturing) Silicon Motion operates a fabless model, outsourcing manufacturing to primary foundries like TSMC and SMIC, and assembly/testing to subcontractors such as SPIL, PTI, and KYEC - The company employs a **fabless business model**, outsourcing manufacturing to independent foundries and subcontractors[149](index=149&type=chunk) - Primary wafer fabrication partners include **Taiwan Semiconductor Manufacturing Company (TSMC)** and **Semiconductor Manufacturing International Corporation (SMIC)**[150](index=150&type=chunk) - Key assembly and testing subcontractors include **Siliconware Precision Industries Ltd. (SPIL)**, **Powertech Technology Inc. (PTI)**, and **King Yuan Electronics Corp. (KYEC)**[152](index=152&type=chunk) [Legal Matters: MaxLinear Merger Termination](index=27&type=section&id=Termination%20of%20the%20Merger%20Agreement%20with%20MaxLinear) MaxLinear unilaterally terminated the merger agreement in July 2023, prompting Silicon Motion to initiate arbitration in Singapore seeking a **$160 million termination fee** and additional damages for alleged willful breach - On July 26, 2023, MaxLinear purported to terminate the Merger Agreement shortly after receiving antitrust approval from China's SAMR[131](index=131&type=chunk) - Silicon Motion considers MaxLinear's action a **willful and material breach**, filing a claim with the Singapore International Arbitration Centre (SIAC)[131](index=131&type=chunk) - The company is seeking a **$160 million termination fee**, along with further substantial damages, interest, and costs[131](index=131&type=chunk) [Key Information and Risk Factors](index=5&type=section&id=Item%203.%20KEY%20INFORMATION) [Risk Factors](index=5&type=section&id=D.%20Risk%20Factors) The company faces significant risks including semiconductor industry cyclicality, customer concentration, rapid technological change, reliance on third-party foundries, geopolitical tensions in Taiwan/China, intellectual property issues, and cybersecurity threats - The business is subject to the **cyclical nature of the semiconductor industry**, characterized by rapid technological change, price erosion, and supply/demand fluctuations[23](index=23&type=chunk)[30](index=30&type=chunk) - A significant portion of revenue derives from a **few large customers**, with the top five accounting for **66% of net revenue in 2024**; their loss could materially affect financial results[25](index=25&type=chunk)[53](index=53&type=chunk) - The company faces substantial risks from its significant operations in **Taiwan and China** due to tense geopolitical relations, as most employees, R&D, and manufacturing partners are located in this region[25](index=25&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - Reliance on independent foundries like **TSMC and SMIC** for manufacturing poses risks related to capacity, quality, cost, and delivery schedules[25](index=25&type=chunk)[70](index=70&type=chunk) - The company is exposed to risks from potential failure to protect its **intellectual property**, intellectual property lawsuits, and **cybersecurity threats**[25](index=25&type=chunk)[76](index=76&type=chunk)[86](index=86&type=chunk) [Operating and Financial Review](index=33&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) [Financial Performance Summary (2024)](index=34&type=section&id=Summary%20of%20Consolidated%20Financial%20Results) In 2024, Silicon Motion achieved strong financial recovery with total revenue increasing **26% to $803.6 million**, gross margin improving to **45.9%**, operating profit surging **128% to $90.9 million**, and diluted earnings per ADS growing **67.7% to $2.65** Key Financial Highlights (2024 vs. 2023) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $803.6 million | $639.1 million | +26.0% | | Gross Margin | 45.9% | 42.3% | +3.6 p.p. | | Operating Profit | $90.9 million | $39.9 million | +128% | | Diluted Earnings per ADS | $2.65 | $1.58 | +67.7% | [Results of Operations (2024 vs. 2023)](index=38&type=section&id=Results%20of%20Operations) Net sales grew **26%** in 2024, driven by increased SSD and eMMC/UFS controller sales, while gross margin improved to **46%**; R&D expenses rose **25% to $217.8 million**, and G&A increased **12%** due to legal fees - Net sales increased by **26% to $803.6 million** in 2024, primarily driven by a **65-70% increase** in eMMC/UFS controller sales and a **15-20% increase** in SSD controller sales[201](index=201&type=chunk) - Gross profit margin increased to **46% in 2024** from **42% in 2023**, attributed to new projects and efficient product scaling[204](index=204&type=chunk) - R&D expenses increased by **25% to $217.8 million** in 2024, mainly due to higher IC tape-out costs and investments in next-generation solutions[205](index=205&type=chunk) - General and administrative expenses rose **12% to $31.4 million**, primarily due to legal and advisory fees related to the terminated Merger Agreement arbitration[207](index=207&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, the company held **$276.1 million** in cash, with **$77.1 million** net cash from operations, while investing activities used **$44.1 million** and financing activities used **$67.3 million**, including dividends, with a new **$50 million** share repurchase program authorized - Cash and cash equivalents totaled **$276.1 million** as of December 31, 2024[213](index=213&type=chunk) Summary of Cash Flows (in US$ Millions) | Cash Flow Activity | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | 83.9 | 149.1 | 77.1 | | Net cash used in investing activities | (32.9) | (49.1) | (44.1) | | Net cash used in financing activities | (183.1) | (16.7) | (67.3) | - In 2024, the company paid **$67.3 million in dividends**, and a new share repurchase program of up to **$50 million** was authorized in February 2025[223](index=223&type=chunk)[225](index=225&type=chunk) - Material cash requirements include **$14.9 million** in total operating lease obligations and ongoing construction of office buildings in Hsinchu and Taipei[228](index=228&type=chunk)[229](index=229&type=chunk) [Critical Accounting Estimates](index=36&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates include inventory valuation, income taxes, and legal contingencies, with 2024 inventory write-downs of **$6.1 million** and unrecognized tax benefits of **$43.6 million** at year-end - Inventory is valued at the lower of cost or net realizable value, with obsolescence write-downs totaling **$15.8 million in 2022**, **$7.9 million in 2023**, and **$6.1 million in 2024**[192](index=192&type=chunk) - Accounting for income taxes requires significant estimates for deferred tax assets and liabilities, with a valuation allowance of **$27.8 million** for deferred tax assets as of December 31, 2024[195](index=195&type=chunk) - Unrecognized tax benefits totaled **$43.6 million** as of December 31, 2024, with no significant change expected in the next 12 months[196](index=196&type=chunk) [Directors, Management, and Employees](index=44&type=section&id=Item%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) [Directors and Senior Management](index=44&type=section&id=Directors%20and%20Senior%20Management) The company is led by Chairman James Chow and CEO Wallace C. Kou, with a nine-member board of directors overseeing audit, compensation, and nominating committees - The leadership team includes **James Chow** as Chairman of the Board and **Wallace C. Kou** as President, Chief Executive Officer, and Managing Director[234](index=234&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) - The board of directors comprises **nine members** and maintains an audit, compensation, and nominating and corporate governance committee[233](index=233&type=chunk)[250](index=250&type=chunk) [Compensation and Employees](index=48&type=section&id=Compensation%20of%20Directors%20and%20Senior%20Management) In 2024, aggregate compensation for directors and senior management was approximately **$3.73 million**, while total headcount grew to **1,819 employees**, with R&D personnel at **1,490**, primarily based in Taiwan - Aggregate compensation for directors and senior management members was approximately **US$3.73 million** for the year ended December 31, 2024[267](index=267&type=chunk) Employee Headcount by Function | Function | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | | Management and administration | 133 | 118 | 123 | | Operations | 46 | 42 | 38 | | R&D | 1,262 | 1,229 | 1,490 | | Sales and marketing | 202 | 157 | 168 | | **Total** | **1,643** | **1,546** | **1,819** | - As of December 31, 2024, the company had **1,819 employees**, with **1,560** located in Taiwan[280](index=280&type=chunk) [Corporate Governance and Controls](index=61&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) [Controls and Procedures](index=61&type=section&id=Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with Deloitte & Touche issuing an unqualified opinion on internal controls - Management concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2024[345](index=345&type=chunk) - Based on the COSO 2013 framework, management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2024[347](index=347&type=chunk) - Deloitte & Touche, the independent registered public accounting firm, issued an attestation report concurring with management's assessment of **effective internal control over financial reporting**[348](index=348&type=chunk)[351](index=351&type=chunk) [Cybersecurity](index=65&type=section&id=ITEM%2016K.%20CYBERSECURITY.) The company's cybersecurity risk management program, based on the NIST framework and overseen by the audit committee, identified no material threats to business, operations, or financial condition in 2024 - The cybersecurity risk management program is designed based on the **National Institute of Standards and Technology (NIST) framework**[372](index=372&type=chunk) - The board of directors delegates cybersecurity risk management oversight to the **audit committee**[375](index=375&type=chunk) - In 2024, the company identified **no cybersecurity threats** that materially affected or were reasonably likely to materially affect its business strategy, results of operations, or financial condition[374](index=374&type=chunk) [Financial Statements and Notes](index=69&type=section&id=Item%2018.%20FINANCIAL%20STATEMENTS) [Consolidated Financial Statements](index=72&type=section&id=Consolidated%20Financial%20Statements) As of December 31, 2024, consolidated financial statements show total assets of **$1.03 billion**, total liabilities of **$259.1 million**, total shareholders' equity of **$772.3 million**, with **$803.6 million** in net sales and **$89.2 million** in net income for the year Consolidated Balance Sheet Summary (as of Dec 31, 2024) | Metric | Amount (US$ Thousands) | | :--- | :--- | | Total current assets | 794,873 | | **Total assets** | **1,031,336** | | Total current liabilities | 199,504 | | **Total liabilities** | **259,052** | | **Total shareholders' equity** | **772,284** | Consolidated Income Statement Summary (Year ended Dec 31, 2024) | Metric | Amount (US$ Thousands) | | :--- | :--- | | Net Sales | 803,552 | | Gross Profit | 368,765 | | Operating Income | 90,889 | | **Net Income** | **89,249** | [Notes to Financial Statements](index=77&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes to financial statements detail customer concentration (57% from four customers in 2024), **$6.1 million** in 2024 inventory write-downs, ongoing office building construction in Taiwan, a **16.9% effective tax rate** with **$43.6 million** in unrecognized tax benefits, and significant legal proceedings - **Customer Concentration (Note 2 & 17):** In 2024, four customers (**Micron, Kioxia, PHISEMI, AFASTOR**) each accounted for more than **10% of net sales**, aggregating to **57% of total net sales**[420](index=420&type=chunk)[515](index=515&type=chunk) - **Inventory (Note 5):** The company recorded inventory write-downs of **$6.12 million** in 2024 for obsolete or unmarketable inventory[466](index=466&type=chunk) - **Office Building Construction (Note 7 & 16):** The company is constructing a headquarters in Hsinchu, expected completion June 2025, and another office in Taipei, targeted completion mid-2029[473](index=473&type=chunk)[503](index=503&type=chunk) - **Income Taxes (Note 12):** The effective tax rate was **16.9% in 2024**, with unrecognized tax benefits totaling **$43.6 million** at year-end[479](index=479&type=chunk)[487](index=487&type=chunk)