Good day, ladies and gentlemen and welcome to the Second Quarter Silicon Motion Technology Corporation Quarter Two, 2012 earnings conference call. My name is Maryanne and I will be your conference moderator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). Before we begin today’s conference, I have been asked to read the following forward-looking statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 as amended. Such forward-looking statements include, without limitation, statements regarding trends in the semiconductor industry and our future results of operations, financial condition and business prospects. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties and actual market trends and our results my different materially from those expressed or implied in these forward-looking statements for a variety of reasons. Potential risks and uncertainties include but are not limited to continued competitive pressure in the semiconductor industry and the effect of such pressure on prices, unpredictable changes in technology and consumer demand for multimedia consumer electronics, the state of, and any change in our relationship with our major customers and changes in political, economic, legal and social conditions in Taiwan. For additional discuss of these risk and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements which apply only as of the date of this press release. I would now like to hand the presentation over to our host, Mr. Jason Tsai, Director of IR and Strategy. Please proceed.

Thank you very much, and good morning, everyone and welcome to the Silicon Motion second quarter 2012 financial results conference call and webcast. My name is Jason Tsai. I’m the Director of IR and Strategy. With me here is Wallace Kou, our President and CEO and Riyadh Lai, our Chief Financial Officer. The agenda for today is as follows. Wallace will start with the review of some of our recent business developments. Riyadh will then discuss our second quarter financial results and provide our outlook. We’ll then conclude with Q&A. Before we get started, I’d like remind you of our Safe Harbor policy, which is read at the start of this call. For a comprehensive overview of the risks involved in investing in our securities, please refer to our filings with the U.S. SEC. For more details on our financial results, please refer to our press release, which is filed on Form 6-K after the close of market yesterday. This webcast will be available for replay on our website, www.siliconmotion.com for a limited time. To enhance investor’s understanding of our ongoing economic performance, we will discuss non-GAAP information during this call. We use non-GAAP financial measure internally to evaluate and manage our operations. We have therefore chosen to provide this information to enable you to perform comparisons of our operating results in a manner similar to how we analyze our own operating results. The reconciliation of GAAP to non-GAAP financial data can be found in our earnings release issued yesterday. We ask that you review it in conjunction with this call. With that, I would now like to turn the call over to Wallace.

Thank you, Jason, and thanks to everyone for joining us on this second quarter earnings call. I’m happy to report another strong quarter with revenue increasing by 9% sequentially to $69.7 million in the second quarter. While the overall market condition continues to be challenging, the strong realm of our new growth products were able to offset the three unfavorable market conditions relating to the sales of core products and contribute strongly to our second quarter growth. This quarter, we delivered $0.42 in diluted earnings per ADS, an increase of $0.29 diluted earnings per ADS a year ago. Riyadh will discuss our financial result in greater detail later on the call. In the second quarter, our new growth product grew by a strong 75% sequentially and accounted for 32% of our revenue in the second quarter compared to only 20% of our revenue in the previous quarter. The 32% [inaudible] of our revenue from new growth products is significantly more than our previous target of 25% by the end of 2012. For full-year 2012, we now anticipate our new growth products to account for 30 to 35% of our revenue and roughly 40 to 45% next year. For many years, we are being adopting new products that will enable us to deliver sustainable longer-term growth as the growth of our core products show sign of a deceleration. The market of our core products, current USB flash drive controllers, Mobile TV and the CDMA RF and graphic processes are not increasingly mature. The products that will drive our longer term growth are our new growth products, specifically our [inaudible] plus embedded and LT solutions. These new growth products leverage the underlying leading edge NAND flash controller technology and mobile transceiver technology that we have been developing for our core products. In…

Thank you all. First, I will outline our financial results for the second quarter and then I’ll provide our third quarter and full-year 2012 guidance. As Wallace has mentioned, we delivered $69.7 million in sales this quarter, a 9% increase compared to the prior quarter and a 38% increase compared to the second quarter 2011. In the second quarter, sales from our new growth products increased 75% sequentially. New growth products accounted for 32% of total sales, up from 20% of sales – of total sales in the prior quarter. I wanted to note that due to some internal product reclassifications, our revenue contribution from our new growth product in the first quarter is now 20% compared with the 18% we had previously announced. Let me recap the performance of our two key product lines. Mobile storage. Mobile storage revenue increased 10% sequentially and 49% year over year. Mobile storage controller shipments decreased 7% sequentially but increased 32% year over year. Mobile storage controller ASPs increased by 19% sequentially and 13% year over year; our 10th consecutive quarter of annual ASP increases. Our card controller revenue decreased by 18% sequentially and our USB controller revenue increased by 14% sequentially. Over 25% of our controller sales are for 19 to 21-nanometer NAND flash. As comparison, in the first quarter, controllers for 19 to 21-nanometer NAND flash was just beginning to ship and generated only nominal revenue the first quarter. TLC controller revenue in the second quarter increased 3% sequentially and continued to account for nearly 50% of our controller sales in the quarter. OEM revenue increased by 22% sequentially and accounted for over 50% of our controller sales in the second quarter. Moving to Mobile Communication. Mobile Communications revenue increased 4% sequentially and 22% year over year. Our LT product revenue…

(Operator instructions). And your first question comes from the line of Anthony Stoss – Craig-Hallum Capital. Anthony Stoss – Craig-Hallum Capital: Sorry, you talked about 11 OEM’s that you signed so far. Is there anything that’s preventing you Riyadh, you talked about scaling. Is there anything that’s holding you back in terms of scaling faster? Also, if you wouldn’t mind just talking about why you’re winning on the embedded controller side versus the competition? Thanks.

I think our eMMC solution is very cost performance competitive. And this (in turn) market of (inaudible) more competitive will help our (inaudible) to grow the market. Our REM Solution have already been designed to multiple projects at (inaudible) we mentioned, which included most (inaudible) and the menu of all key (inaudible) tablets. The reason why we can win more is because we are qualified with all major decision processor (inaudible) in going KorCon Media TI, and media attack, and (inaudible) events. And also as well as operating system like android, and Window A, OS (inaudible) in events. eMMC is a part of the (inaudible) solution, not a single stand-alone component. So the development is much more complicated than the cost until they are used (inaudible). : We have been successful winning eMMC projects in OEM with very fast pace, because our understanding of the system level requirement, combined with different type of interface, and application processor, operating system and other factors. And I think our relationship with flash maker will add tremendous value, because we had to work closely between the development side, including also the supporting side. That is why we can continue winning and getting eMMC (inaudible). Anthony Stoss – Craig-Hallum Capital: Okay, thanks.

And your next question comes from the line of Daniel Amir – Lazard Capital Markets. Daniel Amir – Lazard Capital Markets: Thanks a lot, and thank you for taking my call. Can you expand a little more about the SSD business? You know, where do see your opportunity going from here? Kind of what’s your CAM in terms of the opportunity there? And how should we look at that in the next couple of years, and then I have a couple other questions, thanks.

So Dan, we are partner with one of the large flash vendors providing us the controller for PC and (inaudible) I think (inaudible) but begin production of our 3G and then cash controller for an all in one PC, that is currently available in major retailers. The volumes are small. This is our first NAND cast controller (inaudible) and production. And our focus will be in cash based SSD controller to enhance PC (Buddha) performance. We do believe our revenue in this year will maintain small, however, because our (inaudible) are SSD development. We believe our SSD revenue will grow seasonally in the year 2013 based on own (inaudible) solution. Daniel Amir – Lazard Capital Markets: And then, you’ve talked about your solution eMMC and how successful you are there. How should we be looking at, you know, you commented a bit about your legacy (inaudible) business. There’s been a lot of talk in the changes in the market there. How should we look at that business going forward? Should we look at it as mature, possibly not going to grow anymore, or any commentary around that would be helpful, thanks.

Dan, it’s our belief that while the card and USB flash drive business is mature, we expect that there’s still growth – modest growth expected over the next few quarters. Modest growth expected for the next few years. We do not believe that the card and USB flash drive business is in decline, they are still growing. And so from our revenues perspective, we are still expecting modest revenue growth for our USB flash drive and card business in Q3, as well as modest growth – further modest growth in Q4, and modest growth next year too. Daniel Amir – Lazard Capital Markets: Okay great. And then my last question, just on the gross margins. Should we be looking at, you know, future profile of the margin, should it change in any way given that your mix is obviously going more and more towards these new products. Or should we be looking at the same range?

Well 50% is still our long term target gross margin. In the short-term, however, due to product mix shifts, and product cycle transitions, margins may move around a bit. So, for example, in Q3 our gross margins are going to be a little bit below, but we’ll be in the 47 to 49% range. Daniel Amir – Lazard Capital Markets: So, 50% is still kind of the range we should longer term?

That’s correct. 50% is still our long-term target gross margin. Daniel Amir – Lazard Capital Markets: Thanks a lot.

And your next question comes from the line of Rajvindra Gill – Needham & Co. Rajvindra Gill – Needham & Co.: Yes, thanks and congrats on good results. Just one quick clarification on the flash card controller business Riyadh. Did you say that that controller business was down 18% sequentially in the second quarter? Did I hear that correct?

That’s correct. Our card control business revenue had declined in Q2, but at the same time our USB flash drive business revenue grew quit robustly in Q2. Rajvindra Gill – Needham & Co.: How much was USB up sequentially in Q2?

USB was up 14% sequentially, whereas our card control revenue, that decreased about 18% sequentially. Rajvindra Gill – Needham & Co.: So, could you maybe comment – you talked about the pricing stabilizing and module makers perhaps coming back in and buying NAND plush. But the supply environment is going to remain tight for quite some time. All the major flash vendors, as you know, are (inaudible) capacity, in some cases cutting capacity. How do you look at the (inaudible) supply environment in the 2nd half and may be into the 1st half. Do you see any risk that the card controller business could maybe fall off faster than maybe you’re anticipating?

Well I think we expect to see more demand of the flash in the 2nd half with a new product such as the smartphone and tablet and the (ultrabook). As well as a stronger consumer demand to have achieved a healthy and supply/demand balance. The temporary, I think flash maker, they cut some capacity and production was because they (inaudible) in 2008. Beginning in 2008 everyone wanted (K) market share. Now the folks are more profitability. I think you keep a high discipline to keep the NAND industry and more balance on supply and demand. It’s a very healthy mood. And we do not see really shortage from the sales site. Quite frankly in July we see moderate increase for the card, the NAND phone, the module maker for our customer. OEN also card business picking up. Major reason because low cost smartphone, below 2G and (inaudible) really demand a new card. The (inaudible) is very high, almost 100%. Rajvindra Gill – Needham & Co.: Now your commentary on kind of moderating bundle card growth, and USB growth going forward, you grew significantly over the past couple years, year-over-year. Is the basis of the comment just kind of law of large numbers, your just seeing a deceleration in that growth rate, what is making you make those comments, why you expect moderate growth rate in the card controller business over the next two to three years? What’s the dynamic that’s happening there?

I think that’s a very good question. We believe the NAND is moving towards really close to the technology edge. So the next generation NAND, next year we’re moving to follow (inaudible). In the (inaudible) you do need the new advanced error correction technology, which is an LDPC. Today, we are really leading provider and developer for LDPC (inaudible) We believe we can make a more (inaudible) high performing controller to support its upcoming new next generation NAND technology. And we also see major (inaudible) they do more outsourcing to the (inaudible) So we see both sides, that really increase our market share and the card growth in the next two to three years. Rajvindra Gill – Needham & Co.: Thanks and congrats again.

(Operator Instructions) Your next question comes from Mike Crawford of B. Riley & Co. Mike Crawford - B. Riley & Co.: Thank you. In the past you’ve talked about ASPs in the transceiver business. I think at first they were as high as $5, you’ve disclosed, will you expect that to go down over time, but can you talk a little bit about that cost path?

Mike, our transceiver ASPs, you know, we’ve talked about a pair, LT plus EVDO in $5 to $10 range, so per each individual component they would then be half of that, so roughly $2.50 to $5 range. You know, we’re not going to be giving more specific pricing indicators given that these components are custom designed, specifically for Samsung and we’re under confidentiality obligations. But longer term, this is part of our commitment to Samsung is to produce components that will allow Samsung to more cost competitive. And so as part of our design cycles we need to continually figure out how to design our transceivers to be even more cost effective. Mike Crawford - B. Riley & Co.: Okay, thank you. And in the eMMC market, are you able to approximate what your share of that market today and where you think that could be a year or two from now.

We cannot share what market we have today, but we definitely, in the very fast paced to grow the eMMC market share.

Mike, let me also add that based on our design winds with 11 OEMs this represents pretty much a large part of all the handset makers already. We have qualification with a number of other handset OEMs so if you include the ones that we have designs winds as well as qualifications. It’s almost pretty much all of the handset makers, almost all of them. And not to mention, we have a majority of our design winds for the second half of the year that we talked about, a majority of the upcoming tablets will be using our controllers too. Mike Crawford - B. Riley & Co.: And outside of the OEMs your competitors in that market would include [Inaudible], which I believe is shipping some eMMCs today and who else?

I think the real eMMC business belongs to the M Flash manufacturers because that’s a solution. There’s not just eMMCs, there’s MCP, you also require mobile DRAM. I also different type of [Inaudible] and different type of [Inaudible]. Some with ALC, some with MLC, even some with TLC. So we work closely with an M Flash partner. We believe today that we work with the two major pioneers simultaneously. We’re definitely trying to engage more in the near future. We cannot share any information right now, but I think the price then we cannot comment on our competitor situation. Mike Crawford - B. Riley & Co.: Okay, thank you. And then Wallace, at the beginning of this call you talked about your belief that Samsung remains committed to its long-term development of it’s 4G base band program, and you talked about something that you’re working to help them develop for next year. Could you just go into that more detail? I couldn’t quite hear what you said.

We believe that Samsung remains committed to their own LT platform. This allows them to develop more dimension in mobile devices. We believe they’re recent acquisitions will demonstrate their desire to further integrate and use in house solutions. Also, I think Samsung mobile journey has multiple vendors strategy for key components with multiple vendor strategy and to increase competitive. We’re also working with Samsung with multiple future developments. The long-term is LT advance. That is next generation product for LT. That’s including voiceover IT to remove the voice network. Mike Crawford - B. Riley & Co.: Great, thank you very much.

And your next question comes from the line of Tom Sepenzis of Northland.

Hi, congratulations on the quarter. Most of my questions have been answered, but I just wanted to clarify, I think you had mentioned just about every tablet outside of Apple would be shipping with your EMMC controller product, and I’m just wondering if that includes the upcoming Windows 8 launch and how you see that unfolding?

Tom, I can’t confirm which ones we’re going to be in. We’re not going to be in all of them, but we’re going to be in the majority of the major non-Apple tablets.

Tom, we can only state we are pre-qualified supplier under Window 8 by Microsoft.

Great, thank you very much.

And your next question comes from the line of Peter Lau of Nomura.

Hi, congratulations on the good results. And I have one quick question on the eMMC products. I know, just as you have said, you have a few partners [Inaudible] and also Samsung and actually [Inaudible] just acquired Contura Company about two months ago, and Samsung I know they have their own in house solution for their eMMC and [Inaudible] controller. So I have a question [Inaudible] it looks like the [Inaudible] makers they [Inaudible] in house solution how [Inaudible] to compete with the in house solution?

Let me answer you, I’m very happy to answer your question. Every man maker they do need their internal development because they need development to support their future generation man. There are so many applications, I cannot comment on the detail regarding [Inaudible] because they have their [Inaudible], but there are so many [Inaudible] applications. There’s application acquisition [Inaudible] SSD, could be for future development, could be for other [Inaudible] solution development. They have their own priority. However, we notice they really don’t have enough resources to do all the product themselves. That’s why they need to outsource to the strong and leading controller supplier to supply their need to continue growth. Samsung has internal development teams from day one. And sometimes we collaborate and sometime we compete each other. However, Samsung with definitely need [Inaudible] provide a low cost, high performance solution to fill their gap to expand further for their market share. Same thing for the [Inaudible]. I think you’re going to see, we work with other [Inaudible] maker in the future in other [Inaudible] and other application area too. So I think it’s very natural for an M Flash maker to have their internal controller technology and solution because there’s so many applications and no one can develop all the solutions.

Thank you, and another question is about a specific controller. When [Inaudible] a few companies that can provide [Inaudible] controller and I know [Inaudible] is a bit late, just a you mentioned and we probably don’t see your product may have mis-production and [Inaudible] for you to enter the market [Inaudible] controller.

Yes, I think the SSD for the PC market it was our weak area. We did not put enough focus and resource because our [Inaudible] motto is the union growth, it’s not a solution. However, I think we have been [Inaudible] for almost two years focus area. I don’t think market will be late [Inaudible] just coming with high volume. The cache [Inaudible] will become very popular for the ultra-book. Some even used for the desktop. We believe our solution will be very unique and our strategy is to work with the major NAND Flash maker as their total solution together. And you will definitely see our solution in many leading PC makers next year.

Okay, thank you. And final question, [Inaudible] controller and do you also partner with [Inaudible] maker?

That’s correct. We will work closely with NAND Flash maker.

Okay, thank you. Congratulations again. Thank you for taking my questions.

(Operator instructions). Your next question comes from the line of Monika Garg with Pacific Crest Securities. Monika Garg – Pacific Crest Securities: Thanks for taking my question. This [inaudible] question with regards to a question that has been asked before – I mean, should probably [inaudible] the [inaudible] production, you know, only this week they said that they do recall market. So, my question is do you think this could lead to less supplies, especially in the car market? And then how do you think that could impact your car dealing business, and do you think this could impact the bundled [inaudible] rate also?

Our model maker customer purchased most of it from their side from Micro, Toshiba, SanDisk, and Samsung. Even though we have a temporary reduction in supplies from Toshiba, we believe that [inaudible] and diversified supply of a flash for both our car and [inaudible] controller business to grow moderately in Q3 and Q4. We are saying, really, the – we see [inaudible] strong growth with smart phone, especially with lower [inaudible] now. And we believe that the [inaudible] car business will continue to grow in Q3, as well as Q4, and this is while we can see today, and all though Q2 are bound to car business – we’re down 80%, but definitely now see clear sign to the recovering. And we are confident seeing that our car business growing in Q3 and Q4. Monika Garg – Pacific Crest Securities: Thanks, and just one more question on the cash this deepens well inside the PC side, could you boys kind of how you are seeing the penetration [inaudible] of this market – like, exiting 2012 and exiting 2013, what do you think could be attached for cash assets or pure assets?

Well, I can give you my personal opinion. I think the cost become very [inaudible] the PC market. So, the full [inaudible] to be is the steer staying away more expensive than high dry solutions in HDB. So, we see it will be more interesting the market trend to feel [inaudible] purchasing 20 gigabytes, to say 30 gigabytes. That is also the [inaudible] for the stat. We believe that will be able to develop very low cost hypo-[inaudible] solution with the eMMC pertaining to the range, and provide to see major oriental customers. According to [inaudible], there’s 32 gigabytes, cash of the total bond cost should be less than $20. So, we think that the $20 whether it is the controller portion will be very, very small. So, it will be very, very few [inaudible] maker can compete with a low cost and high volume market, and think of how much you will be one of them. Monika Garg – Pacific Crest Securities: Very helpful, thank you so much.

And at this time, I would like to turn the call back over to management for closing remarks.

Before I turn the call back to Wallace for his closing remarks, I just wanted to add a comment about a question I believe some of our shareholders have been expressing directly to us, which is – which relates to the topic of a share repurchase Silicon Motion. As you know – and I think shareholder value is very important to our company, and with the recent share price components, the recent performance of our share price, we are – which is deeply of concern to our board and our shareholders, including Wallace and myself. We are actively exploring options to enhance our value, and including a share re-purchase programs. We had discussions with our board, and we will take steps as appropriate.