REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
four ordinary shares |
* |
Not for trading, but only in connection with the listing on the Nasdaq Global Select Market of American Depositary Shares, or ADSs, each representing four ordinary shares. |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Emerging growth company |
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International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |
Other ☐ |
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• | “ADRs” are to the American depositary receipts that evidence our ADSs; |
• | “ADSs” are to our American depositary shares, each of which represents four of our ordinary shares; |
• | “CAGR” are to compound annual growth rate; |
• | “China” or “PRC” are to the People’s Republic of China, excluding the special administrative regions of Hong Kong and Macau; |
• | “Korea” are to the Republic of Korea, or South Korea; |
• | “Nasdaq” are to the Nasdaq Global Select Stock Market; |
• | “NT dollar,” “NT dollars” or “NT$” are to New Taiwan dollars, the legal currency of Taiwan; |
• | “ROC” or “Taiwan” are to the Republic of China, the official name of Taiwan; |
• | “shares” or “ordinary shares” are to our ordinary shares, with a par value US$0.01 per share; |
• | “U.S. GAAP” are to generally accepted accounting principles in the United States; |
• | “U.S. dollar,” “U.S. dollars” or “US$” are to United States dollars, the legal currency of the United States; and |
• | “we,” “us,” “our company,” “our,” “SMTC” and “Silicon Motion” are to Silicon Motion Technology Corporation and its subsidiaries. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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US$ |
US$ |
US$ |
US$ |
US$ |
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(in thousands, except for per share data) |
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Consolidated Statements of Income Data: |
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Net sales |
556,146 | 523,404 | 530,348 | 457,253 | 539,521 | |||||||||||||||
Cost of sales |
281,541 | 272,210 | 269,541 | 235,081 | 279,365 | |||||||||||||||
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Gross profit |
274,605 | 251,194 | 260,807 | 222,172 | 260,156 | |||||||||||||||
Operating expenses: |
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Research and development |
92,405 | 102,053 | 102,028 | 110,305 | 121,784 | |||||||||||||||
Sales and marketing |
25,765 | 25,868 | 29,279 | 25,108 | 24,805 | |||||||||||||||
General and administrative |
17,072 | 16,933 | 17,633 | 17,878 | 15,604 | |||||||||||||||
Impairment of goodwill and intangible assets |
— | 10,337 | 4,069 | 15,970 | 17,489 | |||||||||||||||
Amortization of intangible assets |
2,103 | 2,534 | 2,964 | 766 | — | |||||||||||||||
Gain from disposal of noncurrent assets held for sale |
— | (1,880 | ) | — | — | — | ||||||||||||||
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Total operating expenses |
137,345 | 155,845 | 155,973 | 170,027 | 179,682 | |||||||||||||||
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Operating income |
137,260 | 95,349 | 104,834 | 52,145 | 80,474 | |||||||||||||||
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Total non-operating income |
1,370 | 3,652 | 5,027 | 19,929 | 5,084 | |||||||||||||||
Income before income taxes |
138,630 | 99,001 | 109,861 | 72,074 | 85,558 | |||||||||||||||
Income tax expense |
27,690 | 24,046 | 11,791 | 7,676 | 5,812 | |||||||||||||||
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Net income |
110,940 | 74,955 | 98,070 | 64,398 | 79,746 | |||||||||||||||
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Weighted average shares outstanding: |
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Basic |
140,919 | 142,738 | 144,123 | 140,708 | 139,421 | |||||||||||||||
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Diluted |
142,050 | 143,606 | 144,512 | 141,183 | 139,910 | |||||||||||||||
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Earnings per share: |
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Basic |
0.79 | 0.53 | 0.68 | 0.46 | 0.57 | |||||||||||||||
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Diluted |
0.78 | 0.52 | 0.68 | 0.46 | 0.57 | |||||||||||||||
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Earnings per ADS (1) : |
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Basic |
3.15 | 2.10 | 2.72 | 1.83 | 2.29 | |||||||||||||||
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Diluted |
3.12 | 2.09 | 2.71 | 1.82 | 2.28 | |||||||||||||||
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(1) | Each ADS represents four ordinary shares. |
As of December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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US$ |
US$ |
US$ |
US$ |
US$ |
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(in thousands) |
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Consolidated Balance Sheet Data: |
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Cash and cash equivalents |
274,483 | 359,453 | 284,989 | 323,166 | 342,961 | |||||||||||||||
Other current assets |
202,417 | 209,344 | 213,501 | 242,033 | 275,132 | |||||||||||||||
Working capital |
330,914 | 391,553 | 384,839 | 433,711 | 459,349 | |||||||||||||||
Long-term investments |
120 | — | 4,242 | 3,000 | 5,000 | |||||||||||||||
Property and equipment, net |
47,892 | 51,370 | 101,410 | 98,488 | 105,496 | |||||||||||||||
Goodwill and intangible assets, net |
73,883 | 66,393 | 59,352 | 17,489 | — | |||||||||||||||
Other non-current assets |
7,231 | 7,172 | 9,120 | 13,553 | 13,471 | |||||||||||||||
Total assets |
606,026 | 693,732 | 672,614 | 697,729 | 742,060 | |||||||||||||||
Total liabilities |
163,263 | 199,681 | 140,337 | 160,945 | 184,318 | |||||||||||||||
Total shareholders’ equity |
442,763 | 494,051 | 532,277 | 536,784 | 557,742 |
As of December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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US$ |
US$ |
US$ |
US$ |
US$ |
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(in thousands) |
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Consolidated Cash Flow Data: |
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Net cash provided by operating activities |
125,568 | 103,881 | 108,242 | 77,695 | 117,229 | |||||||||||||||
Net cash provided by (used in) investing activities |
(8,220 | ) | (14,548 | ) | (79,568 | ) | 34,668 | (21,545 | ) | |||||||||||
Net cash provided by (used in) financing activities |
2,194 | (31,740 | ) | (101,820 | ) | (70,260 | ) | (73,914 | ) | |||||||||||
Depreciation and amortization |
11,585 | 13,133 | 14,796 | 13,213 | 13,562 | |||||||||||||||
Capital expenditures |
(12,220 | ) | (11,683 | ) | (74,853 | ) | (11,015 | ) | (19,545 | ) |
• | Our results of operations are subject to substantial quarterly and annual fluctuations due to a number of factors that could adversely affect our business and the price of our ADSs. |
• | The COVID-19 pandemic continues to impact our business and could materially adversely affect our financial condition and results of operations. |
• | We are subject to the cyclical nature of the semiconductor industry, which has been subject to significant fluctuations. |
• | We are subject to order and shipment uncertainties and our results of operations could be materially adversely affected if we are unable to accurately forecast customer demand. |
• | The demand for our products depends in part on the market conditions in the industries into which they are sold. Fluctuations in demand for our products or a market decline in any of these industries could have a material adverse effect on our results of operations. |
• | We may pursue acquisitions, investments and dispositions, which could adversely affect our results of operations. |
• | We depend on a few large customers for a significant portion of our revenues and a loss of some of these customers would result in the loss of a significant portion of our revenues. |
• | NAND industry cyclicality could adversely affect our growth and profitability. |
• | If we fail to accurately anticipate and respond to market trends or fail to develop and introduce new or enhanced products to address these trends on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed. |
• | Our gross margin and results of operations may be adversely affected in the future by a number of factors, including decreases in average selling prices of products over time and shifts in our product mix. |
• | Our SSD solutions product performance could continue to adversely affect our results of operations. |
• | The loss of any of our key personnel or the failure to attract or retain specialized technical and management personnel could impair our ability to grow our business. |
• | We rely on independent semiconductor foundries and subcontractors for the fabrication, assembly and testing of our integrated circuits, and any limitation of their available capacity to us or failure to fulfill our orders satisfactorily could damage our relationships with our customers, decrease our sales or limit our ability to grow our business. |
• | Failure to protect our intellectual properties or maintain the right to certain other technologies may negatively affect our ability to compete. |
• | Failure to successfully defend against intellectual property lawsuits brought against us may adversely affect our business. |
• | Because the markets in which we compete are highly competitive and many of our competitors have greater resources than we have, we cannot be certain that our products will compete favorably in the marketplace. |
• | Our products must meet exacting specifications and undetected defects and failures may occur, which may cause customers to return or stop buying our products and may expose us to product liability risk and risks of indemnification against defects in our products. |
• | Our intellectual property indemnification practices may adversely impact our business. |
• | We are exposed to potential impairment on investments. |
• | Any failure to achieve and maintain effective internal controls could have a material adverse effect on our business, results of operations and the market price of our ADSs. |
• | We are subject to cybersecurity risk. |
• | Our business is subject to various governmental regulations, and compliance with these regulations may cause us to incur significant expense. |
• | Our stock price has been, and may continue to be, volatile, which could result in investors losing all or part of their investments. |
• | There can be no assurance that we will continue to declare cash dividends, if at all, or in any particular amounts. |
• | If we are characterized as a passive foreign investment company, U.S. Holders may experience adverse tax consequences. |
• | Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business and other factors related to our international operations. |
• | We operate primarily in regions that are susceptible to natural disasters. |
• | We face substantial risks associated with doing business in Taiwan because of tense regional geopolitical risk. |
• | The enactment of legislation implementing changes in taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies could materially impact our financial position and results of operations. |
• | A substantial amount of our stock is held by a small number of large investors and significant sales of our ADSs in the public market by one or more of these holders could cause our stock price to fall. |
• | We are subject to risks associated with development and construction of our office buildings. |
• | the unpredictable consequences of public health emergencies such as COVID-19, further discussed in the following Risk Factor, and natural or man-made disasters; |
• | business conditions, including downturns in market segments, such as the computing and mobile markets, in which we operate, or in global and regional economies; |
• | the availability and pricing of third-party semiconductor foundry, assembly, packaging and testing services, including their yield, and related raw materials; |
• | significant reduction, changes in timing or cancellation of customer orders; |
• | changes in our customers’ sales outlook, purchasing patterns and inventory adjustments; |
• | the loss of a design-win or key customer; |
• | competitive and pricing pressures, including new product introductions and other actions taken by competitors; |
• | availability and cost of NAND flash used in our and our customer’s products; |
• | changes in our product mix, especially relating to the sales of our NAND flash controllers and SSD solutions, and their effect on our gross margin; |
• | inventory impairment uncertainties relating to the effects of volatile NAND flash price and excess inventory; |
• | our ability to develop, market and transition to volume production new or enhanced products and in a cost-effective and timely manner; |
• | changes in the timing and number of tape-outs and other significant R&D expenses; |
• | competitive pressure to attract, retain and motivate a highly skilled workforce, including R&D personnel; |
• | intellectual property disputes; and |
• | changes in our effective tax rate. |
• | actual or anticipated variations in our quarterly operating results or those of our competitors, customers, or NAND flash vendors; |
• | actual or anticipated changes in NAND flash supply and demand dynamics; |
• | actual or anticipated changes in our market share or the market share of our competitors; |
• | the commencement or results of litigation; |
• | short selling or other market manipulation activities; |
• | announcements by us, our competitors, our customers, or their other suppliers of new products or technological innovations; |
• | changes in financial estimates or recommendations by securities analysts; |
• | economic and social effects of the COVID-19 virus or other pandemics; |
• | the payment or non-payment of cash dividends at the discretion of our board of directors; |
• | the announcement and implementation of share repurchase programs; |
• | announcements by us or our competitors of significant acquisitions, divestitures or partnerships; and |
• | actual or anticipated changes in the global economic or industry outlook. |
• | international economic and political conditions, such as political tensions between countries in which we do business (please also refer to Risk Factors relating to China and Taiwan); |
• | unexpected changes in, or impositions of, legislative or regulatory requirements; |
• | complying with a variety of foreign laws; |
• | differing legal standards with respect to protection of intellectual property and employment practices; |
• | cultural differences in the conduct of business; |
• | inadequate local infrastructure that could result in business disruptions; |
• | trade issues related to export or import restrictions, tariffs, quotas and other trade barriers and restrictions, including those related to the ongoing trade disputes between China and the U.S.; |
• | financial risks such as longer payment cycles and difficulty in collecting accounts receivable; |
• | adverse taxes rules, regulations and penalties; and |
• | other factors beyond our control such as nature disasters, terrorism, civil unrest, war and health emergencies, such as COVID-19. |
ITEM 4. |
INFORMATION ON THE COMPANY |
Name of Entity |
Jurisdiction of Incorporation | |
Silicon Motion, Inc. | Taiwan | |
Silicon Motion (MCO) Ltd*. | Macau | |
Silicon Motion Technology (HK) Ltd. | Hong Kong |
* | Liquidated in December 2020. |
• | the performance, features, quality and price of our products; |
• | the timing and success of new product introductions by us, our customers and our competitors; |
• | emergence, rate of adoption and acceptance of new industry standards; |
• | our ability to obtain adequate foundry capacity at competitive prices; and |
• | the number and nature of our competitors in a given market sub-segment. |
Location |
Primary Use |
Approximate Square Footage | ||
Hsinchu, Taiwan |
Research & development, management & administration | 205,200 | ||
Taipei, Taiwan |
Research & development, sales & marketing | 82,200 | ||
Shanghai, China |
Research & development, sales & marketing | 43,400 | ||
Shenzhen, China |
Sales & marketing | 20,200 | ||
Milpitas, California |
Sales & marketing, management | 13,300 | ||
Others (1) |
Sales & marketing, management | 18,900 |
(1) | Korea, Macau, Hong Kong, Yokohama, Japan, Beijing, Nanjing, Hangzhou and Suzhou, China |
ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
• | Total revenue increased by 18% to US$539.5 million. |
• | Gross profit as a percentage of revenue decreased by 0.4% points to 48.2%. |
• | Total operating expenses increased by 6% to US$179.7 million. |
• | Operating profit increased by 54% to US$80.5 million. |
• | Income tax expense as a percentage of income before income tax decreased to 6.8%. |
• | Diluted earnings per ADS increased by 25% to US$2.28. |
Year Ended December 31, |
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2018 |
2019 |
2020 |
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Currency |
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U.S. dollars |
88 | % | 95 | % | 98 | % | ||||||
Korean won |
3 | % | 1 | % | — | |||||||
Chinese yuan |
9 | % | 4 | % | 2 | % |
• | cost of wafer fabrication; |
• | assembly, testing and shipping costs of our semiconductors; |
• | personnel and equipment costs associated with manufacturing support; |
• | quality assurance; |
• | cost of raw materials; and |
• | write-down of inventory. |
• | the selection of critical accounting policies; and |
• | the judgments and other uncertainties affecting the application of those critical accounting policies. |
Year Ended December 31, |
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2018 |
2019 |
2020 |
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Net sales |
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of sales |
50.8 | 51.4 | 51.8 | |||||||||
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Gross profit |
49.2 | 48.6 | 48.2 | |||||||||
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Operating expenses: |
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Research and development |
19.2 | 24.1 | 22.6 | |||||||||
Sales and marketing |
5.5 | 5.5 | 4.6 | |||||||||
General and administrative |
3.3 | 3.9 | 2.9 | |||||||||
Impairment of goodwill and intangible assets |
0.8 | 3.5 | 3.2 | |||||||||
Amortization of intangible assets |
0.6 | 0.2 | — | |||||||||
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Total operating expenses |
29.4 | 37.2 | 33.3 | |||||||||
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Operating income |
19.8 | 11.4 | 14.9 | |||||||||
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Non-operating income (expenses): |
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Gain from disposal of subsidiary |
0.0 | 2.7 | — | |||||||||
Gain from disposal of long-term investments |
0.0 | 0.1 | — | |||||||||
Gain from disposal of short-term investments |
0.0 | 0.0 | 0.0 | |||||||||
Interest income |
1.2 | 1.5 | 0.9 | |||||||||
Foreign exchange gain (loss), net |
(0.1 | ) | 0.0 | 0.1 | ||||||||
Interest expense |
(0.1 | ) | 0.0 | 0.0 | ||||||||
Loss on equity-method investment |
(0.1 | ) | — | — | ||||||||
Other income (loss), net |
0.0 | 0.0 | 0.0 | |||||||||
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Total non-operating income |
0.9 | 4.3 | 1.0 | |||||||||
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Income before income taxes |
20.7 | 15.7 | 15.9 | |||||||||
Income tax expense |
2.2 | 1.7 | 1.1 | |||||||||
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Net income |
18.5 | % | 14.0 | % | 14.8 | % | ||||||
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Years Ended December 31 |
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2019 |
2020 |
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US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
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(in thousands, except percentage data) |
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Net sales |
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Mobile Storage |
441,700 | 97 | 532,682 | 99 | 90,982 | 21 | ||||||||||||||||||
Mobile Communications |
10,356 | 2 | — | — | (10,356 | ) | (100 | ) | ||||||||||||||||
Others |
5,197 | 1 | 6,839 | 1 | 1,642 | 32 | ||||||||||||||||||
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Net sales |
457,253 | 100 | 539,521 | 100 | 82,268 | 18 |
Years Ended December 31 |
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2019 |
2020 |
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US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
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(in thousands, except percentage data) |
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Gross profit |
222,172 | 49 | 260,156 | 48 | 37,984 | 17 |
Years Ended December 31 |
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2019 |
2020 |
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US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
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(in thousands, except percentage data) |
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Salary and benefits |
57,165 | 13 | 66,674 | 12 | 9,509 | 17 | ||||||||||||||||||
Stock-based compensation |
9,927 | 2 | 10,132 | 2 | 205 | 2 | ||||||||||||||||||
Other research and development |
43,213 | 9 | 44,978 | 9 | 1,765 | 4 | ||||||||||||||||||
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Research and development |
110,305 | 24 | 121,784 | 23 | 11,479 | 10 |
Years Ended December 31 |
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2019 |
2020 |
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US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
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Salary and benefits |
14,586 | 3 | 15,599 | 3 | 1,013 | 7 | ||||||||||||||||||
Stock-based compensation |
1,789 | 1 | 1,759 | — | (30 | ) | (2 | ) | ||||||||||||||||
Other sales and marketing |
8,733 | 2 | 7,447 | 2 | (1,286 | ) | (15 | ) | ||||||||||||||||
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Sales and marketing |
25,108 | 6 | 24,805 | 5 | (303 | ) | (1 | ) |
Years Ended December 31 |
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2019 |
2020 |
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US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Salary and benefits |
9,202 | 2 | 9,445 | 2 | 243 | 3 | ||||||||||||||||||
Stock-based compensation |
2,570 | 1 | 2,445 | — | (125 | ) | (5 | ) | ||||||||||||||||
Other general and administrative |
6,106 | 1 | 3,714 | 1 | (2,392 | ) | (39 | ) | ||||||||||||||||
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General and administrative |
17,878 | 4 | 15,604 | 3 | (2,274 | ) | (13 | ) |
Years Ended December 31 |
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2019 |
2020 |
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US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Cost of sales |
305 | — | 253 | — | (52 | ) | (17 | ) | ||||||||||||||||
Research and development |
9,927 | 2 | 10,132 | 2 | 205 | 2 | ||||||||||||||||||
Sales and marketing |
1,789 | — | 1,759 | — | (30 | ) | (2 | ) | ||||||||||||||||
General and administrative |
2,570 | 1 | 2,445 | — | (125 | ) | (5 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total stock-based compensation |
14,591 | 3 | 14,589 | 2 | (2 | ) | (0 | ) |
Years Ended December 31 |
||||||||||||||||||||||||
2018 |
2019 |
|||||||||||||||||||||||
US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Net sales |
||||||||||||||||||||||||
Mobile Storage |
494,012 | 93 | 441,700 | 97 | (52,312 | ) | (11 | ) | ||||||||||||||||
Mobile Communications |
30,163 | 6 | 10,356 | 2 | (19,807 | ) | (66 | ) | ||||||||||||||||
Others |
6,173 | 1 | 5,197 | 1 | (976 | ) | (16 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net sales |
530,348 | 100 | 457,253 | 100 | (73,095 | ) | (14 | ) |
Years Ended December 31 |
||||||||||||||||||||||||
2018 |
2019 |
|||||||||||||||||||||||
US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Gross profit |
260,807 | 49 | 222,172 | 49 | (38,635 | ) | (15 | ) |
Years Ended December 31 |
||||||||||||||||||||||||
2018 |
2019 |
|||||||||||||||||||||||
US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Salary and benefits |
53,922 | 10 | 57,165 | 13 | 3,243 | 6 | ||||||||||||||||||
Stock-based compensation |
13,278 | 2 | 9,927 | 2 | (3,351 | ) | (25 | ) | ||||||||||||||||
Other research and development |
34,828 | 7 | 43,213 | 9 | 8,385 | 24 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Research and development |
102,028 | 19 | 110,305 | 24 | 8,277 | 8 |
Years Ended December 31 |
||||||||||||||||||||||||
2018 |
2019 |
|||||||||||||||||||||||
US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Salary and benefits |
15,546 | 3 | 14,586 | 3 | (960 | ) | (6 | ) | ||||||||||||||||
Stock-based compensation |
3,407 | 1 | 1,789 | 1 | (1,618 | ) | (47 | ) | ||||||||||||||||
Other sales and marketing |
10,326 | 2 | 8,733 | 2 | (1,593 | ) | (15 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Sales and marketing |
29,279 | 6 | 25,108 | 6 | (4,171 | ) | (14 | ) |
Years Ended December 31 |
||||||||||||||||||||||||
2018 |
2019 |
|||||||||||||||||||||||
US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Salary and benefits |
8,073 | 1 | 9,202 | 2 | 1,129 | 14 | ||||||||||||||||||
Stock-based compensation |
3,704 | 1 | 2,570 | 1 | (1,134 | ) | (31 | ) | ||||||||||||||||
Other general and administrative |
5,856 | 1 | 6,106 | 1 | 250 | 4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
General and administrative |
17,633 | 3 | 17,878 | 4 | 245 | 1 |
Years Ended December 31 |
||||||||||||||||||||||||
2018 |
2019 |
|||||||||||||||||||||||
US$ |
% of net sales |
US$ |
% of net sales |
$ change |
% change |
|||||||||||||||||||
(in thousands, except percentage data) |
||||||||||||||||||||||||
Cost of sales |
390 | — | 305 | — | (85 | ) | (22 | ) | ||||||||||||||||
Research and development |
13,278 | 2 | 9,927 | 2 | (3,351 | ) | (25 | ) | ||||||||||||||||
Sales and marketing |
3,407 | 1 | 1,789 | — | (1,618 | ) | (47 | ) | ||||||||||||||||
General and administrative |
3,704 | 1 | 2,570 | 1 | (1,134 | ) | (31 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total stock-based compensation |
20,779 | 4 | 14,591 | 3 | (6,188 | ) | (30 | ) |
Year Ended December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
(in thousands) |
||||||||
Cash and cash equivalents |
323,166 | 342,961 | ||||||
Short-term investments |
2,010 | — | ||||||
|
|
|
|
|||||
Cash, cash equivalents and short-term investments |
325,176 | 342,961 |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
(in thousands) |
||||||||||||
Consolidated Cash Flow Data: |
||||||||||||
Net cash provided by operating activities |
108,242 | 77,695 | 117,229 | |||||||||
Net cash provided by (used in) investing activities |
(79,568 | ) | 34,668 | (21,545 | ) | |||||||
Net cash used in financing activities |
(101,820 | ) | (70,260 | ) | (73,914 | ) | ||||||
Depreciation and amortization |
14,796 | 13,213 | 13,562 | |||||||||
Capital expenditures |
(74,853 | ) | (11,015 | ) | (19,545 | ) |
• | Our net income includes substantial non-cash charges, namely US$13.6 million of depreciation and amortization, US$14.6 million of stock-based compensation and US$17.5 million of impairment of goodwill. |
• | Net working capital increased by US$10.2 million. Inventory increased by US$21.7 million, notes and accounts receivable increased by US$7.1 million, notes and accounts payable increased by US$13.8 million, income tax payable increased by US$4.4 million, and other assets net of other liabilities provided US$0.4 million of cash. |
• | Our net income includes substantial non-cash charges, namely US$13.2 million of depreciation and amortization, US$14.6 million of stock-based compensation and US$16.0 million of impairment of goodwill and intangible assets. |
• | Net working capital increased by US$20.3 million. Inventory increased by US$10.2 million, notes and accounts receivable increased by US$18.8 million, notes and accounts payable increased by US$4.4 million, income tax payable decreased by US$1.7 million, and other assets net of other liabilities provided US$5.9 million of cash. |
Amount of Commitment Maturing by Year |
||||||||||||||||||||
Total |
Less Than 1 Year |
1-3 Years |
3-5 Years |
More Than 5 Years |
||||||||||||||||
US$ |
US$ |
US$ |
US$ |
US$ |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Operating leases |
7,339 | 3,253 | 3,247 | 807 | 32 | |||||||||||||||
Pension |
2,603 | 2,603 | (a |
) |
(a |
) |
(a |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Contractual cash obligations |
9,942 | 5,856 | 3,247 | 807 | 32 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Our pension obligation after one year has not been estimated. |
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Name |
Age |
Position | ||||
James Chow |
70 | Chairman of the Board | ||||
Wallace C. Kou |
62 | President, Chief Executive Officer and Managing Director | ||||
Steve Chen |
49 | Director | ||||
Tsung-Ming Chung |
71 | Director | ||||
Lien-Chun Liu |
63 | Director | ||||
Yung-Chien Wang |
58 | Director | ||||
Han-Ping D. Shieh |
67 | Director | ||||
Kenneth Kuan-Ming Lin |
68 | Director | ||||
Riyadh Lai |
52 | Chief Financial Officer | ||||
Nelson Duann |
52 | Senior VP of Marketing & R&D and Director | ||||
Arthur Yeh |
60 | VP of Sales, Asia and Greater China | ||||
Robert Fan |
57 | President of SMI USA | ||||
Ken Chen |
59 | VP of Operations | ||||
Kevin Yeh |
57 | VP of R&D, Algorithm & Technology | ||||
Kevin Tsai |
55 | Senior Director of R&D, System Validation |
• | convening shareholders’ meetings and reporting its work to shareholders at such meetings; |
• | implementing shareholders’ resolutions; |
• | determining our business plans and investment proposals; |
• | formulating our profit distribution plans and loss recovery plans; |
• | determining our debt and finance policies and proposals for the increase or decrease in our registered capital and the issuance of debentures; |
• | formulating our major acquisition and disposition plans, and plans for merger, division or dissolution; |
• | proposing amendments to our amended and restated memorandum and articles of association; and |
• | exercising any other powers conferred by the shareholders’ meetings or under our amended and restated memorandum and articles of association. |
As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Management and administration |
132 | 120 | 120 | |||||||||
Operations |
41 | 33 | 35 | |||||||||
Research and development |
897 | 880 | 964 | |||||||||
Sales and marketing |
237 | 204 | 204 | |||||||||
|
|
|
|
|
|
|||||||
Total |
1,307 | 1,237 | 1,323 | |||||||||
|
|
|
|
|
|
Shares Beneficially Owned |
||||||||
Number |
% |
|||||||
Executive Officers and Directors: |
||||||||
James Chow (1) |
2,401,266 | 1.72 | ||||||
Wallace C. Kou (2) |
1,977,248 | 1.42 | ||||||
Steve Chen |
60,000 | * | ||||||
Tsung-Ming Chung |
90,000 | * | ||||||
Lien-Chun Liu |
244,280 | * | ||||||
Yung-Chien Wang |
848,674 | * | ||||||
Han-Ping D. Shieh |
70,800 | * | ||||||
Kenneth Kuan-Ming Lin |
30,000 | * | ||||||
Riyadh Lai (3) |
1,804,180 | 1.29 | ||||||
Nelson Duann |
44,000 | * | ||||||
Arthur Yeh |
50,524 | * | ||||||
Robert Fan |
54,000 | * | ||||||
Ken Chen (4) |
217,649 | * | ||||||
Kevin Yeh |
52,000 | * | ||||||
Kevin Tsai |
6,000 | * |
* | Less than one percent |
(1) | Represents 2,401,266 shares owned by Mr. Chow. Mr. Chow is the chairman of Concord Consulting Inc. and Concord Financial Co. Ltd. which owned 42,445 and 196,491 shares, respectively. Mr. Chow disclaims any beneficial ownership of these shares. |
(2) | Represents 1,657,248 shares owned by Mr. Kou, 320,000 shares owned by his family members. |
(3) | Represents 984,300 shares owned by Mr. Lai and 819,880 shares owned by his spouse. |
(4) | Represents 35,324 shares owned by Mr. Chen and 182,325 shares owned by his spouse. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
Identity of person or group |
Number of shares owned |
Percentage Owned (1) |
||||||
Cardinal Capital Management, LLC |
9,714,888 | (2) |
7.0 | % | ||||
ARGA Investment Management, LP and Avula Rama Krishna. |
7,688,452 | (3) |
5.5 | % |
(1) | Based on 139,700,652 ordinary shares outstanding as of March 31, 2021. |
(2) | Cardinal Capital Management, LLC held 2,428,722 ADSs (representing 9,714,888 ordinary shares) according to a Schedule 13G filed February 17, 2021. |
(3) | ARGA Investment Management, LP and Avula Rama Krishna held 1,922,113 ADSs (representing 7,688,452 ordinary shares), according to a Schedule 13G dated February 11, 2019. |
ITEM 8. |
FINANCIAL INFORMATION |
ITEM 9. |
THE OFFER AND LISTING |
Price per ADS (US$) |
||||||||
High |
Low |
|||||||
Annual: |
||||||||
2016 |
55.85 | 27.41 | ||||||
2017 |
55.68 | 37.37 | ||||||
2018 |
61.85 | 31.73 | ||||||
2019 |
50.87 | 30.86 | ||||||
2020 |
53.04 | 26.72 | ||||||
Quarterly: |
||||||||
First Quarter, 2019 |
44.30 | 32.15 | ||||||
Second Quarter, 2019 |
44.41 | 36.43 | ||||||
Third Quarter, 2019 |
47.23 | 30.86 | ||||||
Fourth Quarter, 2019 |
50.87 | 34.73 | ||||||
First Quarter, 2020 |
53.04 | 26.72 | ||||||
Second Quarter, 2020 |
52.46 | 35.11 | ||||||
Third Quarter, 2020 |
50.42 | 35.13 | ||||||
Fourth Quarter, 2020 |
48.39 | 35.16 | ||||||
First Quarter, 2021 |
67.69 | 46.54 | ||||||
Second Quarter, 2021 (1) |
74.10 | 60.47 | ||||||
Monthly |
||||||||
November 2020 |
40.1 | 35.16 | ||||||
December 2020 |
48.39 | 38.43 | ||||||
January 2021 |
52.19 | 46.54 | ||||||
February 2021 |
64.40 | 49.51 | ||||||
March 2021 |
67.69 | 56.06 | ||||||
April 2021 |
74.10 | 60.47 | ||||||
May 2021 (1) |
72.24 | 62.71 |
(1) | Through May 7, 2021. |
ITEM 10. |
ADDITIONAL INFORMATION |
• | banks and financial institutions; |
• | brokers and dealers in securities or currencies; |
• | insurance companies; |
• | tax-exempt organizations and retirement plans; |
• | grantor trusts; |
• | S corporations; |
• | persons holding ADSs or ordinary shares as part of hedging, conversion, constructive sale, straddle or other integrated transactions; |
• | persons who acquired their ordinary shares upon the exercise of employee stock options or otherwise as compensation; |
• | persons who have elected the mark-to-market |
• | persons who own 10% or more of our ADSs or shares; |
• | real estate investment trusts or regulated investment companies; |
• | U.S. persons whose “functional currency” is not the U.S. dollar; |
• | certain former citizens or long-term residents of the United States; and |
• | Non-U.S. Holders (as defined below). |
• | a citizen or resident individual of the United States; |
• | a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation, regardless of its source; or |
• | a trust if it is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
• | a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States that includes an exchange of information program; or |
• | a foreign corporation if its stock with respect to which a dividend is paid or its ADSs backed by such stock are readily tradable on an established securities market within the United States. |
• | no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation applies to us or our operations; and |
• | the aforesaid tax or any tax in the nature of estate duty or inheritance tax are not payable on our ordinary shares, debentures or other obligations. |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. |
CODE OF ETHICS |
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
(in thousands) |
||||||||
Audit Fees (1) |
881 | 887 | ||||||
Audit-Related Fees (2) |
— | — | ||||||
Tax Fees (3) |
200 | 190 | ||||||
All Other Fees (4) |
— | — | ||||||
Total |
1,081 | 1,077 |
(1) | Audit Fees |
(2) | Audit-Related Fees |
(3) | Tax Fees |
(4) | All other fees |
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. |
CORPORATE GOVERNANCE |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
Exhibit Number |
Description | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File — the cover page XBRL tags are embedded within the Exhibit 101 Inline XBRL document set |
* | Filed herewith. |
SILICON MOTION TECHNOLOGY CORPORATION | ||
By: |
/S/ WALLACE C. KOU | |
Wallace C. Kou, President and Chief Executive Officer |
F-2 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
||||
F-8 |
||||
F-9 |
• | We tested the design and operating effectiveness of controls over management’s goodwill impairment analysis, including those over the assumptions used in determination of Shannon reporting unit’s fair value, such as controls related to management’s selection of the discount rate and assessment on the reasonableness of forecasts of future revenue. |
• | We evaluated management’s ability to accurately forecast future revenue by comparing actual results to management’s historical forecasts. |
• | We performed sensitivity analyses to evaluate the risk of impairment if key assumptions are changed. |
• | We evaluated the reasonableness of management’s forecasts of revenue by comparing the forecasts to: |
• | Historical revenues. |
• | Internal communications to management and the Board of Directors of the Company’s business plans that support the forecast of revenue. |
• | Forecasted information included in Company’s press releases as well as in analyst and industry reports for the Company and its peer companies. |
• | We tested the underlying data used in the discounted cash flow calculations and the mathematical accuracy of the discounted cash flow calculations. |
• | We considered the impact of industry and market conditions on management’s forecasts for this reporting unit, including consideration of the effects related to the COVID-19 pandemic. |
• | With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by (1) testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation, and (2) developing a range of independent estimates and comparing those to the discount rate selected by management. |
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
||||||||
Short-term investments |
— | |||||||
Notes and accounts receivable, net |
||||||||
Inventories |
||||||||
Restricted assets-current |
||||||||
Noncurrent assets held for sale |
||||||||
Prepaid expenses and other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Long-term investments |
||||||||
Property and equipment, net |
||||||||
Deferred income tax assets, net |
||||||||
Goodwill |
— | |||||||
Operating lease assets |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total assets |
||||||||
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Current Liabilities |
||||||||
Notes and accounts payable |
||||||||
Income tax payable |
||||||||
Refund liabilities |
||||||||
Accrued expenses and other current liabilities |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Other long-term liabilities |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
Commitments and Contingencies (Note 19) |
||||||||
Shareholders’ Equity |
||||||||
Ordinary Shares at US$ |
||||||||
Authorized: |
||||||||
Issued and outstanding: |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive income (loss) |
( |
) | ( |
) | ||||
Retained Earnings |
||||||||
|
|
|
|
|||||
Total shareholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and shareholders’ equity |
||||||||
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
NET SALES |
||||||||||||
COST OF SALES |
||||||||||||
|
|
|
|
|
|
|||||||
GROSS PROFIT |
||||||||||||
|
|
|
|
|
|
|||||||
OPERATING EXPENSES |
||||||||||||
Research and development |
||||||||||||
Sales and marketing |
||||||||||||
General and administrative |
||||||||||||
Impairment of goodwill and intangible assets |
||||||||||||
Amortization of intangible assets |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
||||||||||||
|
|
|
|
|
|
|||||||
OPERATING INCOME |
||||||||||||
|
|
|
|
|
|
|||||||
NON-OPERATING INCOME (EXPENSES) |
||||||||||||
Gain (loss) from disposal of subsidiary |
— | ( |
) | |||||||||
Gain from disposal of long-term investments |
— | — | ||||||||||
Gain from disposal of short-term investments |
||||||||||||
Interest income |
||||||||||||
Foreign exchange gain (loss), net |
( |
) | ||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Loss on equity-method investment |
( |
) | — | — | ||||||||
Other income (loss), net |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total non-operating income |
||||||||||||
|
|
|
|
|
|
|||||||
INCOME BEFORE INCOME TAX |
||||||||||||
INCOME TAX EXPENSE |
||||||||||||
|
|
|
|
|
|
|||||||
NET INCOME |
||||||||||||
|
|
|
|
|
|
|||||||
EARNINGS PER ORDINARY SHARE: |
||||||||||||
Basic |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted |
||||||||||||
|
|
|
|
|
|
|||||||
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING |
||||||||||||
Basic (Thousands) |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted (Thousands) |
||||||||||||
|
|
|
|
|
|
|||||||
EARNINGS PER ADS (one ADS equals four ordinary shares): |
||||||||||||
Basic |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted |
||||||||||||
|
|
|
|
|
|
|||||||
WEIGHTED AVERAGE ADS OUTSTANDING |
||||||||||||
Basic (Thousands) |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted (Thousands) |
||||||||||||
|
|
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
NET INCOME |
||||||||||||
|
|
|
|
|
|
|||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX EFFECT OF NIL |
||||||||||||
Change in net foreign currency translation adjustments |
( |
) | ( |
) | ||||||||
Change in deferred pension gain (loss) |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
OTHER COMPREHENSIVE INCOME (LOSS) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
TOTAL COMPREHENSIVE INCOME |
||||||||||||
|
|
|
|
|
|
Ordinary Share |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income (Loss) |
Retained Earnings |
Treasury Stock |
Total Shareholders’ Equity |
|||||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||||||
(thousands) |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
||||||||||||||||||||||
BALANCE, JANUARY 1, 2018 |
— | |||||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Other comprehensive income (loss) |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
Stock-based compensation expenses |
— | — | — | — | — | |||||||||||||||||||||||
Issuance of ordinary shares upon exercise of employee stock options and restricted stock units |
( |
) | — | — | — | ( |
) | |||||||||||||||||||||
Share repurchase |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Dividends declared (US$ |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE, DECEMBER 31, 2018 |
( |
) | ||||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Other comprehensive income (loss) |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
Stock-based compensation expenses |
— | — | — | — | — | |||||||||||||||||||||||
Issuance of ordinary shares upon exercise of restricted stock units |
( |
) | — | — | — | ( |
) | |||||||||||||||||||||
Share repurchase |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Treasury stock retired |
( |
) | ( |
) | ( |
) | — | ( |
) | — | ||||||||||||||||||
Dividends declared (US$ |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE, DECEMBER 31, 2019 |
( |
) | — | |||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Other comprehensive income (loss) |
— | — | — | — | — | |||||||||||||||||||||||
Stock-based compensation expenses |
— | — | — | — | — | |||||||||||||||||||||||
Issuance of ordinary shares upon exercise of restricted stock |
( |
) | — | — | — | ( |
) | |||||||||||||||||||||
Share repurchase |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Treasury stock retired |
( |
) | ( |
) | ( |
) | — | ( |
) | — | ||||||||||||||||||
Dividends declared (US$ |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE, DECEMBER 31, 2020 |
( |
) | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||
Net income |
||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization |
||||||||||||
Amortization of intangible assets |
— |
|||||||||||
Gain from disposal of short-term investments |
( |
) |
( |
) |
( |
) | ||||||
Gain (loss) from disposal of subsidiary |
— |
( |
) |
|||||||||
Gain from disposal of long-term investments |
— |
( |
) |
— |
||||||||
Loss on equity-method investment |
— |
— |
||||||||||
Stock-based compensation |
||||||||||||
Loss on disposal of property and equipment |
||||||||||||
Impairment of goodwill and intangible assets |
||||||||||||
Deferred income taxes |
( |
) |
( |
) | ||||||||
Changes in operating assets and liabilities: |
||||||||||||
Short-term investments |
||||||||||||
Notes and accounts receivable |
( |
) |
( |
) |
( |
) | ||||||
Inventories |
( |
) |
( |
) | ||||||||
Prepaid expenses and other current assets |
( |
) |
( |
) | ||||||||
Other assets |
( |
) |
||||||||||
Notes and accounts payable |
( |
) |
||||||||||
Refund liabilities |
( |
) | ||||||||||
Accrued expenses and other current liabilities |
( |
) |
||||||||||
Income tax payable |
( |
) |
( |
) |
||||||||
Other liabilities |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
||||||||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||
Purchase of long-term investment |
( |
) |
— |
( |
) | |||||||
Proceeds from sale of subsidiary |
— |
— |
||||||||||
Proceeds from sale of long-term investment |
— |
— |
||||||||||
Purchase of property and equipment |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) investing activities |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||
Repayments of bank loan |
( |
) |
— |
( |
) | |||||||
Proceeds from bank loan |
— | — | ||||||||||
Dividends paid |
( |
) |
( |
) |
( |
) | ||||||
Share repurchase |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash used in financing activities |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
( |
) |
||||||||||
EFFECT OF EXCHANGE RATE CHANGES |
( |
) |
( |
) |
( |
) | ||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR |
||||||||||||
|
|
|
|
|
|
|||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF YEAR |
||||||||||||
|
|
|
|
|
|
|||||||
SUPPLEMENTAL INFORMATION |
||||||||||||
Interest paid |
— |
|||||||||||
|
|
|
|
|
|
|||||||
Income taxes paid |
||||||||||||
|
|
|
|
|
|
|||||||
Disposal of FCI |
||||||||||||
Total consideration |
— |
— |
||||||||||
Other current assets |
— |
( |
) |
— |
||||||||
Cash and restricted cash disposed |
— |
( |
) |
— |
||||||||
|
|
|
|
|
|
|||||||
Proceeds from sale of subsidiary |
— |
— |
||||||||||
|
|
|
|
|
|
|||||||
Non-Cash Investing and Financing Activities: |
||||||||||||
Unpaid purchase of property and equipment included in accounts payable and accrued liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Dividend declared included in accrued expenses and accrued liabilities |
||||||||||||
|
|
|
|
|
|
Year Ended December 31, 2018 |
Year Ended December 31, 2019 |
Year Ended December 31, 2020 |
||||||||||||||||||||||||||||||||||
US$ |
US$ |
US$ |
||||||||||||||||||||||||||||||||||
Foreign currency items |
Defined benefit pension plans |
Accumulated other comprehensive income (loss) |
Foreign currency items |
Defined benefit pension plans |
Accumulated other comprehensive income (loss) |
Foreign currency items |
Defined benefit pension plans |
Accumulated other comprehensive income (loss) |
||||||||||||||||||||||||||||
Beginning balance |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Current-period change |
( |
) | — | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Ending balance |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Cash |
||||||||
Time deposits |
||||||||
Repurchase agreements |
||||||||
|
|
|
|
|||||
Total cash and cash equivalents |
||||||||
Restricted cash |
||||||||
|
|
|
|
|||||
|
|
|
|
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Trading securities |
— |
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Trade accounts receivable |
||||||||
Allowance for doubtful accounts |
( |
) | ( |
) | ||||
|
|
|
|
|||||
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Allowance for doubtful accounts |
||||||||||||
Balance, beginning of year |
||||||||||||
Additions (reversals) charged to expense, net |
||||||||||||
Write-offs |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Balance, end of year |
||||||||||||
|
|
|
|
|
|
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Finished goods |
||||||||
Work in process |
||||||||
Raw materials |
||||||||
|
|
|
|
|||||
|
|
|
|
Percentage of Ownership |
December 31 |
|||||||||||||||
2019 |
2020 |
2019 |
2020 |
|||||||||||||
US$ |
US$ |
|||||||||||||||
Equity securities measured at cost: |
||||||||||||||||
Cashido Corp. (Cashido) |
% | % | — | — | ||||||||||||
Vastview Technology, Corp. (Vastview) |
% | % | — | — | ||||||||||||
Deep Vision, Inc (Deep Vision) |
% | % | ||||||||||||||
|
|
|
|
|||||||||||||
|
|
|
|
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Assets held for sale |
||||||||
|
|
|
|
|||||
|
|
|
|
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Cost: |
||||||||
Land |
||||||||
Buildings |
||||||||
Machinery and equipment |
||||||||
Furniture and fixtures |
||||||||
Leasehold and buildings improvement |
||||||||
Software |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Accumulated depreciation: |
||||||||
Buildings |
||||||||
Machinery and equipment |
||||||||
Furniture and fixtures |
||||||||
Leasehold and buildings improvement |
||||||||
Software |
||||||||
|
|
|
|
|||||
Prepayment and construction in progress |
||||||||
|
|
|
|
|||||
|
|
|
|
December 31 |
||||||||||||||||
2019 |
||||||||||||||||
US$ |
||||||||||||||||
Cost |
Accumulated Impairment |
Accumulated Amortization |
Net Carrying Amount |
|||||||||||||
Acquisition-related intangible assets |
( |
) | ( |
) | — |
December 31 |
||||||||||||||||||||||||||||||||||||||||
2019 |
2020 |
|||||||||||||||||||||||||||||||||||||||
US$ |
US$ |
|||||||||||||||||||||||||||||||||||||||
Cost |
Disposal of FCI |
Accumulated Impairment |
Foreign Currency Adjustment |
Net Carrying Amount |
Cost |
Disposal of FCI |
Accumulated Impairment |
Foreign Currency Adjustment |
Net Carrying Amount |
|||||||||||||||||||||||||||||||
Goodwill |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — |
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Refund liabilities |
||||||||
|
|
|
|
Year Ended December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Refund liabilities |
||||||||
Balance, beginning of year |
||||||||
Additions |
||||||||
Actual sales return and discount |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Balance, end of year |
||||||||
|
|
|
|
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Wages and bonus |
||||||||
Dividends |
||||||||
Research and development payable |
||||||||
License fees and royalties |
||||||||
Professional fees |
||||||||
Equipment |
||||||||
Lease liabilities – current portion |
||||||||
Others |
||||||||
|
|
|
|
|||||
|
|
|
|
December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Change in benefit obligation |
||||||||||||
Projected benefit obligation at beginning of year |
||||||||||||
Service cost |
||||||||||||
Interest cost |
||||||||||||
Actuarial loss (gain) |
( |
) | ||||||||||
Benefits paid |
( |
) | ( |
) | ( |
) | ||||||
Disposal of subsidiary |
— | ( |
) | — | ||||||||
|
|
|
|
|
|
|||||||
Projected benefit obligation at end of year |
||||||||||||
|
|
|
|
|
|
|||||||
Change in plan assets |
||||||||||||
Fair value of plan assets at beginning of year |
||||||||||||
Actual return on plan assets |
||||||||||||
Employer contributions |
||||||||||||
Benefits paid |
( |
) | ( |
) | ( |
) | ||||||
Disposal of subsidiary |
— | ( |
) | — | ||||||||
|
|
|
|
|
|
|||||||
Fair value of plan assets at end of year |
||||||||||||
|
|
|
|
|
|
|||||||
Funded status recognized as an other liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Net loss |
||||||||||||
|
|
|
|
|
|
|||||||
Total recognized in accumulated other comprehensive income |
||||||||||||
|
|
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Service cost |
||||||||||||
Interest cost |
||||||||||||
Projected return on plan assets |
( |
) | ( |
) | ( |
) | ||||||
Amortization of unrecognized net transition obligation and unrecognized net actuarial gain |
||||||||||||
|
|
|
|
|
|
|||||||
Net periodic benefit cost |
||||||||||||
|
|
|
|
|
|
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Recognize the decrease in net gain (loss) |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total recognized in other comprehensive loss (income) |
— | |||||||||||
|
|
|
|
|
|
US$ |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026 and thereafter |
2018 |
2019 |
2020 |
||||||||||||||
Taiwan |
Korea |
Taiwan |
Taiwan |
|||||||||||||
Weighted-average assumptions used to determine benefit obligations: |
||||||||||||||||
Discount rate |
% | % | % | % | ||||||||||||
Rate of compensation increase |
% | % | % | % | ||||||||||||
Weighted-average assumptions used to determine net projected benefit cost: |
||||||||||||||||
Discount rate |
% | % | % | % | ||||||||||||
Expected long-term return on plan assets |
% | % | % | % | ||||||||||||
Rate of compensation increase |
% | % | % | % |
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Current |
||||||||||||
Deferred |
( |
) | ( |
) | ||||||||
Income tax expense |
||||||||||||
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Domestic |
( |
) | ( |
) | ( |
) | ||||||
Foreign |
||||||||||||
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Tax expense at statutory rate of Cayman |
||||||||||||
Differences between Cayman and foreign statutory tax rates |
||||||||||||
Permanent differences |
( |
) | ||||||||||
Temporary differences |
( |
) | ( |
) | ||||||||
Alternative minimum tax |
||||||||||||
Income tax on undistributed earnings |
||||||||||||
Net changes in income tax credit |
||||||||||||
Net changes in valuation allowance of deferred income tax assets |
( |
) | ||||||||||
Net operating loss carryforwards |
( |
) | ( |
) | ( |
) | ||||||
Liabilities related to unrealized tax benefits |
( |
) | ( |
) | ( |
) | ||||||
Adjustment of prior years’ taxes and others |
( |
) | ( |
) | ||||||||
Income tax expense |
||||||||||||
December 31 |
||||||||
2019 |
2020 |
|||||||
US$ |
US$ |
|||||||
Notes and accounts receivable |
||||||||
Stock-based compensation |
||||||||
Allowance for sales return |
||||||||
Inventory reserve |
||||||||
Foreign currency translation |
( |
) | ||||||
Property and equipment |
( |
) | ( |
) | ||||
Investment tax credits |
||||||||
Net operating loss carryforwards |
||||||||
Others |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Balance, beginning of year |
||||||||||||
Increases in tax positions taken in current year |
||||||||||||
Decrease in tax position taken in prior year primarily related to the resolution of tax audit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance, end of year |
||||||||||||
|
|
|
|
|
|
Tax Jurisdiction |
Tax Years | |
China |
||
Hong Kong |
||
Taiwan |
||
United States |
2018 |
2019 |
2020 |
||||||||||||||||||||||
Dividends Per Share (US$) |
Amount (in US$ thousand) |
Dividends Per Share (US$) |
Amount (in US$ thousand) |
Dividends Per Share (US$) |
Amount (in US$ thousand) |
|||||||||||||||||||
First quarter |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Second quarter |
$ | $ | $ | |||||||||||||||||||||
Third quarter |
$ | $ | $ | |||||||||||||||||||||
Fourth quarter |
$ | $ | $ | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||
|
|
|
|
|
|
Unit (in Thousands) |
||||
Available for grant at January 1, 2018 |
||||
Restricted stock units granted |
( |
) | ||
Restricted stock units forfeited |
||||
|
|
|||
Available for grant at December 31, 2018 |
||||
Restricted stock units granted |
( |
) | ||
Restricted stock units forfeited |
||||
|
|
|||
Available for grant at December 31, 2019 |
||||
Restricted stock units granted |
( |
) | ||
Restricted stock units forfeited |
||||
|
|
|||
Available for grant at December 31, 2020 |
||||
|
|
Number of Non-vested Stock Units (in Thousands) |
Weighted Average Grant Date Fair Value (US$) |
Weight Average Remaining Recognition Period (Years) |
||||||||||
Non-vested at January 1, 2018 |
||||||||||||
Restricted stock units granted |
||||||||||||
Restricted stock units vested |
( |
) | ||||||||||
Restricted stock units forfeited |
( |
) | ||||||||||
|
|
|
|
|||||||||
Non-vested at December 31, 2018 |
||||||||||||
Restricted stock units granted |
||||||||||||
Restricted stock units vested |
( |
) | ||||||||||
Restricted stock units forfeited |
( |
) | ||||||||||
|
|
|
|
|||||||||
Non-vested at December 31, 2019 |
||||||||||||
Restricted stock units granted |
||||||||||||
Restricted stock units vested |
( |
) | ||||||||||
Restricted stock units forfeited |
( |
) | ||||||||||
|
|
|
|
|||||||||
Non-vested at December 31, 2020 |
||||||||||||
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Cost of sales |
||||||||||||
Research and development |
||||||||||||
Sales and marketing |
||||||||||||
General and administrative |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
Operating Lease Obligations |
||||
Fiscal Year: |
||||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026 and thereafter |
||||
|
|
|||
Total |
||||
Less imputed interest |
||||
|
|
|||
s |
||||
t |
||||
|
|
|||
s |
$ | |||
|
|
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Mobile Storage |
||||||||||||
Mobile Communications |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
Year Ended December 31 |
||||||||||||
2018 (1) |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Taiwan |
||||||||||||
United States |
||||||||||||
Korea |
||||||||||||
China |
||||||||||||
Malaysia |
||||||||||||
Singapore |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
(1) | In 2019 and 2020, revenue billed to Japan was reclassified to others. |
Year Ended December 31 |
||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||
US$ |
% |
US$ |
% |
US$ |
% |
|||||||||||||||||||
Intel |
* | * | ||||||||||||||||||||||
Micron |
* | * | ||||||||||||||||||||||
SK Hynix |
* | * | * | * |
* | Less than 10% |
Year Ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
US$ |
US$ |
US$ |
||||||||||
Taiwan |
||||||||||||
United States |
||||||||||||
Korea |
||||||||||||
China |
||||||||||||
Japan |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
US$ |
US$ |
US$ |
US$ |
|||||||||||||
Assets |
||||||||||||||||
Short-term investments — trading securities |
— | — |