Silicon Motion Inc. (SIMO) Message Board

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Technology Stocks : Silicon Motion Inc. (SIMO)

SIMO 92.20

+1.3%

Dec 5 9:30 AM EST

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To: Sam who wrote (2480)	4/8/2022 4:14:16 PM
From: Elroy	Read Replies (1) of 2980

You could be describing Micron which has also been doing great as far as their business is concerned but the stock has languished. MU also have massive capital spending requirement to maintain it's strong current position. It needs to spend BILLIONs to make 1.2 BILLIONS, something like that. SIMO has no such capital spending needs, their biggest expense is just salary. If the outlook turns sour for SIMO, they can just downsize XX% of their employees, and voila, they are at the same level of operating profits. MU can't do that, they gotta spend on the future regardless, and then just hope. The two are in the same industry (memory semiconductors), but very different business models. They should trade in the same way. SIMO is closer to a software company (all intellectual property, the value is in the IP and the staff), while MU is a capital intensive manufacturer (a chip factory, that needs SIMO's software for their final product to function). SIMO is MSFT Windows, MU is Dell! Or Gateway!

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