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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (66475)	2/9/2021 12:27:20 PM
From: Elroy	Read Replies (1) \| Respond to of 78740

whether or not it can show a compounded annual growth well in excess of 20% ..... This was the big news out of the recent conference call. SIMO predicted they will grow sales to $1 billion (from 2020's $520m) by 2023, and could do it earlier if semiconductor manufacturing weren't constrained. They have firm orders for more than $700m in 2021 and can't fulfill them all due to these constraints. SIMO's revenues go in fits and starts with share gains and share loss. They win designs which go into production 12-18 months later. They say they've won lots of share from internal controller makers at the NAND companies, and that share gain will propel the sales growth, along with natural market size increases from the replacement of disk drives with SSDs in PCs, game consoles and other devices that use disk drives. In PCs that replacement is about 70% done, but that's a good chunk left to go, and in other segments that use disk drives (game consoles, whatever) the replacement is now speeding up. So SIMO is allegedly gaining share in a growing market. They've been wrong before! But I think the announcement of the $1 billion number caught most of us off guard after five years of flattish sales. Perhaps some larger company is trying to acquire SIMO, and so SIMO management is trying to juice the stock price to get them to pay up (this is definitely possible in semis). Or maybe everybody suddenly wants more SIMO controllers? Who knows, but it's going to be more interesting next three years than it was in the past five years.