The flash memory card and USB 2.0 flash drive (UFD) markets will experience explosive growth from 2003 to 2008. Based on IDC report, the compound annual growth rate (CAGR) shows 38.2% growth in flash memory card market, with $8.2 billion in revenue and 716 million units. The USB 2.0 flash drive (UFD) market posted 39.7% growth with 124.9 million units.

In addition, the digital audio MP3 player market has shown tremendous growth. According to IDC report, the worldwide portable flash MP3 player market is expected to grow from 22 million units in 2004 to over 50 million units in 2008 and the worldwide portable jukebox (HDD) market is expected to grow from 8 million units in 2004 to over 25 million units in 2008.

Similarly, the multimedia co-processor market has shown fast growth due to the continued strong demand for wireless access to digital multimedia and communication. According to IDC report, the worldwide shipment in 2004 was over 100 million units and expects to grow to 300 million units in 2008.

As the adoption rate for mobile phone grows, unit shipments for flash cards will increase tremendously. New applications such as games, entertainment, and education will have huge growth potential.

In the UFD market, the number of suppliers has been growing, especially in China. Both retail sales and PC bundle sales will continue to post significant growth; nevertheless, territory battles and price competition will become more severe. Additional features such as software for MP3, data rescue, quick photo viewing, security will be the much needed differentiation and will become standard requirement rather than added features.

Although customers are demanding greater capacity and improved performance from their flash cards and UFDs, they also expect new product releases to have more features for an equal or lower price than previous generations. To achieve this, OEM customers are looking for solutions that can shorten product development cycles and feature flexibility, along with improved power management and cost structure.

Our Solution

We develop comprehensive system solutions, including a system-on-chip, firmware, and software. Our system solutions are designed to enable our customers to provide a leading-edge, feature-rich, solution.

Key elements of our solutions:

• High Performance. By utilizing our advanced flash management algorithm with optimized hardware, we achieve high performance levels that enable our customers with quick data transfers from UFDs to PCs and continuous captures of still images/video clips where real-time capture is critical, while still maintaining high accuracy.
  
  
• Significant Cost Saving and Flexibility. We provide a significant lower total cost of system solution than our competitions because our silicon is compatible with a wide range of flash memory, including SLC and MLC from Samsung, Toshiba, Renesas, Hynix, ST. Furthermore, we have enormous lists of host devices which our silicon has passed full compatibility. This will ensure the end-user customers the best user experience. By using our solution, customers can have the flexibility of using the least expensive flash memory while still maintain the world class compatibility assurance.
  
  
• Targeted System-On-Chips. Our system-on-chip solutions are specially designed for the flash memory controller and UFD markets. Parallel processing engines that allow multi-tasking, such as real-time data writes, background erases, and ECC handling.
  
  
• Wide Range of Key Technology. Our technologies focus on low-power in storage, USB, I/O, audio, graphics and video. This allows our customers to provide distinguished products to the market ahead of their competitors.

Our Strategy

Our objective is to become the world's leading supplier of ICs for flash memory cards, USB flash drives and multimedia solutions. Key elements of our strategy to achieve this object include:

• Maintain our leadership in flash memory card and UFDs by continuing to innovate and develop leading edge product with high performance and rich features.
  
  
• Expand our customer base, while securing additional design wins with existing customers.
  
  
• Pursue opportunities in the developing markets for value-add UFDs by expanding our core technology and beyond in audio, picture, and video.
  
  
• Pursue strategic alliances and acquisitions.
  

Corporate Information

We were incorporated in California in November 1995. Since 2002, we were merge with Feiya technology in Taiwan, and are now headquartered at No.36, Taiyuan St., Hsinchu, Taiwan and our telephone number is +886-3-552-6888. Our web site is www.siliconmotion.com.