The?demand?in?digital?multimedia?has?created?a?significant?increase?in?consumer?and?embedded?devices?that?allow?users?to?view,?store,?share,?and?enjoy?their?pictures,?video?&?digital?music?anytime?and?anywhere.Silicon?Motion,?Inc.?is?a?fabless?semiconductor?company?that?designs,?develops?and?markets?innovative?digital?media?storage?and?mobile?multimedia?solutions?for?next?generation?portable?consumer?devices,?such?as?MP3?player,?portable?media?player,?DSCs,?mobile?phones,?PDAs,?wireless?home?media?center,?and?more.Silicon?Motion's?core?products?are?flash?memory?card?controller,?USB?flash?disk?controllers,?low?power?embedded?audio/video?DSP,?and?high?performance?multimedia?companion?graphics?controllers.?Silicon?Motion?continues?to?focus?on?delivery?of?quality?and?innovative?solutions?to?meet?growing?market?for?portable?data?storage?and?personal?entertainment?solution.?Our?IndustryThe?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.
