Good day, and thank you for standing by. Welcome to Silicon Motion Technology Corp.'s third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised, today's conference is being recorded. This conference call contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding trends in the semiconductor industry and our future results of operations, financial condition, and business prospects. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends and our results may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, continued competitive pressure in the semiconductor industry and the effect of such pressure on prices, unpredictable changes in technology, and consumer demand for multimedia consumer electronics, the state of and any change in our relationship with our major customers, and changes in political, economic, legal, and social conditions in Taiwan. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements, which apply only as of the date of this conference call. Now I'd like to hand the conference over to Mr. Jason Tsai, VP of Investor Relations and Finance. Please go ahead, sir. Thank you, and good morning, everyone, and welcome to Silicon Motion's third quarter 2023 financial results conference call and webcast. Joining me today is Wallace Kou, our President and CEO. Wallace will first provide a review of our business, key business developments, and I will discuss our third quarter results and outlook. Following our prepared remarks, we will conclude with a Q&A session. Please note that Riyadh Lai, our CFO, will not be joining us on today's call. Riyadh worked intensively on the merger with MaxLinear over the last 15 months, while continuing to manage all the CFO responsibilities. He is now devoting his time to preparing for the arbitration against MaxLinear. As a result, I was asked to lead our investor-related activities. We will then conclude with Q&A. Before we get started, I would like to remind you of our safe harbor policy, which was read at the start of this call. For a comprehensive overview of the risks involved in investing in our securities, please refer to our filings with the U.S. Securities and Exchange Commission. For more details on our financial results, please refer to our press release, which was filed on Form 6-K after the close of market yesterday. This webcast will be available for replay in the investor relations section of our website for a limited time. To enhance investors' understanding of our ongoing economic performance, we will discuss non-GAAP information during this call. We use non-GAAP financial measures internally to evaluate and manage our operations. We have therefore chosen to provide this information to enable you to perform comparisons of our operating results in a manner similar to how we analyze our own operating results. The reconciliation of the GAAP to non-GAAP financial data can be found on our earnings release issued yesterday. We ask that you review it in conjunction with this call. As we have previously shared, Silicon Motion filed its notice of arbitration against MaxLinear for its willful and material breaches of the merger agreement that was signed on May 5th, 2022. The company is seeking payment of the termination fee of $160 million, further substantial damages, interest, and costs. Please note that the arbitration process is confidential, and we will therefore not be commenting further on this matter today. With that, I will turn the call over to Wallace. Thank you, Jason. Hello, everyone, and thank you for joining us today. It's good to be speaking with you again after such a long break to provide an update on the progress we have made over the past year and a half. Since our founding nearly three decades ago, the strength of our business and the fundamental drivers of our growth have always been our technology leadership and the quality and depth of our customer partnership. Today, this statement has never been truer. Silicon Motion Technology leadership continues to enable us to win sockets and grow our share as NAND makers. At the same time, it drives them to rely on us more each day, to outsource more in order to target a wider range of end markets that their own R&D does not have the bandwidth to support. Our relationship with our module maker customers continue to deepen to our broad portfolio of solutions, enabling them to be the most competitive in their respective end markets. Our technology leadership also paves the way for us to expand into additional markets like enterprise and data center storage, automotive, commercial, industrial, and IoT. Now that it's clear that we will remain a standalone company, we, our engagement with our customers have been steadily increasing as well. Our unwavering focus on technology leadership will be what continue to drive our growth longer term, and ensure our partnership with both NAND maker and module maker alike remain strong. With that, I will turn to our results for the third quarter. Our business continued to gain momentum, with the revenue growing 23% sequentially to $172 million, and earnings per ADS growing 57% sequentially to $0.63. We saw inventory level begin to normalize across the majority of end markets, and OEM order activity pick up in the third quarter, leading to our strong revenue growth in the quarter. We expect this trend to continue, and are confident they will lead to strong sequential growth in the fourth quarter. While the first half of 2023 was challenging due to the global macroeconomic weakness and excess inventory in the channels, the inventory level across our end market are normalizing and OEM demand continue to improve. Today, I'm pleased to say that we are shipping to more customers than ever before, working with all the major NAND makers on the multiple engagement across several end markets, and expanding our footprint among market-leading module makers with the innovative solution for the smartphone, PC, automotive, industrial, commercial, and enterprise markets. We continue to invest in our technology leadership, and in coming quarter, expect to introduce several industry-leading solutions for SSD and embedded market that will drive sustainable long-term, profitable growth for our business. QLC NAND is essential to further improve affordability of solid state storage, but also poses greater challenges to overcome relating to worsening endurance, reliability, data integrity, and performance. As the flash makers continue to roll out next-generation, higher density 3D QLC NAND with 200-300+ layers, controller technology requirements are scaling up significantly, requiring the use of more sophisticated LDPC, as well as our proprietary 3D RAID technology, for better error correction and recovery, data protection and reliability. These next-generation controllers will require finer design and manufacturing processes to deliver a much higher performance while maintaining the same low power consumption as the previous generation solutions. We invest early in supporting QLC NAND, and Silicon Motion have more experience managing the technology than any other company in our industry. Our leadership in these areas are second to none, especially in the merchant market. We expect to continue to maintain our leadership in the market with these next-generation solutions, and win meaningful share of the new product with all NAND flash makers, as well as all the leading module makers. By end market standpoint, excess inventory in the PC and smartphone markets have plagued the industry since late 2022, when the global economy weakened and demand slowed. It has taken nearly a year, but we believe the inventory level in both the PC and smartphone market are normalizing. We are seeing more consistent order pattern from our customer and better visibility that are more closely aligned with end market demand. We are optimistic that this trend will continue, and that the industry is well positioned to return to growth in 2024. Now, let me discuss our SSD controller business. Our SSD controller business grew 5%-10% sequentially in the third quarter. We are beginning to see the PC market rebound and believe that the replacement cycle of corporates that purchased notebooks in the early days of COVID are beginning. This should lead to stronger PC demand in the coming months. For the current PCIe Gen 4 SSD market, we just began shipping our Gen 4 controller to our newest Korean NAND maker customer for their PC OEM customers, and we're now supplying our SSD controller to all but one of the major NAND makers. Our large, expanding NAND customer base and our strong share with all the leading module makers continue to position us well in the PC OEM and channel market for SSD. We expect Gen 4 SSD to continue to be the majority of the PC SSD market through 2025, and PC OEM will begin adoption of PCIe Gen 5 SSD for high-performance PC in 2025, when Intel and AMD adopt standard in notebooks. This PCIe Gen 5 SSD will enable much higher data bandwidth and performance that will be critical for next generation PC, and will also enable new capability such as AI at the Edge, and will eventually become standard. We already secured design win with all the flash makers that are outsourcing controller to merchant supplier and expect to begin shipment in late 2024. Our first Gen 5 controller is tape out in this quarter and will serve the high-performance market with an 8-channel solution using TSMC's 6-nanometer technology. That will deliver unparalleled performance and low power consumption. PC OEM expects significantly higher performance with Gen 5 SSD. But at the same time, power consumption is, Gen 4 SSD, requiring us to move 6-nanometer process technology to achieve both high performance as well as low power consumption requirements. With the new SSD controller, ASP will be nearly double that our comparable 8-channel Gen 4 SSD controllers. We expect to tape out our second PCIe Gen 5 controller, our 4-channel solution, in the second quarter of next year and begin sampling in the second half of next year. We expect this solution to help expand the adoption of Gen 5 SSD into more mainstream PC in 2026. For the enterprise market, we will sample our MonTitan PCIe Gen 5 SSD controller this quarter. We are working with several enterprise and data center customers around the world, and expect to generate initial revenue in late 2024, with more meaningful revenue in 2025 and beyond. Now, moving to our eMMC and UFS business. Revenue from these products rebounded strongly in the third quarter and more than double as demand ramped ahead of the holiday season, and inventory level in the channel and smartphone OEM are normalizing. Our diversified customer base of NAND flash makers and module makers have expanded our share with the leading handset OEMs. UFS 3.1, as well as the UFS 2.2 solution, remains the dominant interface for smartphones, and we continue to win new programs with both flash makers and module makers. UFS 4 is only adopted by flagship smartphone today, and we do not expect to see adoption of UFS 4 into mainstream smartphone until 2025. We are working on our own UFS solution, also using 6-nanometer process technology, to deliver higher performance while maintaining the same power consumption as the UFS 3.1. We expect to tape out the product in early January and start sampling in the first half of 2024, with mass production expected in early 2025. We are already engaged with the flash makers as well as the module maker, targeting leading handset OEM, and on track to meet their expected ramp for UFS 4 in 2025. We are also seeing expanding use case of eMMC and UFS beyond smartphones, and have significant wins already in the automotive, IoT, commercial, and industrial market with NAND makers as well as module makers. We believe we are well positioned to continue to see our eMMC and UFS business to continue to grow in 2024 and beyond. We have talked a lot about expanding use case of solid state storage, and I would like to highlight a particular end market as an example of our success in diversifying our business. In the automotive market, our embedded and SSD's controller, as well as our Ferri SSD, are making significant progress with the flash makers and the module makers. Targeting storage for central vehicle control unit, infotainment, dashboard, and ADAS functions. We are shipping our controller to two flash makers already, and in development with two additional flash makers for solution targeting this market. Our Ferri SSD are already shipping to several top car makers, including two of the largest Japanese automakers. As we said, we see significant opportunity beyond just smartphone and PC to continue to grow our business, and the success we are seeing in the automotive market across all our product groups is a good example of the traction we have been making. Overall, we are pleased by the progress we are making despite microeconomic headwinds for the industry this year. Our focus on our technology leadership has yielded strong customer traction, strong share in the market we serve, and diversify the end market our products are using. Combined, we expect all of this to drive growth in 2024 as the end market and the NAND flash industry economy improve. Now, I will turn the call over to Jason to discuss our financial results and our outlook. Thank you, Wallace, and good morning, everyone. I will discuss additional details for our third quarter results and then provide our guidance. Please note that my comments today will focus primarily on our non-GAAP results, unless otherwise specifically noted. A reconciliation of our GAAP to non-GAAP data is included with our earnings release issued yesterday. In the third quarter, we grew sales 23% sequentially to $172 million. SSD controller sales grew 5%-10% sequentially. eMMC and UFS controller sales more than doubled sequentially, as we benefited from ramping holiday season build and normalizing inventory levels. SSD solution sales decreased 5%-10% sequentially. Gross margins in the third quarter were stable sequentially and remained at 42.5%. Operating expenses in the third quarter were $49.5 million, $1.5 million higher than the prior quarter, primarily from higher R&D expenses to support our technology leadership. Operating margin in the third quarter was 13.8%, an increase from 8.3% in the second quarter. Our effective tax rate in the third quarter was 22.8%, an increase from the 12.7% tax rate in the second quarter. Earnings per ADS were $0.63, 67% higher sequentially. Stock-based compensation in our operating expense, which we exclude from non-GAAP results, was $3.8 million in the third quarter. We had $350.3 million of cash, cash equivalents, restricted stock, and short-term investments at the end of the third quarter, compared to $305 million at the end of the second quarter. Inventory decreased again sequentially in the third quarter to $199 million from $251 million in the second quarter. Earlier this week, our board declared a new annual dividend of $2 per ADS. The first $0.50 installment will be paid in November. Now, let me turn to our fourth quarter guidance and forward-looking business trends. In the fourth quarter, we expect revenue to be up 10%-15% sequentially, to approximately $190 million-$198 million. We expect SSD controller sales to be stable in the fourth quarter, while eMMC and UFS controller sales will increase. Fourth quarter gross margins is expected to be stable and be in the range of 42.5%-43.5%. Fourth quarter operating margin should be in the range of 13.5%-15.5%. Fourth quarter effective tax rate to be approximately unchanged from the third quarter, and in the fourth quarter, we expect stock-based compensation in the range of $6.2 million-$7.2 million. Let me provide some additional color to our fourth quarter expectations. Our business will continue to rebound in the fourth quarter, and sequential revenue growth is expected to be stronger than normal seasonality. Our gross margins are expected to be flat to up slightly. We expect our gross margins to improve gradually over the next few quarters as the financial health of the NAND makers and the memory market overall slowly improves. Most of our NAND maker and module maker customers have been selling NAND products below their cost since early this year, and even with the sharp increases in NAND prices we've seen lately, it is still challenging, especially for NAND makers. Our pricing is somewhat reflective of our customers' challenges, and as their financial conditions improve, we believe we can gradually improve our pricing and our margins, but it will take time. Our cost of goods, especially wafer prices, remain high, but we believe we can extract some additional manufacturing cost improvements over the next few quarters as well. Combined with an improving mix of new products, including the new—our new Gen 4, PCIe Gen 4 and 5 controllers and UFS 4 solutions, we believe we can gradually return to our historical gross margin levels. For operating expenses, as Wallace mentioned, we will be taping out three new 6-nanometer controllers, our 8-channel PCIe Gen 5 controller this quarter, our UFS 4 controller in the first quarter, and our four-channel PCIe Gen 5 controller in the second quarter. The total investments to get each of these products to market is more than $15 million. So we expect our operating expense to be elevated for these three quarters and then come down a bit in the second half of next year, driving additional operating margin leverage. As Wallace mentioned, our business is steadily improving as end market demand stabilizes and inventory levels normalize. We'll continue to invest to maintain our technology leadership with best-in-class, next-generation storage controllers. Our broadening product portfolio and diversified customer base will further solidify our strong foundation for continuing revenue and profitability growth. We are optimistic that industry conditions will improve and believe we are well-positioned to benefit from these improving market dynamics. This concludes our prepared remarks. We will now open the call to your questions. Operator? Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Mehdi Hosseini from SIG. Please ask your question, Mehdi. Yes, thanks for taking my question. Two for me. First, in terms of technology migration among the NAND manufacturer, I wanted to better understand how increased adoption of QLC is helping you, and how should we compare that to end market system unit trend? That, in other words, how a smartphone, notebook unit would fare against migration to QLC. And my second question has to do with a strong cash, and what would it take for a company to, or for the board and the company to become more aggressive in a stock buyback? So let me answer your first question, Mehdi. Regarding QLC, we see the trends. All NAND maker going to have a QLC NAND and product by late 2024. So we see QLC initially all transition to client SS D, and we believe in 2025, probably value line, more than 80% of value line SSD, will all adopt QLC in 2025. And we, we've seen the QLC transition to mobile phone will take time, and I, I believe the leading smartphone maker, which will try to adopt QLC, but when it's going to be mass production, when will create a meaningful volume, we don't know yet, and all the NAND maker is trying to explore the opportunity. ... But we also believe QLC will enter data center sometime in 2026 or 2027. That's why QLC become very, very important, and it become the major output for the NAND maker up to 2026 or 2027. Mehdi, to answer your second question about the share repurchase. You know, as you know, our share repurchase program has been opportunistic in the past. We do not have a program in place today, but the board is always evaluating ways of returning cash to shareholders, and share repurchase is something that they will continue to look at. Just, if I may, just a quick follow-up to Wallace. Let me rephrase my first question. Let's say, if units of a smartphone and notebook were to go flattish next year, could the migration to QLC for client SSD drive growth? Is that something that could provide additional growth drivers? I think that we believe, our customer will gain market share in 2024, although the total unit for PC might not grow very much, maybe just a single digit, 2%-3%. Because our strong technology in QLC and supporting with our major controller for both Gen 4, Gen 5, are going to helping us to transition to take additional market share in 2024. Great. Thank you. Thank you. Our next question comes from the line of Quinn Bolton from Needham and Company. Please ask your question, Quinn. Hey, guys, congrats on the nice results and outlook. I guess maybe first, Wallace and Jason, can you just maybe expand on your outlook for gross margins? I know you're looking for sort of a gradual recovery as the market improves, but you know, can you give a little bit of shape to that gradual? Is that sort of 50 basis points a quarter? Is it 100 basis points a quarter? What kind of trajectory would you see, and any thoughts on when you might get back to kind of a 48%-50% gross margin would be helpful. Yeah. Yeah, so look, you know, obviously, as you know, there are still a lot of challenges in the NAND flash industry. NAND makers are still struggling, economically, and our goal is obviously to continue to gradually improve our gross margins and get back to where historically we were. And as the industry's health improves, we believe our pricing, our gross margins, will also improve. And as we roll out new products, you know, the new products that we talked about, just a little while ago, right? Some of the new PCI Gen 4 and Gen 5 and UFS 4 controllers, as those come out to market, that'll also have an uplift to our gross margins. Yeah, but we haven't provided specific guidance for next year, and certainly as we move into January and report our fourth quarter, we'll have a better view on what that longer-term gross margin profile looks like for next year. Great. And then just, you know, looking forward to the, kind of the eMMC and UFS market, can you kind of give your thoughts on market share looking forward? I think one of your customers has tried to insource UFS 4. You know, does that have a significant impact on your outlook? Or do you think it's just, you know, there are some puts, some takes, but you still feel very confident about your overall market share position in UFS? Thanks. Yeah, we believe one of our major customer partners from NAND makers, they have the internal solution controller for UFS 4, since four years ago, that we know that. But, as you know, we're working closely with this particular partner, because for each of the NAND maker, their controller probably support 1-2 generation NAND. So they have, when you have new generation NAND, and that is opportunity we've taken. So we're continue to discuss a future opportunity with this customer and to expand even to the additional new legacy UFS 2.2, 3.0, 3.1, as well as the potential newer newer generation, including UFS 5.0. In addition, we have engaged multiple NAND maker, not just one, for UFS. So we are targeting a new customer and in production from late Q1 or early Q2. And so I think because our technology expanded and because there are more NAND coming to the market, and we definitely benefit for more NAND maker, which don't have internal resource, want to leverage third-party controller, like Silicon Motion, to help engage with the smartphone market. Got it. Thank you very much, Wallace. Thank you. Our next question comes from the line of Anthony Stoss from Craig-Hallum. Please ask your question, Anthony. Thank you. Wallace, you gave us some info on what you expect PC growth and that you expect to grow faster for taking share. I'm curious if you'd offer something kind of overall, including smartphones, auto, et cetera, where you think 2024 growth might be for Silicon Motion, then I had a couple follow-ups. Well, I think it's a good question, but I think we will wait for our Q4 earnings call. We'll give you guidance. But, we're definitely looking forward to continue growing in 2024. And what is scale? I think that we will give our guidance on next earnings call. Okay. And then following up on the comment on, you know, large Korean NAND maker now back in, I believe you said in Q3. Can you give us a sense of kind of design activity you have with that customer for 2024? What percentage of their share you think you'll have? ... Well, we, we're not able to comment regarding particular customer, but overall, we see significant growth opportunity with all flash makers. Although there is some potential consolidation, but we believe we'll continue to see opportunity open for Silicon Motion to grow our share with our customer. Okay. And last question for me. You know, over the last year or so, with the MaxLinear proposed deal, do you felt that some of your customers were opting or thinking about moving to their own internal solutions or external? Seems like they're reengaged. I guess I'm trying to figure out if you lost share in terms of designs, maybe for 2024 or something, just based on the MaxLinear deal and the pause that may have created. Yeah, from our legal counsel advice, we cannot comment any of MaxLinear's related question. But I think that you know very well for any conventional M&A, it definitely has certain impact for the customer. If the customer they do not understand the potential buyer, so they have some fear and concern. I cannot give you how what really impact for our business, but definitely every company have some gain, have some loss. But overall, looks like we will continue to gain market share and with more opportunity. And especially after July 26th, we do see the momentum become stronger. Perfect. Thanks, Wallace. Thank you. Our next question comes from the line of Suji DeSilva from Roth MKM. Please go ahead, Suji. Hi, Wallace. Hi, Jason. So congrats on the progress here. So, the eMMC UFS market smartphone, you had very strong results this quarter regarding for that. Just can you give a sense of the sustainability of the recovery in the end market and the demand perspective versus, you know, is the channel restocking? And are channel inventories typical levels now, or are they actually leaner than typical? Yeah, let me comment about the smartphone market based on my our view. The channel inventory is become normal and in a healthy position. We definitely see growth rebound for both eMMC and UFS product. And we also see we'll gain more share for the, UFS in 2024. And although I think you mentioned particular customers, they have internal controller, but that's a UFS 4.0. For next year, primary is still the UFS 3.1, as well as the 2.2 for, 4G smartphone. And we see we have more customers jumping into the market, and that's why we are able to gain market share. And in addition, we are working directly with the smartphone maker to tailor certain soft firmware and to specify for certain requirements. That give us an advantage compared with even NAND maker to provide the solution for a specific customer. So we're very happy for our position. I think in certain detail, if we are able to, we will release during the next quarter or two. Okay, Wallace, thank you. That's helpful. And then my other question is on the operating expenses. Jason, I think you talked about the R&D being elevated for the next two to three quarters. Can you give a sense of what it comes back to after that in the second half of 2024? Is it back to sort of the $40 million level in the second quarter, or just to understand, you know, what it reverts to after the elevated spend in the next three quarters? Yeah, you know, we'll obviously provide more color on that in the next earnings call, but it will temper back a little bit. As we said, you know, the total investment cost for each of these six-nanometer products is, you know, north of $15 million. Obviously, all of that, not that entire cost is borne in one single quarter. It does get spread out over, you know, several quarters, depending on the timeframe of the investment process into that new controller. So it will step back a little bit in Q3 and Q4 next year, but we'll provide more color on that in next quarter, next earnings call. So I can give you addition, I'll give you some reference. 6-nanometer tape out, normally that probably is about 30-40—it would be 2x-3x more expensive than 12-nanometer tape out. And we believe after the three 6-nanometer tape out, we won't have any 6-nanometer tape out within a year, but we do have additional 12-nanometer, 20-nanometer tape out, quarter by quarter. So definitely, operation expand will go down, but what the scale is, it depends the product, how many product we're going to tape out. So, I think we'll give you more color when we have the next quarter or next year guidance. Okay. Thank you, Wallace. Thank you, Jason. Thank you. Our next question comes from the line of Gokul Hariharan from JP Morgan. Please ask your question, Gokul. Yeah, hi. Thanks, Wallace and Jason, and congrats on the good rebound in the numbers. My first question is, could you give us a little bit of kind of a backdrop in terms of how your market share situation is right now for client SSD controller? Just to get an update after almost a year, or more than a year in terms of where market share is. And also, you did allude to some of the design wins in enterprise and data center. Could you give us a little bit of color on what is the size of the opportunity there, and what is the nature of engagement you have? Is it still mostly the PCIe Gen 5 controllers for enterprise market, or are there previously you had tried open channel controllers for certain segment of the market? So just wanted to understand what is the approach to kind of tap into the enterprise market and the data center market here? ... All right, Gokul, thank you. Great to talk to you again. Regarding the, our client's market share, we continue to maintain stable market share around 30%, maybe up and down a little bit, but I think we're gaining market share continually for 2024. But regarding the data center, I think the, the major enterprise product, we're shipping, meaningful is still startup. And our PCIe, really, we focus on PCIe Gen 5, because, Gen 4 controller, we're not able to show a meaningful financial result, and it's not cost competitive. But PCIe Gen 5 on Titan, we are in a very good position. We believe we will show meaningful financial result by, by end of 2024, and more meaningful in 2025. Thanks, Wallace. Could you give us a sense of how big this enterprise and data center market size is? I think I remember a few years back when you started talking about this, you indicated that it is similar size to the client SSD market in terms of controller revenue size. Any updates on how big the market is, given data center demand has really grown since then? Hey, Gokul, it's Jason here. Yeah, look, we're seeing good traction today. We're working with a number of data center and enterprise customers around the world, but it's still early. We're, you know, gonna start sampling this quarter. It's too early to say how big that opportunity is yet at this point. As we get closer to launch, as we have more concrete and better visibility, we'll be able to provide more additional details at that point, but right now, it's just a little bit early. Okay, got it. One question on pricing. Could you talk a little bit about how pricing has evolved in the last 12 months or so? Clearly, pricing seems to have come off from the $4-$5 kind of average client SSD controller ASP that you had. Do we need to wait for Gen 5 to really come through on the client SSD controllers for you to start potentially seeing some price increases coming through? Do you need to wait for the next generation for like price increases to come through? Or do you think that you can adjust price as we go along, once the market starts getting a little bit better? As you know very well, this year is very challenging for NAND flash makers as well as the controller makers. Because before September, 90% of our customers are selling product below cost. And thanks to the price increase in the last two months, and but still, many NAND maker, their cost margin is still negative. And we, Daphne, as a leading controller maker, we have to share the pain. But we believe when the NAND price gradually recover to breakeven and become profitable, our certain controller segment, and we will also gradually increase the ASP. But I think the PCIe Gen 5, 8-channel controller, as we state, the ASP is 2x than Gen 4 8-channel controller, and this will be much more competitive in helping for both gross margin and also ASP. And we also believe the PCIe, the UFS 5.0, 4.0, also will gaining help us in gaining mix regarding both gross margin as well as ASP. So we do have other new product coming and also create more positive regarding the product mix, helping our ASP and gross margin. Okay, thank you very much. Thank you. Our next question comes from the line of Matt Bryson from Wedbush Securities. Please ask your question, Matt. Yes. Good morning, guys. Thanks for taking my question. First question is, I think in the prepared remarks, you mentioned that there's still some inventory getting worked out at your customers. I guess in Q4, is the expectation with that guide that inventory is fully worked down, or is there potential that there's still some incremental revenue that you'll see in forward quarters because inventories are normalized in future periods? Hey, Matt, it's Jason here. I think we're very close to normalize inventory levels, if not there already. There may be—I mean, it varies by product by product, it varies customer by customer, end market. But by and large, we see inventory has normalized for the vast majority of the end markets and customers that we work with. Thanks. And I guess my second question is around new products. So it sounds like both in terms of returning pricing and margins to, or returning margins to more traditional historic levels, as well as potentially seeing some revenue growth tied to higher ASPs, the new products are very important. I guess is there any help you can give us in terms of thinking about how those parts roll out, either in terms of time after tape out the revenues start to become meaningful, or if you could give us some color around when you think customers start shifting to either Gen 5 PCIe or UFS 4.0 solutions, that'd be really helpful. Thanks. Yeah. So, you know, our first 8-channel Gen 5 controller is getting taped out right now. We'll start sampling that here shortly, and then we expect to start seeing shipments late 2024. UFS 4.0 is getting taped out in the first quarter. We'll start seeing shipments of that late 2024 into 2025, and then, you know, the 4-channel Gen 5 SSD controller, that's really more of a late 2025, mid- to late 2025 into 2026 type event for us. Thanks. That's all I got. Thank you. Thank you. As a reminder, to ask a question, please press star one one on your telephone. Our next question comes from the line of Craig Ellis from B. Riley Securities. Please go ahead, Craig. Hi, this is Ethan Widell calling in for Craig Ellis. Thanks for taking my questions. To start, you provided some good color on the near to intermediate-term slope of OpEx as I focus on strategic investments. I was wondering to what extent the timing of those investments is sensitive to the slope of recovery in end market demand. Thanks. I'm sorry, what's the slope of the OpEx, and how is it tied to the end market recovery? Is that what you asked? Right. Yeah. So obviously, we're seeing strength in the end markets. You know, the guidance we provided for Q4 is stronger than seasonal. And then certainly we expect to grow, continue to grow into 2024 as well. The OpEx should stay at these levels for Q4, Q1, and Q2, and then that'll come down a little bit in the second half of next year. But that's, you know, depending on the number of additional tape-outs that we'll be doing, can vary a little bit. So we'll provide more color around that, next earnings call. All right, thank you. And then, given your cash position, I was hoping that you could just broadly speak to your cash deployment plans. Yeah. So for cash deployment, as you know, you may have saw earlier this week, we instigated our $2 per year dividend. That'll be paid quarterly. The first quarterly payment will start here in November. And with regards to a share repurchase, it's something that, you know, historically, we've been opportunistic about. We don't have a program in place today, but the board is always looking at, you know, ways of returning cash to shareholders, and it's something they'll continue to evaluate. Thank you. That's all for me. Thank you. Once again, to ask a question, please press star one one on your telephone. Okay, I think, Wallace. All right. Very happy to talk to you guys. It's been one half year. Thank you everyone for joining us today and for your continued interest in Silicon Motion. We'll be attending several investor conference over the next few months. The schedule of this event will be posted on our investor relationship section of our corporate website. Thank you everyone for joining us today. Goodbye for now. That concludes today's conference call. Thank you for participating. You may now disconnect.