Good day, and thank you for standing by. Welcome to Silicon Motion Technology Corporation's Q4 2024 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session, at which time, if you wish to ask a question, you will need to press star one one on your telephone keypad. 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 all 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 your reliance on them. The statements involve risks and uncertainties, and actual market trends and all 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 effects of pressure on unpredictable changes in technology and consumer demand for multimedia consumer electronics, the state 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. Please be advised that today's conference is being recorded. It is now my pleasure to hand you over to Mr. Tom Sepenzis, Senior Director of IR and Strategy. Please go ahead, Sir. Thank you, Operator. Good morning, everyone, and welcome to Silicon Motion's Q4 2024 Financial Results Conference Call and webcast. Joining me today is Wallace Kou, our President and CEO, and Jason Tsai, our CFO. Wallace will first provide a review of our key business developments, and then Jason will discuss our Q4 results and outlook. Following our prepared remarks, we will conclude with a Q&A session. 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 consistent with how we analyze our own operating results. The reconciliation of the GAAP to non-GAAP financial data can be found in our earnings release issued yesterday. We ask that you review it in conjunction with this call. With that, I will turn the call over to Wallace. Thank you, Tom. Hello, everyone, and thank you for joining us today. 2024 was an exceptional year for Silicon Motion across multiple fronts. We delivered over 25% revenue growth year-over-year, significantly outperforming the end market we serve. Gross margin improved from 43% to over 46%, and we delivered operating margin of 15.3%, up from 11.9% in 2023, while investing heavily in next-generation solutions that will expand our opportunities, drive long-term share gains, and sustainable revenue growth. 2024 was not without challenges. However, as the consumer market saw increasing pressure in the second half of the year, weak end-user demand that began in the Q3 of 2024 persisted through the Q4, creating an unseasonably weak holiday season for PC and smartphones. Despite this, we remained focused on our execution and taped out a number of advanced controllers for SSD and UFS, leading to significant new project wins with our flash maker and module maker customers. We successfully entered the enterprise SSD market, adding six customers and beginning initial shipment of our first new MonTitan product in the second half of 2024. Additionally, we further grew our automotive business to over 5% of sales and delivering strong backlog as we entered 2025. While the smartphone and PC market will always be important, our strategy to diversify and significantly grow our enterprise and automotive business are off to a strong start, with many new projects, customers, and products expected to scale over the next few years. Flash makers are outsourcing more and becoming increasingly reliant on Silicon Motion, as they are being forced to rationalize spending given the increasing development cost for memory technology to support DRAM, HBM, and enterprise storage needs. The cost of development of a NAND controller has rapidly increased with the necessary migration to advanced process geometry solutions like 6-nanometer SSD and UFS. Flash makers' decisions on controller development have become increasingly aligned with Silicon Motion as their preferred partner. We are working with every NAND maker and winning multiple projects that range from eMMC and UFS controllers to SSD controllers for SATA PCIe 4 and 5 storage solutions, as our portfolio breadth enables them to scale in multiple markets faster and more cost-effectively. We have already built up a strong pipeline of new wins and expect more this year to further our share gains in 2026 and beyond. Now, let me give you an update on what we are seeing in the NAND industry. With consumer demand typically weak in the second half of the last year, we are seeing consumer-grade NAND pricing continue to decline, while NAND makers are starting to limit supply and scale back production given the ongoing weakness in the consumer markets and the global economy uncertainty surrounding tariffs. We do not expect NAND prices to recover until the second half of this year, when demand for both smartphones and PCs are expected to rebound. With production cuts underway at most NAND makers, the focus is to limit the supply of consumer-grade NAND while still growing the supply of the high-end enterprise-grade NAND, where demand for enterprise and data center SSDs remains healthy. For Silicon Motion, this means that we must focus our resources on NAND makers, strategic partners, and customers who have access to NAND. We must align our product cycles with our customer roadmaps and their steady progression toward each new generation of NAND. This is critical to our long-term success, and we are investing to ensure that we remain the leading merchant controller vendors across all flash makers and end markets and applications and NAND continues to evolve, and the adoption of low-cost per-bit NAND drives higher densities. QLC is becoming a bigger growth driver for NAND, big growth, as they enable NAND makers to increase density without purchasing new manufacturing equipment and enable device makers to offer higher density cost-effectively. We have more experience winning QLC than any other controller makers, whether they're merchants or captives. As the consumer market begins to rebound mid-year and with ongoing strength in the enterprise and AI server markets, we expect QLC will become an increasing part of the conversation in 2025 and beyond. Silicon Motion is the best positioned to capitalize on the growth of the new technology. Let me now discuss each of our major product segments, beginning with our client SSD controllers. For 2024, our SD controller business grew approximately 20% as compared to 2023, and our client SSD controller market share increased to over 30% as we continue to grow our share with flash makers and win additional sockets. Gartner expects the PC market to grow by nearly 5% this year, with the second half of the year much stronger than the first, driven by the sunsetting of Windows 10, the approaching COVID corporate PC refresh cycle, and bolstered by the increasing demand for AI PC. We are successfully gaining market share, and with our new project wins and backlog for high-performance TLC and high-reliability QLC controllers with flash makers and module makers. We introduced our high-end eight-channel PCIe 5.0 SSD controller last year and have secured a dominant position in the market, winning design wins with four NAND makers as well as virtually every module maker. This controller delivers best-in-class performance and substantially lower power consumption than any other solution in the market. We are gaining share in the high-end PC market with this eight-channel controller and with the win we have amassed already. We believe we are on track to capture at least half of the market over the next couple of years, driving additional share gain opportunities for us. We also received back the initial sample from our tape-out last year of our mainstream 6-nanometer four-channel PCIe 5 controller and have made exceptional progress in securing additional wins for this product with flash makers and module makers alike. We anticipate this solution to be introduced late this year and begin ramping in 2026 as PCIe 5 SSD adoption enters the mainstream PC market. The complexity of PCIe 5 controllers has increased significantly, not just in terms of process geometry but also in engineering and firmware resources. They require more complex field engineer support at our customers and with PC OEM. We are developing closer collaboration with our customers to deliver unmatched support and reliability to ensure long-term success. In addition, our existing portfolio of PCIe 4 and the SATA controller ensures that we have the right combination of solutions to serve the needs of the high-end to mainstream to cost-sensitive markets. Beyond PC SSD, our solutions for the growing portable SSD market are also taking a dominant position. We have a win in shipping with several NAND makers as well as virtually every module maker in the market. Portable SSDs are becoming increasingly popular for data backup, and our portfolio of controllers enables both high-speed and high-density solutions that are cost-effective for our customers. With our broad range of product customers and wins, we are well-positioned for growth later this year as these wins scale and the overall market demand recovers. Now, turning to our eMMC and UFS business, smartphone demand, like the PC market, remained weak as we entered 2025. However, despite this, we grew our eMMC and UFS controller business by approximately 70% in 2024 as we rebound from a very weak 2023, and we scaled with our flash maker customers, expanded share with module makers, and gained our first direct smartphone OEM for QLC UFS. We expect our customer ramp to scale in the second half of this year, in line with Gartner's current annual smartphone forecast of approximately 5%, with a strong emphasis on second-half growth after a weaker start to this year. Our team has been steadily developing new solutions and winning additional projects. The market is shifting away from the integrated eMCP and uMCP solution in the smartphone and moving toward discrete mobile DRAM. This is creating a significant opportunity for us as module makers are taking great share of the eMMC and UFS market, which is improving our position given there is a significant less competition for discrete controllers. With the lower cost involved in using discrete LPDDR4 mobile DRAM, there is greater competition, which in turn leads to flash makers outsourcing third-party controllers like SMI to compete in value line mobile storage solutions such as eMMC and UFS 2.2 and reduce R&D development costs. In addition to our existing UFS 3.1 controllers supporting the latest generation NAND, we expanded our portfolio with multiple new product introductions. These include a new eMMC 5.1 for low-end smartphones, smart devices, IoT, and automotive, a new cost-effective UFS 2.2 controller to capture its mainstream market, and the new single-mode UFS 4.0 controller that we taped out last year, which is currently sampling, expected to begin initial ramp in the second half of this year. eMMC remains about half of the 1.8 billion annual unit market for eMMC and UFS today, and 70% of eMMC market is a non-smartphone application like set-top box, smart TV, automotive, and IoT, while smartphones will continue to account for less and less of the eMMC market as UFS adoption increases. For UFS, the vast majority are for smartphones today, while non-smartphone applications primarily going into automotive applications are growing at a much faster rate. While the overall smartphone market may be mature, we see tremendous opportunity as we expand with the flash makers and the module maker partners into these additional opportunities. Our broad portfolio allows us to deliver solutions to our customers that address the expanding needs of the market and gain further share. Now, turning to our enterprise MonTitan platform, we made remarkable progress in 2024 and are well-positioned for strong growth in the enterprise storage market for us long-term. When we started 2024, we had targeted winning two tier-one customers. We won those two customers in the Q1 of 2024 and increased our target to four customers for the year. I'm happy to report that we added four additional customers and now expect this sixth customer to ramp later this year. Four new customers have a long history of supporting tier-one and tier-two enterprise and CSP in the U.S., Europe, and Asia, further expanding to the reach and adoption of the MonTitan family of enterprise controllers. We began early shipment and generated revenue in the second half of 2024, and we remain confident that with our current mix of customers and our expanding family of MonTitan solutions, we can achieve our target of 5% to 10% of our total revenue by the 2026 to 2027 timeframe. MonTitan represents one of the largest greenfield growth opportunities for Silicon Motion in the coming years, given the large addressable market for TLC and TLC NAND within the AI server enterprise and data center storage markets. Growing interest in our unique MonTitan platform is driven by our leading experience in QLC and TLC NAND, our dominant position in the merchant controller market, and our ability to deliver a wide range of firmware capabilities to meet the unique needs of different customer applications and use cases. We are expanding our capability with the MonTitan family of solutions in 2025 through the development of additional controllers and a more comprehensive suite of firmware and software to address a broader range of opportunities for our customers. We plan to offer a more complete family of solutions to customers, including controllers for SATA and PCIe 5 server boot drives, higher-performance and higher-density second-channel and eight-channel PCIe 5 controllers for enterprise storage and servers, and we are already engaged with new customers and developing next-generation PCIe 6 controllers. This, combined with our existing advantages, including our flexible firmware stack options, unique ASIC architecture, high capacity, leading performance, and Performa Shape technology, delivers a compelling enterprise-class portfolio that is unmatched by our competition. With MonTitan supporting the upcoming 2-terabit mono-die QLC NAND, we will be able to deliver high-density, high-performance 128TB SSD with a best-in-class random read of 3.5 million IOPS that will be ideally suited for AI applications. This combination of capacity and performance will deliver faster training in AI applications, save power, and lower the total cost of ownership. Lastly, let me give you an update of the progress we are making in the automotive market. We support a multi-market across all our product categories. We have win for our SATA PCIe 4 SSD controllers, our eMMC and UFS controllers, as well as our Ferri embedded solutions across a variety of use cases in vehicles. From traditional cars to new-generation software-defined vehicles, there is a significant increase in processing capability: sensors, cameras, CPUs, and ECUs. With this new capability, the need for more memory is growing rapidly. Despite a mature overall automotive market, as the complexity increases, the need for more robust capability significantly increases, and that's why ASPICE certification is becoming more critical and more differentiated. We are proud to be the only supplier with a PCIe 4.0 controller to achieve ASPICE Level 3 certification, significantly increasing our lead over the competition. We are already shipping into all major tier-one automotive customers, including Mercedes, Tesla, General Motors, BYD, Xiaomi, Toyota, Honda, and several others, including the leading automotive Uncertain in the world. While we have been growing automotive wins for the past several years, it is now beginning to scale meaningfully and reach 5% of our revenue in the Q3 of last year. We are confident it can ramp approximately 10% of our revenue by 2027, given our current slate of customers and wins and expected ramp of new products. In conclusion, as we enter 2025, despite the near-term broader market headwinds, we remain extremely well-positioned for future growth as we are growing share within our existing markets and expanding into new high-growth markets, including enterprise SSD controllers, automotive, IoT, and others. We have an incredibly strong portfolio of new products in our pipeline that will help drive long-term share gains and improve our product diversification, including our PCIe Gen 5, UFS 4.0, ASPICE certified automotive-grade PCIe Gen 4, and of course, MonTitan. As our MonTitan and automotive business continues to scale for the next several years and our broad portfolio of solutions for IoT, industrial, commercial, and smart device applications continue to gain share, I'm confident that our strategy to diversify beyond the maturing PC and smartphone market will be successful, and I believe we could see 20% of our business in 2027 coming from this new opportunity. Given the strength of existing customer wins and expected second-half recovery in the PC and smartphone market, we expect to exit 2025 with an annual revenue run rate of close to $1 billion in the Q4. I look forward to sharing more about our success with these products and new markets throughout this year. Now, let me turn the call over to Jason to go over our financial results and outlook. Thank you, Wallace, and good morning, everyone, for joining us today. I will discuss additional details of our Q4 results and then provide our outlook. 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 December quarter, sales decreased 10% sequentially to $191.2 million and within our guidance range despite weaker end-user demand for PCs and smartphones. Gross margins increased for the seventh consecutive quarter to 47% as we are benefiting from improved product mix as we continue our shift towards customers to newer solutions. Operating expenses declined by over 10% sequentially to $58.3 million in the December quarter due to the timing of tape-out costs that elevated our September quarter R&D expenses, and operating margin improved sequentially from 16.1% to 16.5% in the December quarter at the high end of the guided range. Earnings per share was $0.91, down slightly from the $0.92 in the Q3. Total stock-based comp, which we excluded from non-GAAP results, was $9.7 million in Q4 2024. We had $334.3 million in cash, cash equivalents, and restricted cash at the end of the Q4 compared to $368.6 million at the end of the Q3. Cash declined in the quarter primarily due to changes in working capital driven by higher accounts receivable that typically trend higher in the Q4 and lower accounts payable due to timing of payments in the quarter. We see these as short-term impacts to our cash balance. Inventories decreased again to $201.2 million at the end of the Q4 from $214.6 million at the end of the Q3 as we continue to work down our inventory levels. While our end markets grew in low single-digit range last year, we increased revenue by 26%. We were able to significantly improve profitability, driving gross margins 300 basis points higher for the year, exiting the year at 47%. Operating margins increased by more than 300 basis points as well, despite our significant investments in two new 6-nanometer controllers, increased R&D headcount, and continued development for our MonTitan business. As we enter 2025, the ongoing consumer weakness remains compounded by global economic uncertainty driven by potential tariffs and other challenges which are limiting near-term demand, growth, and visibility. Despite this, our teams have been steadily developing new solutions, winning new customers, and expanding our end market reach. Additionally, our teams have been extremely effective in delivering new products, driving the expansion of our opportunities in new and emerging markets within the enterprise, automotive, industrial, and commercial markets. We are optimistic that despite the near-term environment, through the combination of our strong customer pipeline, new product introductions, and expected second-half recovery in the consumer markets, we're well-positioned for a strong second half of the year. Now, let me discuss our Q1 outlook. Revenue is expected to decline 12.5% to 17.5%, in line with the near-term expectations for the PC and smartphone end markets. Gross margins should continue to expand as we continue to transition customers to newer products and expect gross margins to be in the range of 47% to 47.5% in the March quarter. Operating margin is expected to be in the range of 7.7% to 9.7% given the seasonal revenue impact, but we expect this will rebound quickly throughout the year. Our effective tax rate is expected to be 16%, and stock-based comp and dispute-related expenses are expected to be in the range of 7.5% to 8.5%. Moving forward, to remain consistent with our semiconductor peers, we will no longer release preliminary results at the end of each quarter. We will only pre-announce results when they are expected to differ significantly from our outlook. We will, however, continue to provide qualitative view of our full year, but will not be providing specific guidance. To that end, while the PC and smartphone end markets are expected to grow in the low-mid single digits this year, demand is expected to be significantly second-half weighted, with the first half expectations more muted than normal. We believe that our business in 2025 will reflect the broader industry dynamics, with significant growth expected in the second half of the year. This should allow revenue to grow in the mid-single-digit range for 2025 as demand rebounds and our new products begin to scale. As Wallace mentioned, we believe our revenue for the Q4 this year will approach close to the $1 billion annual run rate. As we saw through 2024, we expect to continue to steadily improve our gross margins throughout this year as new projects and new products scale. Gross margins have historically been in the 48% to 50% range, and we are confident that we will exit the year towards a higher end of that range. For operating expenses, we expect to continue to invest in advanced geometry products that will enable us to maintain and grow our share longer term and expand into new markets to diversify our business. We expect that with these investments in technology and R&D engineers and resources, our operating expenses should grow in line with our revenue this year. We expect effective tax rate for 2025 to be approximately 16%. Full-year stock-based compensation and dispute-related expenses should be in the range of $27 to 29 million, and for the full year, we expect $65 million in CapEx, of which $29 million will be routine CapEx and $36 million will be for their new office building construction. Finally, I'd like to spend a moment discussing our capital allocation strategy. Our business has always been one that generates a significant amount of cash. Our capital allocation strategy for the excess cash our business generates has always consisted of three prongs: our dividends, share repurchases, and reinvestment for growth, both organically and through acquisitions. Our dividend policy has been the cornerstone of our capital return strategy since we initiated our first dividend in 2013. Our dividend has gradually increased over the past decade from $0.60 per ADS annually initially to now $2 per ADS annually. We anticipate this will continue to be a significant part of our capital return strategy and will look for opportunities to further increase the dividend longer term as our business continues to scale. We have complemented our dividend with share repurchase programs from time to time, and as you saw from our press release yesterday, the board has authorized a new six-month $50 million share repurchase program. The near-term challenges in the end markets do not reflect our views on our own long-term opportunity, and our board feels that this is a good time to authorize a new share repurchase program. On the reinvestment front, we have occasionally acquired to expand our markets, and this continues to be something that we look at consistently. The industry is highly focused on enterprise today, and our exposure to the enterprise is through our internally developed MonTitan family of solutions. We're constantly evaluating additions to the segment through inorganic means to expand our breadth and scale in this rapidly growing market. It's too early to discuss potential targets. We do see ample opportunities to further diversify business and growth longer term. All three prongs of our capital allocation strategy will remain important drivers for us to continue to increase our shareholder value, and I look forward to regularly updating you on our progress. I would like to conclude by saying that we are pleased by our backlog and wins for this year. Our investments continue to deliver new opportunities and additional share that will drive long-term revenue growth. We anticipate the current market weakness to be short-lived and anticipate a strong rebound in the second half of the year. This concludes our prepared remarks. We will now open the call to your questions. Operator. Thank you. We will now begin the question and answer session. To ask a question, please press star one one on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. We will now take our first question from the line of Mehdi Hosseini from SIG. Please ask your question, Mehdi. Thanks for taking my question. A couple of follow-ups. Jason, how should we think about the OpEx, especially 2025, and then to what extent you are going to increase R&D, and what should we assume for CapEx in 2025? And one follow-up for Wallace. Thanks for all the detail regarding your strategy, but all the NAND manufacturers that have reported over the past couple of months, they've all talked about a secular trend where bit demand is decelerating. NAND market is no longer demand-elastic. And given that the enterprise, as you highlighted, would only be 10% of your revenue in 2026, 2027. W hat are some of these specific changes in strategy or other markets that you're evaluating? I want to better understand your options, optionality here, especially as the NAND market matures. Thank you. So to answer the first part of your question, Mehdi, from an OpEx standpoint, we talked about revenue growing for us this year in line with the end markets that we serve. So you're looking at kind of low-mid single digits there. OpEx should grow roughly in line with that. The majority of our growth in OpEx is going to come on the R&D side. Our sales and marketing G&A should remain relatively flat. And so the increase in OpEx is really going to be driven by increased development costs, higher headcount on the engineering side, etc. From a total CapEx for the year, we're looking at about $65 million, of which about $29 million is for routine CapEx, which is software, testing equipment, etc., and then $36 million is to finish up our new office here in Hsinchu. Okay, Mehdi, let me answer your question. First of all, I want to say this. We believe the NAND makers scale back regarding the under-investment, especially for consumer products. It also gives us tremendous new opportunities to grow because lately, in the past six months, we have more projects than we can develop for the NAND makers. This is a great opportunity for us to continue to gain market share for Client SSD and mobile controllers. Beyond that, we also want to grow heavily for enterprise and automotive business. Automotive, because they take a longer term, and so we won't see the immediate and strong rebound in this year. We are confident we said we'll be seeing double from now to 2027. For enterprise, we have a strategy. I think we're growing, hiring more R&D for enterprise storage, now cover high performance, high density, as well as a boot storage from both the US and China market. In the same time, I think we evaluate because we are building a new team for SerDes and mixed signal development. And this team is developed for all the high-performance connectivity with the storage together. I cannot give more detail. Certain developments we consider will be internally. Certain we consider to do acquisition. Some we could do the joint development with third party. So this is in being discussion, and I think when the products mature, we're going to have a press release to our investors. Thank you, And also one more thing, Mehdi, in terms of MonTitan and automotive growing to each roughly 5% to 10% of our business by 2027, that's not a final target, right? We do expect that to continue to grow longer term. That is just the first waypoint for you guys in the relatively medium term. Just quickly, I think you said that the incremental revenue contribution from these new areas would be about 20% of revenue by 2027. Did I hear that correct? That's correct. That's correct. Okay. Thank you. Thank you. We will now take our next question from the line of Craig Ellis from B. Riley Securities. Please ask your question. Yeah. Thanks for taking the question. Good evening, team, and congratulations on the way you executed 2024 and how you're starting 2025. Wallace, I wanted to start going back to some of your comments on MonTitan in the enterprise SSD area. Great to see customer expansion to six customers. What I'm hoping you can do is share with us some color on what you'd expect in the back half of this year on a couple of parameters. One, give some color around which of the customers, maybe not by name, but just characterize who are going to be the leaders and when would early shipments start and when would the latter of the six customers start to ship, and maybe help us understand how you see the volume potential across those customers and how that plays out. Just enrich the view of what's coming with enterprise SSD, please. So we do have a tremendous interesting opportunity. And currently, we secure six customers: two Tier 1, one US and China. The other is really enabling and supporting Tier 1, Tier 2 customers in both the US and China. Now, for Tier 1 customers, the firmware development, really, they need to tailor their own development. So they take time. But initial production will be on late this year and will gradually ramping. Normally, it takes about six months for a ramp to reach a high level. So we expect they will start to ramp on late this year, and you're going to see the high volume reach a more meaningful volume by mid of 2026. The same for the China customers. I think they also have a dedicated customer and for the firmware development. For others, four customers, some use our turnkey solution, some use a joint development format. So these, we also have very limited resources to support main customers. But important for us to expand for the other business is our turnkey solution needs to be full mature ready. Then we can use the same solution and one or two dedicated names to expand to for the business. We see many, many customers, especially from the US, really demand high-density QLC. For China side, the majority is TLC, from 32 to 64TB. But US all have high density and 64 to 20TB. So this needs a tremendous time. But because we really don't see near-term competition and we really need to deliver results, it just needs time to deliver results. We believe the ramping could be much higher and faster than we plan right now, but just we want to be patient and to see the fruitful result next year. That's really helpful color, and we'd certainly appreciate it if it was much higher and much faster. I wanted to move on to another question that was really related to the back half of the year. So it's really helpful to get the color that in the calendar 4 Q, the business could be operating at a $1 billion annual revenue run rate. The question is this: from first-half levels, as we work through soft PC and smartphone demand, etc., how would you force rank the growth drivers half on half within the business, either Client SSD, UFS, MonTitan, etc.? Help us understand how we get from where we are now to that billion-dollar run rate level. Yeah. So, major growth driver from our business this year depends on PCIe 5, 8-channel high-end product line. Currently, we are just in the very small volume, and we will start to ramp from second quarter. And I believe in Q3 will be meaningful volume because this is including four NAND makers and almost a half dozen module makers. And this is a higher ASP. I can only tell you it's more than $10 per ASP. So the driving will be much stronger. And our mobile controller is also going very fast. And because we are engaged, it's a multiple NAND maker as well as module maker, primarily from low-end eMMC UFS 2.2 and moving to 3.1. Our high-end UFS 4.0 also will start to ramp in Q4. So I think the major we have multiple major programs, and just we really it's just a timing project transition. I hopefully we are not suffering the really seasonality, but we do have many, many multiple major projects pipelining in our hands. That's why we're confident we have a $1 billion run rate by Q4 this year. That's very helpful. Thanks, team. Thank you. Our next question comes from the line of Quinn Bolton from Needham & Company. Please ask your question. Hi, this is Nick Doyle for Quinn. Thanks for taking our questions. How are you thinking about the gross margin target of 48% to 50% through the year? It sounds like this PCIe 8-channel will really be a big driver there. So is that the main tailwind or maybe any other end market expansions getting to that higher end of the range like you mentioned? Thanks. So PCIe 5, 8-channel, that's new to the market. So for notebooks this year, probably just about 5%. But the majority also moved to desktop and the gaming PC and the PC workstation. And we have confidence we can own more than 50% of the high-end market for PCIe Gen 5 and with the momentum. And I think next year, PCIe Gen5 high-end will grow to 10% of the notebook. And so this is where our four-channel for mainstream also will start to ramp up by late this year and early 2026. So I think the PCIe Gen5 2026 will have roughly around 20% to 30% market share. And in this, that's just a thing. We see the pipeline transition in favor of Silicon Motion because we have a much more design pipeline in our hand. Just a transition. And sometimes it depends on each of the NAND maker customers, their NAND allocation. Sometimes they allocate more for enterprise, for data center. Sometimes they need it for the consumer, for PC OEM. But when we have multiple NAND customers and the module maker support both channels and the PC OEM, we feel very comfortable to do that. In addition, I think our UFS, even value line UFS controller, and also new UFS 4.0 controller, also margin is above our corporate average. That's why this would help for our average gross margin to work to 48% to 50% by year-end. Thanks. Which of the NAND providers is the biggest competitor in the auto market, and what's your geographic exposure? It was definitely helpful to hear some of those customers. But just wondering if you're more leveraged to the share gainers versus the share takers. Thanks. We cannot comment on our NAND partner because we work with every NAND maker for specific project development. I think every NAND maker has a different strategy. They have different planning. They also have an R&D resource allocation. Some move more to HBM. Some move more to a different category. So we cannot comment from time to time. However, we always want to be sure when they do outsourcing to third party, Silicon Motion is the best candidate there. Thank you. Do you have a follow-up question, Quinn? No. Thank you. Thank you. Now, we will take our next question from the line of Suji Desilva from Roth Capital. Please ask your question, Suji. Hi, Wallace. Hi, Jason. So just expounding on the 2025 guidance, the $1 billion run rate exiting the year, what's a typical 2H versus 1H sort of split for a year? And this year sounds like it's more back-end loaded. Just trying to get a sense of maybe how much more back-end loaded this year is versus a typical year. And if maybe you could touch on inventory and if the channel inventories are in good shape or whether you're starting to see any build there, that'd be helpful. Yeah. Typically for us, you're looking at a roughly kind of 45/55 split between first half, second half. It's going to be much more second half loaded this year compared to kind of previous or normalized year. From an inventory basis, we don't see really a whole lot of excess inventory in the channel. We see our customers ordering roughly in line with end market demand. So we think channel inventory remains healthy, and we don't see that as an issue as demand ramps up. Okay. Great. Thanks, Jason. And then maybe a longer-term strategic question on the diversification strategy, the multi-year plan here. Maybe Wallace or Jason, you give us a framework of what areas you've been in, areas you've divested, you've acquired in the past. What areas would kind of make sense from a strategic perspective? Any color there would be helpful. So I think we focus now in the mixed signal design and also that relate to enterprise because we see the storage and connectivity. They are very closely coupled. So certain areas, I think we can share internal technology. And as well as we try to acquire some important technology we don't have in-house, we can do joint development. We might acquire if it's appropriate to do so. So this is an area we're seeing. That's all around the enterprise area. Okay. Thanks, Wallace. Thanks, Jason. Thank you. As a reminder, to ask a question, please press star one one on your telephone keypad. Our next question comes from the line of Matt Bryson from Wedbush. Please ask your question, Matt. Thank you. Just starting off with one more on 2025. I know it's back half loaded, but typically, you tend to see seasonality lead to a pickup in Q2, Q3, Q4. Can we assume that Q1 should represent a bottom in terms of revenue for the year? Yeah. Yeah. We certainly believe so. Q2, we do expect to see sequential growth throughout the year. And obviously, that sequential growth is going to be much stronger in the back half of the year relative to Q1, Q2. Okay. And then I guess my second question is about future M&A strategy. If there happens to be an M&A, I guess the question would be, can you give us any idea of what you'd be looking for in terms of kind of necessary metrics around returns or opportunity to pull the trigger on M&A versus it seems like Silicon Motion has so many opportunities moving forward and is so undervalued. I guess it seems that you have a pretty high bar to go out and acquire a company versus buying back your own stock given where the valuation is today, I guess. And I want some comfort that M&A in the past hasn't necessarily quite worked out as well as you'd hope, that we might not see another Shannon, for instance. I think our M&A is focused on core technology and focused on core business to grow. So this is not something we just want to buy the company to grow the revenue. We really want to build around the Uncertain (possibly 'enterprise storage', 'enterprise breadth', or 'enterprise SSDs'). So because we are starting to win design with our major customers, we also found out there's several key components around, and we are able to also make a similar product, but we are lacking some key elements. This is an area we have evaluated whether we're able to win and grow faster and the market is big enough, and we have the value to do so. This is an M&A where we have been more strategic to expand our core technology and key product for our customers. We do have end customer committed, and we will move to that direction. Also keep in mind, Matt, as I said, our capital allocation strategy is three-prong, right? Dividend will still continue to be the primary part of that. Then the share repurchase is something that we have done from time to time, and the press release yesterday certainly being one of those times. Got it. So it sounds like, though, if you step forward with acquisitions, you'll have certainty in some sense around there's this additional opportunity, and this is the right way to go versus partnering or building internally. And so you'll see the ROI will be relatively clear to the investment community assuming you move in that direction. Yeah. And I would say that, look, we're always evaluating the best ways in which we can use a large amount of cash that we generate to generate shareholder value, right? Acquiring complementary technologies and businesses that offer additional growth or technologies that add to our existing products, as Wallace pointed out, has always been part of our strategy. And we'll also be looking at it if there are right targets, but nothing imminent, nothing particularly specific right now. It's obviously something that we continue to evaluate. But in the meantime, the dividend and time-to-time repurchases are going to be the primary ways of returning capital shareholders. Awesome. And I just have one more. So great to hear that you guys signed four new customers versus the two you promised on or you talked to on MonTitan exiting Q4. I guess you were also talking previously about MonTitan being 10% of revenue roughly in 2027. I guess what would you need to see to be able to lift that metric given it does sound like things are moving really well now? Yeah. Look, I mean, we're still early in the process here, right? I mean, we're beginning to scale. We started shipping last quarter. We're obviously very optimistic about the wins that we have and the interest that we've generated. Until we start seeing this scale more meaningfully, we'll stick with the 10% target in 2027 for now, and as we have more data points to Wallace Kou's point, we can scale that faster and larger, and we have the data points to support that. We'll obviously want to bring that to your attention sooner rather than later when that's available. Awesome. Thanks again. Thank you. Thank you. I am showing no further questions. I'll now turn the conference back to Mr. Wallace Kou for closing comments. Thank you, everyone, for joining us today and for your continued interest in Silicon Motion. We'll be attending several investor conferences over the next few months. The schedule of these events will be posted on the Investor Relations section of our corporate website, and look forward to speaking with you at these events. Thank you, everyone, for joining us today. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect.