Good day. Thank you for standing by. Welcome to the Silicon Motion Technology Corporation's Q1 2026 Earnings Conference Call. 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 this 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. With that, I'll now hand you over to Mr. Tom Sepenzis, Senior Director of Investor Relations and Strategy. Please go ahead. Good morning, everyone, and welcome to Silicon Motion's Q1 2026 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 Q1 results and outlook. Following our prepared remarks, we will conclude with a Q&A session. Before we begin, 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 the 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, and thank you for joining this call today. I'm pleased to report another quarter of better-than-expected result, highlighted by record revenue of $342.1 million. Operating margin both exceeded our guidance. The stronger than anticipated revenue drove improved overall profitability. We saw strong performance across embedded eMMC and UFS, as well as our Ferri-series and BlueJay solutions, driving solid growth this quarter. Following an exceptional start and given our current pipeline of win across all our markets, I'm confident that we will deliver meaningful growth throughout what should be a record revenue year for Silicon Motion. Now, let me first address the current market environment. The memory and the storage market continue to create significant challenges across the market in which we operate. NAND prices continue to rise sharply with a sequential increase of about 55%-60% in the Q1 of 2026. AI adoption has driven significant demand across all memory and storage technologies, including HBM, DRAM, NAND, and HDD. Growing demand from hyperscaler and cloud service provider for AI infrastructure deployment, combined with a low NAND bit growth and the insufficient DRAM capacity, have led to significant scarcity. Nextly, impacting many markets include smartphone and PC, particularly in the low end. Despite these challenges, we executed well in the Q1 with our backlog design win and new opportunity ramping throughout the year. We are confident in our ability to deliver solid growth. We have spent many years developing deep relationships with the NAND flash makers, which have allowed us to gain share as NAND makers outsource more of their controller requirements. These strong relationships have also allowed us to secure NAND in the difficult environment as we ramp our Ferri-series and Enterprise BlueJay business and help our module maker and AI smart storage system customers secure NAND. Making us an even more valuable and strategic partner. While we expect the NAND shortage will remain challenging throughout 2026 and 2027, we have never been better positioned. We will continue to benefit from the fundamental shift by the NAND maker toward higher end and higher capacity enterprise and data center solution, driving a greater reliance on Silicon Motion to serve the consumer market and opening a new opportunity in automotive and lower density storage solution. As a company, we are at the start of a wholesale transformation as we scale our new Cloud AI opportunity with our enterprise MonTitan controller and BlueJay storage products, which will drive meaningful growth to both our top and bottom line going forward. We are also benefiting from our Edge AI opportunity, including smartphones, PC, automotive, IoT, and other application where we are seeing a rapid shift toward next generation storage capabilities. Silicon Motion playing a pivotal role with an expanding pipeline of products spanning Edge AI and Cloud AI platform in 2026 and beyond. Given our current backlog and design win pipeline, we expect sequential growth across our product portfolio in 2026 as we capitalize on our investment, gain share in existing market, and benefit from our diversification strategy, starting with another strong sequential quarter of growth of 15%-20% in June. I will now discuss our embedded eMMC and UFS business, which include controllers for smartphone and other IoT and connected devices. AI is fundamentally reshaping how memory and storage maker are allocating capital. Memory and storage maker are increasingly redirecting internal resources toward DRAM, HBM, and other high-performance memory technologies for AI workload, and stepping back from edge market, including phone and other smart devices. For the Q1, our mobile business was up between 30% to 25%, 35% sequentially and over 140% year-over-year, significantly outperforming the industry as share gain further fuel strong growth for our business. The mobile market is undergoing a rapid shift as NAND manufacturer accelerate the outsourcing of controller to third party, especially Silicon Motion. Some NAND makers are also finding increasingly attracted to monetize wafer rather than investing in development of complete eMMC and UFS solutions for smartphone. Module maker have stepped in to fill this gap, and they rely heavily on Silicon Motion controller and the firmware. Our relationship with the NAND supplier and our ability to assist our module maker customer in securing NAND put us in the best position to benefit from the rapidly shifting landscape in the mobile market. Looking ahead, the smartphone market is likely to stay pressured due to ongoing NAND and DRAM supply constraints. Chinese handset OEM are expected to face greater headwind than Apple, given Apple's purchasing scale and Samsung given its captive memory supply. At the start of the year, we projected global smartphone unit volume would decline by 5% to 10% in 2026. Recent estimates suggest the decline could be more than 10% year-over-year, with a greater weakness concentrating in China. Importantly, much of this unit pressure is occurring at the low end of the smartphone market, where we have limited exposure. Elevated memory and storage costs make it increasingly difficult to produce low-cost smartphone, a dynamic we expect to persist through at least the end of 2026 to 2027. Our eMMC business remains stronger than expected, driven by multiple markets, including automotive, smart TV, AI glasses, smart watches, next-generation set-top box that demand higher capacity storage and many others. The market for eMMC is large and growing at over 900 million units sold every year. With major flash maker essentially gone from this segment, competition is decreasing and our revenue contribution from this market is growing. Based on our current backlog, customer forecast and continuing share gains, we expect another very strong year of growth in our embedded eMMC and UFS business, with share gains dramatically outpacing the macro pressure on smartphone unit sale. Moving on to our SSD business, which include Edge SSD and enterprise controllers. In the Q1, our overall SSD controller business revenue declined approximately 10% sequentially, in line with the seasonal trend, but was up approximately 45% year-over-year. As we benefited from the early impact of PCIe Gen5 on our mix and early ramp of our MonTitan controllers. For our Edge SSD business, our client SSD controller utilized in a variety of products, including PC, gaming console, and PC workstation. The PC market has been a challenging area so far this year, given supply constraints and high prices associated with both NAND and DRAM. PC manufacturers are lowering specification for new computers and passing on higher NAND costs to consumer, which we expect will contribute to overall unit decline in the PC market in 2026, especially at the low end. Fortunately, for Silicon Motion, our product span market from value line to the high end, and we continue to gain share across the range of devices as the NAND market makers exit the consumer segment. 2026 will be a defining year for our client SSD business. PCIe Gen5 began to displace older technologies. Our 8-channel PCIe Gen5 controller leads the market in performance and ramped steadily throughout 2025. While we expect a DRAM supply constraint to limit growth of this high-end controller in 2026, it is still highly sought for its unmatched power and performance. In December, we launched our 4 -channel DRAM-less PCIe Gen5 controller aimed at the mass market. We expect this to become the volume-leading PCIe Gen5 chip in our portfolio this year. This controller brings PCIe Gen5 performance to a broader audience at a more accessible price point and remove a significant component hurdle for our customer at a time when DRAM availability is constrained and the costs are elevated. We have our NAND flash maker customer for each of our PCIe Gen5 controller well as nearly all the module maker expected to drive high ASP and improve margin in our client SSD business throughout 2026 as PCIe Gen5 grow as a percentage of our sale mix. Entering this year, we estimate that the PC market will experience unit decline of 5% to 10% in 2026, given the tightening NAND and DRAM supply and increased prices. Current expectations are being lower. We anticipate unit decline now in the 10%+ range. Despite this, we expect to grow our Edge SSD business through a combination of increased market share and higher ASP as our PCIe Gen5 controller continue to ramp and as NAND flash maker retreat from edge market in favor enterprise and cloud AI. For our MonTitan enterprise controller business, our cloud AI opportunity in the data center and AI infrastructure are growing rapidly. We are in the early inning. NAND is an essential part of enterprise and AI infrastructure deployment, spanning warm storage, compute storage, and increasingly near-CPU and near-GPU storage applications. The need for speed, lower latency, greater power efficiency is driving a technological shift in the datacenter. MonTitan is squarely in the middle of the transition. MonTitan, when paired with the TLC NAND, power high-performance CMX, KV cache, and Compute SSD using near-CPU and near-GPU environment. When paired with QLC NAND, MonTitan enable high-capacity, high-performance enterprise and AI data storage. During the December quarter, end user qualification of TLC-based and high-performance Compute SSD powered by MonTitan began with multiple customers. These qualifications have been progressing well, and these end customers are now expected to begin volume commercial ramp in the current quarter, one quarter earlier than expected. Currently, we see greater demand for TLC-based CMX, Compute, and the KV cache SSD controller than for QLC, given a slower rollout of 2 terabit NAND than initially expected. While we anticipate more initial revenue contribution to come from TLC-configured MonTitan solution, we believe QLC-configured solution will begin contributing more meaningful later this year and long term. High-capacity warm storage SSD leveraging QLC NAND will represent the largest addressable market for MonTitan. We expect to begin ramping multiple customers as broader availability of the next-generation 2Tb QLC NAND die become available from nearly all NAND maker. As supply return to more normal levels, our QLC solution offer a meaningful advantage over HDD for AI inference workload, faster access, higher speed, lower power consumption, and improving cost trajectory. I am excited to announce that our MonTitan customer plan to begin ramping of three Tier 1 Asian CSP and two U.S. Tier 1 CSP later this year, with both TLC Compute and QLC warm storage SSD solutions. In the Q3, we expect to tape out our first 4 nanometer controller, a PCIe Gen6 MonTitan controller targeting hyperscaler and CSPs. They are being developed in close collaboration with multiple partners and customers. We expect it to drive the next phase of MonTitan growth beginning in the 2027, 2028 timeframe. Importantly, we have already secured design win with multiple Tier 1 customers with volume expected to ramp meaningfully in 2028. Given the traction we are seeing and the progression of end user qualification for both TLC and QLC implementation of MonTitan, we are increasingly confident that the business will grow rapidly throughout this year and exit at our target run rate of 5%-10% of our now expanded 2026 revenue expectation, with a further growth anticipated in 2027 and beyond as our entry into the enterprise market scales meaningfully over time. Finally, I would like to provide an update on our Ferri-series and the Boot Drive storage business. Our Ferri-series and Boot Drive storage business delivered exceptionally performance in the March quarter as we began scaling several new projects in Ferri-series for automotive as well as in our emerging enterprise Boot Drive business. This business are growing rapidly this year. Sourcing NAND is becoming more critical to our long-term success. Our parallel relationship with the NAND maker has become a key differentiation and has enabled us to secure NAND from 3 different makers, which will ensure we will remain a resilient supplier of Ferri-series solution and Boot Drive for our customer despite the increasing supply constraint. NAND supply allocation for 2026 were largely finalized by all flash maker by May last year. Our ability to secure NAND has given us a meaningful competitive advantage as we are 1 of few supplier globally able to consistently source NAND to support our customer accelerating requirement. Boot Drive storage is rapidly becoming one of our most exciting growth opportunity as we are actively engaged with multiple customer to build solution that operate across a variety of platform. This includes leading DPU, Ethernet, and NVLink switches and other opportunity across different AI infrastructure architecture. In the Q4 of 2025, we began volume Boot Drive shipment to a leading AI GPU manufacturer for their current DPU product. In the Q1, we worked with that customer to qualify next-generation DPU design, as well as Ethernet and NVLink switches of their new GPU, CPU platform to be launched in the second half of this year. As our customer transition to the next generation GPU, CPU platform, our opportunity is increasing rapidly with a much broader footprint beyond the DPU Boot Drive and with the density that increased 2-4 times from the previous generation. We anticipate strong revenue contribution and growth with this customer this year and throughout 2027. In addition to this customer, we have recently won a design with the leading telecommunication infrastructure provider, and we'll be ramping initial scale with them later this year. We are also sampling with a leading search engine company for its TPU architecture as well. We will continue to develop a new Boot Drive storage device built around our leading controller to drive future growth. Our Ferri-series business is experiencing strong demand from automotive and industrial customer as the NAND maker continue to shift away from lower density solution to focus on higher ASP, higher density enterprise solution. Our more than 10 years of developing automotive-grade Ferri-series solution provides significant differentiation by offering reliable supply, proven technology, dedicated technical support, and the qualification expertise tailored to the automotive market. As a result of this investment, demand from global automotive OEM and their subsystem supplier continue to accelerate across the U.S., Europe, China, and Japan. We are gaining meaningful share, creating a strong pipeline of near-term revenue and long-term sustainable growth opportunities. In conclusion, the Q1 was exceptional, delivering our highest quality revenue at Silicon Motion as we continue to drive meaningful share growth across our markets. Despite the ongoing supply constraints and price increases associated with the NAND and DRAM, we continue to expect that we will deliver sequential growth throughout 2026 as we reap the benefit from the investment we have made over the past few years. This growth will, across all our major business, propelled by our growing cloud AI opportunity with our enterprise AI product, including MonTitan and our emerging boot drive storage business that are just beginning to ramp. We are in the strongest position in our company history with a deeper product portfolio, growing foothold in Edge and cloud AI, with multiple opportunity growing in tandem in the legacy and new markets. The successes we have made through the partnership with all the NAND makers over the past many years have given us an unparalleled advantage that we leverage this relationship to gain access to NAND supply. This relationship is a strategic differentiation for our company. I am extremely confident in our ability to deliver broad-based, sustainable growth as we scale both established and emerging opportunity across the business in 2026 and beyond. Let me turn the call to Jason to go over our financial performance and outlook. Thank you, Wallace. Good morning, everyone, for joining us today. I will discuss additional details of our Q1 results and then provide our outlook. Please note that my comments today will focus primarily on our non-GAAP results, unless otherwise specifically noted. The reconciliation of our GAAP to non-GAAP data is included in the earnings release issued yesterday. This was an outstanding start to the year for Silicon Motion as our investments over the past several years are bearing fruit. We're gaining share across our entire portfolio in a difficult macro environment and rapidly expanding into new opportunities in Edge AI and Cloud AI applications, which should continue to drive significant top and bottom line outperformance. In the March quarter, sales increased 23% sequentially and 105% year-on-year to $342.1 million, coming in well above the high end of our guided range, delivering our second consecutive quarter of record revenue. Outperformance in the quarter came primarily from our embedded eMMC and UFS controllers and strong growth in our Ferri-series and boot drive storage business. Gross margin was 47.2%, above our guided range of 46%-47% as we capitalized on new product introductions. Operating expenses increased sequentially to $99.2 million, given increased investments in our emerging MonTitan AI and enterprise SSD controller and boot drive storage solutions. Operating margin was 18.2% above our guided range, driven by higher than expected revenue and gross margin during the March quarter. Earnings per ADS was $1.58. Total stock compensation, which we exclude from non-GAAP results, was $8.4 million in Q1 2026. We had $210.9 million cash equivalents, and restricted cash at the end of the Q1 compared to $277.1 million at the end of the Q4 of 2025. Cash decreased in the Q1 due to a combination of dividend payment of $16.9 million and an increase in inventory to support our expected strong business ramp. Our team is executing exceptionally well in this challenging NAND and DRAM pricing and supply environment. We continue to invest in advanced geometry products for both our established markets and our emerging enterprise markets, including MonTitan SSD and enterprise boot drive storage solutions. These investments will continue throughout 2026 as we support the growing demand for our enterprise portfolio. For the Q2 of 2026, we now expect revenue to grow 15%-20% sequentially to $393 million-$411 million. We see strength across nearly all our product segments with an emphasis on continuing market share gains and new cloud AI opportunities with our MonTitan and Boot Drive business as they ramp. Gross margins are expected to increase sequentially to 48.5%-49.5% in the June quarter, given the product mix, assisted by greater contribution from MonTitan and our PCIe Gen5 controllers. Operating margin is expected to be in the range of 21%-22%. Our effective tax rate is expected to be 19%. Stock-based compensation and dispute-related expenses is expected to be in the range of $3.6 million-$4.6 million. 2026 is on track to deliver record revenue for Silicon Motion, with strength across all of our major product lines. We expect sequential top-line growth for the remainder of the year, with further improvements in profitability. We still anticipate additional development costs, which will drive higher operating expenses in the Q2 and Q3 s of this year, which will be more than offset by higher revenue and gross margin performance. We anticipate our full year 2026 operating margin to improve as compared to 2025, despite our higher investments this year. We're navigating the current memory and storage supply constraints and high pricing environment with remarkable success, driven by a relentless strategy of relationship building with NAND flash makers over the past 20+ years. We're also beginning to reap the benefits of our multi-year investments in eSSDs for enterprise and AI with MonTitan and our growing Boot Drive storage business beginning to ramp in volume. Our leading position in merchant controller, combined with unmatched NAND maker partnerships, will drive higher share across eMMC and UFS, client SSDs, enterprise, automotive, Boot Drives, and the high performance, high capacity enterprise and data center storage markets. We expect this will lead to significant revenue growth for Silicon Motion in 2026 and the years to come. I look forward to sharing more detail on our progress when we report next quarter. This concludes our prepared remarks. I'd like to open up for questions now. Operator? Thank you. To ask a question now, please press * 11 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press * 11 again. A moment for our first question. We will now take our first question from the line of Neil Young of Needham & Company. Please ask your question, Neil. Your line is open. Hey, everyone. Thank you for letting me ask a question. It obviously sounds like everything is supposed to grow quarter- on- quarter throughout the year, but, you know, maybe specifically looking to Q2, could you sort of rank the segments on what you think should grow the most and what you think should grow the least? Thanks. We anticipate growth, as I said, across all of our business segments. I think, you know, obviously, we've had some very strong growth in eMMC and UFS early on in the year. If you take a look at our automotive Ferri-series and our boot drives, we're just in the early stages of that ramping. We do anticipate stronger growth from those products. Certainly the rest of the other products continue to grow as well throughout the quarter. Okay, thanks. I have a follow-up. Within that eMMC and UFS business, it sounds like it's diversifying a little bit away from handsets. Could you maybe update us on, you know, the mix of handset revenue in the business versus sort of the broad markets that you talk about? Thank you. For our eMMC and UFS controller business, UFS majority is in handset, as the eMMC majority is in the smart devices such as smart glasses and IoT device, Smart TV, new set-top box, and smart door lock, and many others is going to the automotive. Although the smartphone unit shipment will decline, our overall eMMC plus UFS controller shipment will continue to grow throughout the year. Neil, we also anticipate MonTitan to begin to ramp more meaningfully in the Q2, starting the Q2 as well. That'll be another growth factor for our Q2. Okay. Thank you. Thank you. We will now take our next question from the line of Mehdi Hosseini of Susquehanna Financial Group. Please ask your question, Mehdi. Hi. This is Amy filling in for Mehdi. Thanks for taking my question. The first one is with the new SM8008 product launch in March, can you give a bit more color on the boot drive revenue trajectory? I know the contribution of revenue is small this year. How should we frame the ramp from here? What does a more meaningful contribution year look like? I have a follow-up. Thanks. We don't break out those segments specifically, but as I said before, we do anticipate boot drives and Ferri-series to be more meaningful contributors of revenue in the Q2, as well as throughout 2026. SM8008 is a boot drive controller, that is, that was introduced, and that will be part of the portfolio solutions that we have in this category of products, but we have other solutions here as well that have been ramping. I mean, let me add some comment. Well, SM8008, our PCIe Gen5 high-end boot drive controller, it primarily selling the controller and the firmware to the customer who make a boot drive solution. Our for this year, most of our boot drive solution were not based on 8008 controller. This will only ship specific to certain customer, major customer, but will start to ship by late this year. Got it. Really helpful. My next question is regarding the revenue diversification. Do you remain on target to have a 20% of your total revenue from a mix of MonTitan boot drive and auto? Yes, we are definitely will reach the goal. I think, we're quarter- by- quarter, because we didn't give a full year guidance. Wait for our next quarter, result in the guidance for Q3. Got it. Thank you. Thank you. We will now take our next question from Suji Desilva of Roth Capital Partners. Please ask your question, Suji. Your line is open. Hi, Wallace, Jason, Tom, congratulations on the progress here. You can give us some fundamental color here. Understanding how the second half versus first half-over-half revenue would be this year perhaps versus typical years. Is 50% gross margin potentially in the near future or any puts and takes there would be helpful. I think, first of all, 50% gross margin is definitely achievable, we're confident for this year. Second is, we just say quarter- by- quarter sequentially. We'll continue to grow quarter- by- quarter, but we cannot give you a% regarding first half and second half. Okay. Jason, can you remind us what a typical year is, or do you have that data? Yeah. I mean, typically we're about, 45, 55, you know, somewhere in that ballpark. Great. Thanks. My other question is around MonTitan. Can you give us an update on how many customers are ramping today that are going to ramp start near term, and how many you have or pipeline? Any update on MonTitan number of customers would be helpful. On MonTitan, we are ramping today in production with the two customers, but we are going to have five additional major customer from CSP by late this year, three from Asia, two from U.S. Excellent. Thank you, Wallace. Thanks, guys. Thank you. We will now take our next question from Gokul Hariharan of JP Morgan. Please go ahead, Gokul. Your line is open. Yeah, hi. Great results. Wallace, I just wanted to dig in a little bit on your comment about having more interest on the MonTitan solution from TLC NAND and KV cache, especially for the CMX piece of the equation. Could you talk a little bit about what has changed there, given previously, you were a lot more optimistic about the QLC NAND solution, and that was kind of like the key selling point for MonTitan, given the Silicon Motion's experience in managing QLC NAND. In addition to that, can you also talk a little bit about how is the adoption that you're seeing from a lot of these customers on the CMX solution or the previously called ICMA solution. Is that largely the five customers or at least the two non-Asia customers that you're seeing ramping up among the CSPs? Is that related to the CMX solution? Okay. You have a very long and a good question, let me try to answer one by one. First of all, because the NAND price increased dramatically and because the NAND supply is shortage and the most of the majority output and taken away by the CSP customer. Now, because the NAND price increased dramatically, the customer who originally designed with the QLC, with the 128TB, even higher capacity, they have certain drawback because the price increased almost 5-10 times compared with a year ago. It's very, very unlikely. We see more demand, either the QLC capacity reduce or they're shifting more for compute storage. As everybody know, compute storage, we say, is the Compute SSD, which is next to CPU, and the new Compute SSD, which is coined by NVIDIA CMX, content memory storage, for KV cache or AI inference, is also used TLC because latency is very, very important. We're seeing more and more customer moving to TLC with a smaller capacity, like a 4TB and 16TB, and this is really benefit for Silicon Motion because we ship more controller. For QLC, we also still have 2 customers continue and ramping later this year, and We help them to secure NAND supply. Because the QLC 2TB today, only have 3 NAND maker can provide the production, I think wait for 1 more year, we see all the NAND maker can produce terabyte QLC, availability will be better. We'll see more demand for high capacity QLC. Supply will become more normal. That's the situation we see. Regarding the CSP customer, because MonTitan are one of the unique technology called Performance Shaping, which is very, very good for AI inference. When AI inference go to KV cache, you need have manage multiple token, and our MonTitan have the architecture, can handle 4 tokens simultaneously. That's why the many, many leading customer and CSP like the great architecture. That's why we see demand is very, very high from U.S. to Asia. Got it. That's very clear. Thank you. Just on the client SSD controller side, I do notice that the strength is still very, very robust, even in a reasonably challenging PT market. Do you sense any pull-forward demand from some of these customers? This is something that we hear from some of the other vendors that even though end demand has been not that great, there's been some pull-forward demand. Customers trying to stock up inventory ahead of cost hikes and price increases. Is that something that you're seeing among your customers? Secondly, when you talk about NAND makers exiting this market, does it change the threshold in terms of what kind of market share you could eventually have of client SSD? I think previously we've talked about maybe 50% or 40%-50%. Is that threshold increasing given the industry trends that you're seeing? Okay. I think you asked a very good question. It's, as everybody knows, the NAND supply is shortage and the NAND maker allocate less SSD to PC OEM customer. This trend benefit for Silicon Motion because first of all, we get a more outsourcing project from NAND maker for PC OEM. Second, because module maker, they step up to fill the gap because we own almost majority module maker to design our controller for PC OEM. Although we see the PC unit shipment might decline 10% or more, we will continue gain market share, we see the client's business continue grow. When the PCIe Gen5 moving from high-end to mainstream PC OEM shipping more PCIe Gen5, we benefit much more. ASP higher and also we dominate for PCIe Gen5 more than 50%. We see a market share gain continually when PC OEM start to ramp the 4-channel DRAM-less PCIe Gen5 controller. Got it. Yeah. Thanks, Wallace. Thank you very much. Thank you. We will now take our next question from the line of Sebastien Naji of William Blair. Please go ahead, Sebastien, your line is open. Yeah. Thank you. Good morning, and congrats on the strong results and guidance. My first question is on the share gain momentum that you're seeing, particularly in the mobile and PC markets. How do you think about the trajectory of those share gains? In other words, have you seen maybe more meaningful share gains been front-loaded here, Q4, Q1, Q2 of this year? Or is there significantly more runway for you to keep taking share as we move into the second half and even into 2027? Our goal is continue gaining market share. When NAND maker know they have limited R&D resources and they probably will outsource more project to Silicon Motion. We try to reserve all the R&D, and we're very busy to catch all sourcing opportunity. We see we continue gain the embedded eMMC and the UFS controller business, as well as client SSD for PC OEM. Retail for client SSD almost almost gone. It's very, very low. We see the PC OEM. We have a much broader customer to provide the SSD solution to PC OEM, not just NAND maker. There'll be more module maker coming too. Great. Great. Okay. That's nice to hear. Then my follow-up is just on the boot drive opportunity. Can you just remind us what the competitive landscape looks like? Who else might be in a position to provide these types of boot drive controllers? Then relatedly, how should we think about your share in that market? Should it be higher than in some of your other sub-segments, or should it be pretty similar? Any pointers there? For our first engagement for the DPU Boot Drive 3, there will be a 3 maker provide the solution. Two other NAND maker also use a Silicon Motion controller, but different controller, different NAND, and we also with our additional different controller to support. I think through the engagement, I believe the customer will either to focus on the new generation DPU and also provide much more deeper NVLink and Ethernet, the PCIe Gen6 project to us. For the new generation boot drive, security become very critical. I believe today we are probably only one have a specific security in our ROM code and hardware in our controller. We have a unique firmware with to manage the NAND into the pseudo-SLC mode, provide specific function for the end customer. That's why we believe we probably have a majority of the new generation boot drive in this particular customer. Great. Great. Okay. Thank you very much, and congrats again. Thank you. We will now take our next question from Tiffany Yeh of Morgan Stanley. Please ask your question, Tiffany. Your line is open. Yeah. Thank you, gentlemen, for taking my question, and congrats on the great result. My first question would be, could you share with us your latest view on the TAM for the MonTitan or the overall eSSD market, and also, your targeted market share in the overall market? I have a follow-up. Thank you. We see where MonTitan now get tremendous attention and a very, very broad design win. We're very happy in our progress. We see we'll continue gain market share. We see MonTitan, even for PCIe Gen 5 and our associate product, we will grow to at least 5%-10% align with our expanded 2026 revenue and 2027. Our PCIe Gen 6 MonTitan even stronger. Even before we tape out, we have a multiple design win from Tier 1 customer, including two NAND maker and several CSP customer. This is bringing a very, very broad and the long-term commitment and the full development. We see the, our PCIe Gen 6 MonTitan also have a very, very unique technology with 16K by LDPC and support both TLC and the QLC for next generation QLC. We have a very, very broad customer waiting for the product, and we'll continue and ramping PCIe Gen 5 and waiting for PCIe Gen 6 for design win pipeline. All right. Very clear. Thank you, Wallace. My second question would be, as we see elevated material costs and also the offset costs, would you consider conduct price hike on your product to pass through all these costs to your customer? I think we've developed a very good relationship with our back-end packaging and testing, as well as our suppliers. I think our goal here is to maintain our gross margins in this 48%-50% range, and we're comfortable through our existing relationships with our suppliers as well as our relationships with our customers that we can maintain that pricing. We're not gonna go into specifics about pricing changes with customers, but we're confident that we can maintain our margin levels. Let me add a comment. At the moment, our concern is not in the price increase regarding manufacturing side. Our main concern is the ABF material for the BGA substrate, because it's very tight and supply is very limited. Identify with all the U.S. Tier 1 customer. Our operation work very hard. We work with Japan customer directly and work with all the Taiwan manufacturer. We try to overcome the challenging and manage the supply to make sure we can meet the customer demand. Thank you. Do you have any follow-up question, Tiffany? No. That's all from me. Thank you. Thank you. We will proceed with our next question from the line of Craig Ellis of B. Riley Securities. Please ask your question, Craig. Your line is open. Yeah. Thank you for taking the question. Congratulations on the great performance, guys. I wanted to ask an intermediate to longer term question. Wallace Kou, congratulations on what appears to be really significant MonTitan customer diversification through this year, and you've got Boot Drive position that seems to be broadening out significantly and next-generation drives through the year. Auto with Ferri-series is expanding nicely as well. The question is this: As we look at reports saying that memory related order pipeline is happening deep into 2027, and as you exit this year with a much broader customer and program footprint, how do you feel about supply availability next year? Are you seeing from your customers extended order visibility? If so, where is that happening? I think for this year's NAND supply is a little challenging to us. It's not because the NAND maker won't provide the NAND supply to Silicon Motion, because we provide the PO were late last year. Because the NAND maker and DRAM maker, they almost finished allocation before August timeframe. This is why we, but through our strategic relationship and deep partnership and presentation with the NAND maker, we're able to secure the full supply for 2026. For next year, we will start to provide our demand to our NAND partner in advance. We're pretty sure, and we are able to secure all the NAND we need for 2027 growth. I believe 2027, DRAM and NAND, the supply will be more severe than 2026. DRAM will get easier from late 2027 to 2028 because all the new mega fab start to ramp from second half 2027. I think Micron, the second fab in Boise, will ramp from second half 2028. I think the NAND will start to see release probably from early 2028 or second half 2028, but still in shortage. We will try to maintain the position, make sure we secure all the NAND in advance, meet our customer demand and meet the growth demand. Also keep in mind, Craig, we're sourcing from three different flash makers, so we've got a really good range of suppliers to work with. That's really helpful, guys. Thanks. Then, for the second question, I think that we're just thinking near term about how some of the hydraulics play out in the second half of the year with product-related investments. Sounds like there'll be some asset costs for PCIe Gen 6, but you're also looking for much higher revenue and higher gross margin. Can you talk a little bit more the gives and takes that we should be thinking about in the middle of the income back half of the year? Thanks so much. Yeah, you know, I think from an OpEx standpoint, we will have, you know, our OpEx obviously higher this quarter and then, you know, that'll probably tick up a little bit in the Q3 as well as some of these tape-out costs come in. Our expectation for timing is that Q4, we should have a lot less those development costs, so that'll come down. Overall, we expect to see margins continue to improve, operating margins continue to improve throughout this year. Thanks so much, guys. Good luck. Yeah. Let me add some comment. Silicon Motion procurement is not like a normal customer. We are strategic partner for NAND maker because we are a mutual business and we engage their project to many large-scale customer too. They treat us a partner, not just a normal buyer for NAND. Thank you. We have reached the end of the question- and- answer session. Thank you all very much for your questions. I'll now turn back to Mr. Wallace Kou for his closing comments. Thank you everyone for joining us today and for your continuing interest in Silicon Motion. We will be attending several investor conferences over the next few months. The schedule of this event will be posted on our Investor Relationship section on our corporate website, and we look forward to speaking with you at these events. Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your line.