Silicon Motion Sees 40% Revenue Growth in 2027 After Quarterly Jump of 131%
Key Facts
Silicon Motion expects revenue to grow by at least 40% in 2027 compared with 2026, supported by strength in its business backlog, the chief executive said on the third-quarter earnings call. Management tied the outlook to expanding demand for enterprise and AI storage solutions and new products beginning to contribute to revenue. The chief executive also said the company expects gross margin to be in the low-to-mid-50% range. Management said more detailed 2027 guidance would be issued on the next quarterly earnings call. The forecast follows rapid sales growth, with the company reporting record third-quarter revenue of $560.2 million.
Third-quarter revenue rose 24% from the previous quarter and 131% year over year, according to the company’s results. Silicon Motion said it was on track to post record annual revenue in 2026, with growth of more than 100% from the prior year. The company attributed the expansion to Ferri products used in automotive and edge AI, enterprise boot solutions, and edge and enterprise SSD controller businesses. It also said its new MonTitan products targeting enterprise and AI were beginning to ramp. These drivers point to diverging performance across product lines, as sales growth was not even across all categories during the quarter.
Sales of SSD controllers increased by between 20% and 25% in the third quarter from the previous quarter, while sales of Ferri solutions and boot drives rose between 75% and 80%. By contrast, sales of eMMC and UFS controllers fell between 10% and 15% sequentially. The divergence reflects the extent to which growth is being driven by enterprise, automotive and AI products, alongside relative weakness in other storage products. Non-GAAP gross margin was 53.7%, operating margin was 32.1%, and diluted earnings per share were $4.35 in the third quarter. These figures show profitability alongside revenue expansion, while the company is targeting a slightly higher gross margin in the next quarter.
The company said rising demand for enterprise and AI storage was taking a larger share of industry supply and pushing NAND memory prices higher. It added that manufacturers were prioritizing high-capacity enterprise SSDs amid this demand. Silicon Motion said enterprise and AI products remained in the early stages of contributing to revenue, although they had already begun supporting growth. The company places this shift within the context of its 2027 growth outlook, alongside its strong backlog. It is also developing new products targeting storage systems connected directly to processors.
Silicon Motion expects fourth-quarter 2026 revenue of between $588 million and $616 million, equivalent to sequential growth of between 5% and 10%, and non-GAAP gross margin of between 54% and 55%. On product development, the company is expected to begin sampling its next-generation MonTitan PCIe 6 controller in the first quarter of 2027. Production ramp-up of DRAM-equipped boot drives targeting the near-processor market is also expected to begin in the second half of the same year. The chief executive said the company had already secured 2027 wafer capacity at TSMC, as well as testing and assembly capacity and substrate materials. In a market snapshot reported by Investing.com on October 29, 2026, the stock fell 1.7% to $215.87, compared with a previous close of $219.61.