Feb 3, 2012
Operator
Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2011 Silicon Motion Technology Corporation Earnings Conference Call. My name is Edwin and I’ll be your conference moderator for today.
Operator
[Operator Instruction]
Operator
Before we begin today’s conference, I have been asked to read the following forward-looking statements. This press release 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 conditions 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.
Operator
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.
Operator
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 press release.
Operator
With that, I would now like to hand our presentation to our host, Mr. Jason Tsai, Director of IR and Strategy.
Please proceed, sir. Thank you.
Jason Tsai
Thank you very much, and good morning, everyone. Welcome to the Silicon Motion fourth quarter 2011 financial results conference call and webcast.
My name is Jason Tsai, I’m the Director of IR & Strategy. With me here is Wallace Kou, our President and CEO; and Riyadh Lai, our Chief Financial Officer.
The agenda for today is as follows
Wallace will start with a review of some of our recent business developments; Riyadh will then discuss our fourth quarter financial results and provide our outlook. We’ll then conclude with Q&A.
The agenda for today is as follows
Before we get started, I’d 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.
SEC. For more details on our financial results, please refer to our press release, which has been filed on Form 6-K after the close of market yesterday.
The agenda for today is as follows
This webcast will be available for replay on our website, www.siliconmotion.com 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 GAAP to non-GAAP financial data can be found on our earnings release issued yesterday or on our website. We ask that you review it in conjunction with this call.
The agenda for today is as follows
With that, I’d like to turn the call over to Wallace.
Chia-Chang Kou
Thank you, Jason, and thanks to everyone for joining us on our fourth quarter earning call. I’m excited to speaking to you once again to report another stronger than third quarter with revenue increasing by 6% sequentially to $67 million, this quarter revenue is our eighth consecutive quarter of sequential growth and the highest quarterly revenue in our company history.
Chia-Chang Kou
I’m also delighted to report that after growing our revenue by a stellar 32% in 2010, we grew at an even faster 69% in 2011 to deliver $224 million full year revenue, the highest full year revenue in our company history. 2011 was a phenomenal year for Silicon Motion.
2011 was also a transformational year as our growth drivers began transitioning from our core products, our card and USB flash drive controller, to our new growth products, our LTE transceivers and SSD flash embedded controllers, of which eMMC is a part.
Chia-Chang Kou
The success that we have made with our new growth products so far in entering the rapidly growing LTE segment of the smartphone market, as well as significantly expanding in the smartphone addressable market with our embedded memory controller, have positioned us nicely on longer term growth trajectory.
Chia-Chang Kou
First, let me share more about our fourth quarter result. In the fourth quarter, we delivered solid revenue growth while at the same time increasing gross margins back up to about 50%.
Our overall growth this quarter was driven by our backdrop NAND flash controller business, which accounted for 70% of our total revenue and grew 21% sequentially.
Chia-Chang Kou
Our revenue this quarter benefits from continued strength of our mobile storage OEM business together with unexpected growth from our module maker business. These trends more than offset the expected temporary mobile communication slowdown in the quarter.
As a result of solid growth and robust margin, we delivered diluted earnings per ADS of $0.47 this quarter and $1.35 for the full year. Riyadh will discuss our financial performance in greater detail later in the call.
Chia-Chang Kou
The OEM part of our mobile storage business increased by 35% sequentially and accounted for 50% of our overall flash controller sales in the fourth quarter as our NAND flash maker and Tier 1 consumer electronics OEM customer ramped device sales for the year-end holiday season.
Chia-Chang Kou
Sales of our card controller for bundled card increased sharply this quarter. We are expecting continually strong bundled sales through full year 2012, although it’s a more temporary rate of growth.
For full year 2011, our OEM sales increased well in excess of 100%. OEM sales increased from our surge of mobile storage selling in 2010 to about 45% last year.
Based on OEM programs that we have already won, we expect that in 2012, we can increase our OEM sales to over 50% of mobile storage sales.
Chia-Chang Kou
In the fourth quarter, in addition to strong OEM sales, our module maker sales also performed unexpectedly well with sales increase increasing by a solid 10% sequentially as module maker take advantage of another quarter of benign NAND flash market condition to build the memory card and USB flash drive for sales primarily targeting China and other emerging markets.
Chia-Chang Kou
In this quarter, 2 leading NAND flash maker released significant amount of TLC NAND flash inventory into the marketplace. Last quarter, as you may recall, a different NAND flash maker released significant amount of older MLC NAND flash part into the marketplace.
Chia-Chang Kou
In comparison to better visibility that we have with the OEM sales, this visibility relating to our module makers sales is more limited. Nevertheless, given the strength of our technology leadership and quality of our solutions, we are the leading controller vendor to module maker, when flash maker choose to release their memory.
Chia-Chang Kou
Our investment in R&D for leading edge controller technology continued to pay dividends as our ASP increased by 6% sequentially and 13% compared to the fourth quarter 2010. Over 65% of our controller sales are for the 2x nanometer class of NAND flash, including controller for the new 19 to 21-nanometer class of NAND.
Sales of our TLC controller increased over 60% sequentially to account for almost 50% of our overall controller sales.
Chia-Chang Kou
I would now like to update you on the progress that we have been making in our eMMC. In 2012, our embedded controllers are expected to contribute meaningfully and help drive our next leg of growth.
We began initially mass production of our eMMC controller at the end of the fourth quarter.
Chia-Chang Kou
First, with our module maker customers for our eMMC controller targeting many increased China smartphone and tablet devices, mass production of our more significant eMMC projects for our NAND flash partners will begin in the first half of 2011.
Chia-Chang Kou
We have already passed extensive design and qualification phase with our flash partners. Our eMMC solutions had been designed into several Tier 1 global handset OEMs on multiple platforms.
Testing by these OEM have so far been relatively smooth. So we anticipate that a majority of these projects will go into mass production in the first half of 2012.
Chia-Chang Kou
Our eMMC revenue ramp will accelerate over 2012 as program beginning initial production sales. Scale and new program entered production.
We have developed one of the best eMMC controller solutions in the market to-date. eMMC memory modules using our controller are compatible with the majority of smartphone and the tablet application processor today.
Chia-Chang Kou
Allowing OEMs flexibility in designing their devices, our eMMC controller roadmap improved controller for both current generation of the NAND flash as well as the future generation involving SLC, MLC and TLC NAND flash.
Chia-Chang Kou
eMMC is one of the 2 important growth drivers for 2012 and beyond. We continue to believe that eMMC will account for 25% of our total corporate revenue in a few years’ time.
The other important growth driver for us is LTE transceivers. Revenue for LTE and SSD+embedded collectively, our new growth product show on the combined basis double in 2012.
In 2011, our new growth product accounted for roughly 15% of total revenue. New growth product should scale to about 25% of total revenue in 2012 by growing over 100%.
Chia-Chang Kou
Now let me talk more about our LTE business. As per our prior guidance, our mobile communication business declined as our LTE transceivers sales reverted this quarter to a more normalized rate of growth after Samsung accelerate product build in the third quarter.
Communication revenue declined by 28% sequentially in the fourth quarter. But as we have said, this sequential correction is temporary and then we expect our communication business to grow again in the first quarter.
Chia-Chang Kou
In the fourth quarter, Samsung began shipping the Galaxy Nexus smartphone to Verizon, which is using our LTE and CDMA transceivers. We believe this is one of the best-selling smartphone in Verizon today.
Samsung is now using our LTE and CDMA transceivers in 3 smartphones and the tablet at Verizon. We are excited by the line of a new LTE smartphone that Samsung has in store for the market this year.
And we have already secured 5 design wins for Samsung LTE smartphone that are set to launch in the first half of 2012.
Chia-Chang Kou
We believe Samsung is a clear leader today in providing LTE smartphones, and we are proud to support them in leading the 4G LTE marketplace today. Overall, I am very pleased by our performance and the execution in the fourth quarter and for all of 2011 and we have just begun with our next phase of growth involving our new growth products.
Chia-Chang Kou
With that, I will now turn the call over to Riyadh to discuss our financial results and guidance. Riyadh?
Riyadh Lai
Thank you, Wallace. First, I will outline our financial results for the fourth quarter and then I’ll provide our first quarter and full-year 2012 guidance.
As Wallace had mentioned, this quarter we increased our revenue 6% sequentially and 68% compared to the same period a year ago, and delivered $67.1 million in revenue, a record high for Silicon Motion.
Riyadh Lai
In the fourth quarter, mobile storage mix was 70% of sales, up from 61% in the third quarter. Our mobile communications business decreased to account for 22% of our revenue mix in the fourth quarter, compared to 32% in the third quarter.
Multimedia decreased to 4% this quarter compared to 6% in the third quarter.
Riyadh Lai
Let me recap the performance of our 3 key product lines for the benefit of our audience. First, mobile storage.
Mobile storage revenue increased 21% sequentially and 61% year-over-year. Mobile storage shipments increased 14% sequentially and 42% year-over-year.
ASPs increased by 6% sequentially, as we sold more higher value-added controllers. Our ASPs this quarter increased 13% year-over-year, our eighth consecutive quarter of annual ASP increase.
Riyadh Lai
For full year 2011 our ASPs increased 9%, after increasing 11% in full year 2010. Over 65% of our controller sales are for 2x nanometer NAND flash including the new 19 to 21 nanometer flash.
As comparison in the third quarter, controllers for 2X nanometer flash was 50% to 55% of our controller sales. TLC controller revenue in the fourth quarter increased over 60% sequentially and accounted for nearly 50% of our controller sales in the quarter, significantly higher than 35% in the third quarter.
Riyadh Lai
OEM revenue increased by 35% sequentially and accounted for 50% of our controller sales in the fourth quarter. Bundled card controllers remained well in excess of 50%.
Our card controller revenue increased by 28% sequentially and our USB controller revenue increased by 12% sequentially.
Riyadh Lai
Moving to Mobile Communications. Our Communications business declined 28% sequentially as the accelerated build of 4G LTE smartphones by Samsung that we saw in the third quarter reverted to a more normalized level in the fourth quarter.
Our revenue from our multimedia SoCs, primarily our legacy graphics processor products, decreased by 22% sequentially. Our corporate gross margin increased again in the fourth quarter to 49.8%, up 40 basis points from the reported 49.4% in the previous quarter, as we sold more higher-value added controllers.
Riyadh Lai
In the third quarter operating spend increased to $16.6 million from $14.8 million due to higher project expenses, compensation expenses and higher head count. Head count at the end of this quarter was 642 employees, 24 more than at the end of the previous quarter.
For full year 2011, we added 55 head count, primarily R&D engineers, to support our new growth products. Incremental head count that is largely in line with what we had communicated a year ago.
Riyadh Lai
Operating margin decreased slightly to 25.1% this quarter from 26% last quarter. Better profitability from higher revenue and gross margin this quarter was more than offset by higher R&D project expenses and higher compensation expenses.
We generated diluted earnings per ADS of $0.47 in the fourth quarter, up from $0.40 per ADS in the third quarter. Overall, we are very pleased with our P&L performance this quarter.
Stock-based compensation in the fourth quarter declined to $2.8 million from $2.9 million in the third quarter.
Riyadh Lai
I will now move to our balance sheet and cash flow. Inventory days decreased to 81 days in the fourth quarter from 92 days in the third quarter.
DSOs increased slightly to 50 days in the fourth quarter compared to 49 days in the third quarter. Payable days increased to 48 days in the fourth quarter compared to 46 days in the third quarter.
Riyadh Lai
In the fourth quarter, our cash balance increased by $21.9 million to $91.7 million at the period’s end. In terms of primary sources of cash, we generate $16.1 million in net earnings and $6.2 million from an increase in accounts payable.
In terms of primary uses of cash, an increase in accounts receivable consumed $2.1 million and we invested $2.2 million for testing equipment, software and design tools.
Riyadh Lai
I will now move on to our guidance. We are delighted with our solid performance in 2011 and excited about the growth opportunities that lie ahead of us in 2012.
Based upon the current design wins that Wallace had talked about earlier, we believe that revenue from our new growth products, LTE and SSD+embedded, should scale and grow at least a 100% to account for about 25% of our total corporate revenue in 2012. We also expect continued growth from our card controllers, especially sales for smartphone bundled cards.
Riyadh Lai
To support revenue growth in 2012 and beyond, we need to invest further in R&D and other support resources and intend to increase our head count with approximately 50 new employees. We also anticipate higher tape-out and other related R&D project expenses.
Overall operating expense in 2012 will be 12% to 21% higher compared to 2011.
Riyadh Lai
For the first quarter of 2012, we expect our overall mobile storage revenue to decline sequentially because of seasonal factors relating to our OEM customers and much stronger than expected build out of cards and flash drives by module makers in the fourth quarter. We believe our LTE transceiver business should grow sequentially as new handset design wins begin to ramp, which should partially offset mobile storage weakness.
Riyadh Lai
Let me point out that our much stronger than expected fourth quarter is a high basis for first quarter sequential comparisons. So what I mean is our first quarter of sequential change would have been less if our fourth quarter revenue had grown less.
For our first quarter guidance, we expect first quarter revenue to be down 5% to 15% sequentially. We expect first quarter gross margin to be within the 47% to 49% range.
We are targeting operating expenses to be in the range of $15.5 million to $17 million. Stock-based compensation expense should be approximately $2.2 million to $3 million.
Our target mobile tax rate remains at 15%.
Riyadh Lai
Now, for our full year 2012 guidance. We expect full year 2012 revenue to increase by 20% to 30% as compared to 2011.
We expect full year 2012 gross margin to be within the 48% to 50% range. We are targeting full year 2012 operating expense to be in the range of $65 million to $70 million.
Stock-based compensation expense should be approximately $14 million to $17 million. Our target model tax rate for full year 2012 is expected to be 15%.
Riyadh Lai
We will now open the call for your questions.
Operator
[Operator Instructions] Your first question comes from the line of Daniel Amir from Lazard Capital.
Daniel Amir
So a couple of questions here to start with, first of all on your LTE business, can you kind of reiterate what type of growth rates you expect for this year and then kind of where we stand in terms of the competitive front here as it seems like that you’ve locked in already 5 design wins here for the first half of the year, which is probably the majority of Samsung’s LTE phones now. So where do we stand there and then I have a few follow-up questions.
Chia-Chang Kou
As we stated in last quarter earnings call, we expect to share design model with Qualcomm inside Samsung smartphone and tablet, and we believe Samsung will launch a doubled model than last year and probably more than double last year. And we believe the unit shipment will be increased compared to last year at probably more than 50%.
Riyadh Lai
Daniel, let me add further to what Wallace had said, collectively when you look at our growth products, our new growth products, our LTE plus SSD+embedded. We’re expecting that collective group of products, the revenue related to this, to grow by about 100% in 2012.
So it’s going to grow from roughly about 15% of our total revenue last year to roughly around 25% in 2012.
Daniel Amir
Okay. So follow-up question kind of on the SSD business, I mean, I guess you’ve focused in your prepared comments on the eMMC and LTE.
Where do we stand on SSD specifically? How does the pipeline look out?
What type of product design are you focused on there?
Chia-Chang Kou
So regarding SSD controllers into the notebook design, I think start from second quarter, we’re going to see one major design ramp up and probably will be 2 to 3 will ramp up in second half of this year.
Daniel Amir
Okay. And is the focus on the SSD just on the notebook market or will you still be growing on kind of the consumer industrial side?
Chia-Chang Kou
We have a quite a lot embedded SSD activity in design wins. As we stated last quarter, we have also launched called embedded SSD solution called Ferri and Ferri also doing well.
We going to see reasonable revenue contribution in 2012. We have a very established embedded SSD controller in the past 2 [ph] years but we are starting to enter in ultrabook and notebook market this year.
Daniel Amir
Okay. And then my final question then I’ll just get back into the queue.
In terms of the eMMC market, I mean last quarter you kind of gave an update on kind of design wins there or products ramps, where do we stand right now in terms of product shift with your product and what type of design win activity do you have here for this year at this point?
Chia-Chang Kou
In last quarter we announced we have a 12 major design and out of 12 major design, we expect I think 2 already, 3 already moving to production in Q4. We expect to remain in line with all new production before end of the second quarter.
And we expect we’re going to gain more design in second half of 2012. We worked both with module maker as well as flash makers.
Operator
Your next question comes from the line of Anthony Stoss from Craig-Hallum.
Anthony Stoss
Can you talk about the share environment? Do you think you’re picking up share in your core business?
Also, given the strength of your ASPs, I’d love to hear your views on the pricing environment. And last but not the least, Wallace, if you could chat with us on kind of your plans for USB 3.0.
Chia-Chang Kou
And I don’t know we think we gained market share, especially in Q4. I don’t know the overall total market shipment.
But I think that the both OEM business as well as the module maker business looks very strong. Even in coming to the first quarter, OEM business maintained very strong.
Although this week’s NAND flash price declined sharply. We don’t know why but the demand is still there.
So we have a much better visibility even with the module maker business. We believe we don’t maintain market share particularly for USB business.
Chia-Chang Kou
Regarding USB 3.0, we’re going to ramp up our product in late March and early Q2. We believe we have at least about a dozen designs right now but we’re positioned for high performance.
We don’t believe USB 3.0 could replace 2.0 completely even in the next 2 years because of the price difference. However, we believe we’re going to take leading position in USB 3.0 controlling their market share.
Operator
The next question comes from the line of Rajiv Gill from Needham & Company.
Rajvindra Gill
On the LTE business having it being up sequentially in Q1, can you maybe provide some color? Do you think it will be at the same run rate that you’re doing in Q3?
And if you could maybe comment in Q3 2010, Q3 2011 and can you comment also kind of on the pricing of those LTE transceivers? Would you see some degradation in pricing in 2012?
Any comment there would be helpful.
Chia-Chang Kou
Sorry, we cannot give you specific number in regarding model shipment. It’s very confidential and really we don’t know the detail because the model is domestic in certain regions, if some model international worldwide and number will be large.
But we cannot give you detailed information regarding the number shipment.
Rajvindra Gill
Right, but will it be at some sort of run rate that you did in Q3 or you can’t provide details on that?
Riyadh Lai
We are expecting the LTE business to continue ramp pretty much sequentially over the 4 quarters of this year. But of course, last quarter, the percentage growth rate was very sharp because we came from next to nothing to a business that was beginning to contribute nicely to our revenue and now we are building upon that basis.
So the percentage is going to come down somewhat. But overall, when you look at our revenue expectations for our LTE+ or SSD+embedded, I mean we are expecting this to grow strongly annual on a 100% growth rate.
So these products are going to be very important growth drivers for us.
Rajvindra Gill
Yes, definitely. And if you could remind me again the visibility you get from Samsung, is it a 3- to 6-month rolling forecast from Samsung’s LTE program?
Riyadh Lai
Yes, for our OEMs, we typically have 3 months rolling forecast. We also see where the various designs that are going to be coming to market.
But that’s different from the rolling forecast, obviously.
Rajvindra Gill
Okay. And if you could maybe characterize the NAND supply environment in the first half, kind of given Samsung’s commentary and SanDisk’s commentary?
You are guiding down on a sequential basis. You’re seeing kind of a drop-off in module maker business albeit at a higher rate in Q4, I understand that.
But maybe if you could describe a little bit about what you’re seeing in the supply and demand environment in the NAND market, first half?
Chia-Chang Kou
I think the first half NAND supply is sufficient. I don’t believe we are going to see shortage in first half; but second half, it is possible.
In the first half, we see probably Toshiba and SanDisk were supplying more NAND wafer in component to the market and Samsung was selling more product to the market in sales of wafers, it’s -- and different flash makers have a different strategy based on the investment and the market share, but we definitely see the supply will be sufficient in the first half of 2012.
Riyadh Lai
Let me add further to what Wallace said, for the full year we are expecting bids from all the NAND flash suppliers to grow probably around 75% bit growth this year, so that compares very similarly to what we saw last year, bit growth about 80%, I mean it’s a little bit less, but only marginally so, even with the push outs of next phase fab start-ups in Japan. You’ve got Hynix planning to accelerate based on what they recently reported.
So the environment still looks very healthy.
Rajvindra Gill
And just last question from me on eMMC, there is a good ramp that’s happening, maybe you could describe again the rationale for the flash maker Samsung to outsource the eMMC controller to you guys as well as maybe Phizun and others, basically why are they shifting from internal to external?
Chia-Chang Kou
So eMMC have many different type and category. They’ve got high-performing, high-density eMMC, they’ve got low-density, high-performing eMMC.
There is MLC and SLC and you are going to see TLC eMMC. You already see from SanDisk, eMMC from Samsung maybe second half of this year, so there is so many different type and requirement, you need the different technology, different [indiscernible] to support the requirement, that’s why sometimes Samsung, if they don’t have enough internal resource, they outsource and to some third party.
But different companies have different strategy to do to their plan. We all need to be selective major partners to supply the eMMC controller for some flash maker.
Operator
Your next question comes from the line of Mike Crawford from B Riley & Company.
Michael Crawford
So you touched a little bit on SanDisk slowing or halting expansion at Yokkaichi. But you’re seeing Hynix at least plan to accelerate.
At what level would you start to worry about bit shipments growing that would be slow enough that would allow some of your competitors to catch up to your technology?
Riyadh Lai
Overall, Mike, we are expecting fairly robust growth of bits, despite plans to decelerate further move-ins of equipment into existing fabs. I mean, you have fabs that continue to be -- equipment that were placed previously continue to come on stream, yields improving and so forth.
Riyadh Lai
And you have Hynix, based on what they recently talked about in their call with investors, they talked about pulling in, accelerating the installation equipment into their existing fabs. So overall we are expecting fairly reasonable and strong bit growth this year despite all the chatter.
Chia-Chang Kou
So let me add to the comment, our controller revenue [ph] support all from 19 to 21 nanometer MLC and TLC NAND. We are working for all flash maker and since even 6 months ago for 15, 16 nanometer NAND flash technology.
So we believe we are ahead of many player in the market and we have a very, very unique technology in -- and then you see especially for LDPC and that’s why we believe we will be ready even ahead of NAND moving to mass production.
Michael Crawford
Okay. Also I want to touch on the SSD strategy.
So you’re starting to enter the notebook and ultrabook market but is that going to be with a Ferri branded product or is this going to be something that’s branded at all?
Chia-Chang Kou
We, I think in the past we didn’t really focus on PC or ultrabook SSD and we’re going to try to put a more focus because the market is growing. We see the opportunity for us, especially for the cache-based SSD for like mSATA and we try to work with the flash partner and to be through their platform and moving to major OEM and PC maker.
So far I think we have one program we’ll be ready to run in second quarter and hopefully we can gain more design in the second half this year.
Michael Crawford
Okay. And then last question relates to the LTE design wins you have.
So I guess Samsung has pushed out launch of some of these phones to Q2 but that’s fine. Are these phones -- so far your strength has been in the North American market, how many markets, where do you expect, where are these other 5 design wins targeted?
Riyadh Lai
Mike, let me first correct what you just said. I mean there are no delays.
These are design wins that we’re expecting to rollout. These are not programs that had experienced delays.
I mean, we’ve rolled out very nicely with a large number of programs at several carriers. And we’ve recently received 5 new projects that are also going to go into mass production over the next 2 quarters.
So there are no delays whatsoever.
Michael Crawford
Okay. But what markets are those carriers in or...
Chia-Chang Kou
Primarily in North America, some will be other country.
Operator
[Operator Instructions] Your next question comes from the line of Tom Sepenzis from Northland Securities.
Thomas Sepenzis
I just wanted to touch on the TV IC business since no one’s really talked about that at all and what you are seeing there. I know that a small carrier in the U.S.
is aiming to try and get that going in the North American market this year, and I’m wondering if you’ve seen -- how you would characterize that business and if you have any expectation that we could see growth there again?
Riyadh Lai
I’m sorry, could you repeat your question again? There is some disturbance on our end.
Thomas Sepenzis
Oh, I’m sorry. I just wanted to see if you could give us some kind of guidance on the TV IC business, I know that, that’s largely ignored and I know there is a small carrier in the U.S.
that’s trying to introduce a television on the cellphone business this year. And I’m wondering if you are seeing any kind of movement from anyone else and if we could expect growth from that business again?
Riyadh Lai
The mobile TV business is experiencing sort of growth in pockets. It has not rolled out as expected, but it is still growing very nicely in Korea, it’s growing nicely in China, and in Japan, it’s already scaled out and, of course, Brazil and Latin America.
The significance of this business to us, while it’s still growing, has lessened as our LTE business has scaled, put it that way.
Operator
Next, we have a follow-up question from the line of Daniel Amir from Lazard Capital.
Daniel Amir
Just one follow-up, can you highlight again the ASP change in the mobile storage business in 2011 and what you kind of think it could be in 2012?
Riyadh Lai
ASPs for our mobile storage controllers were up 13% year-over-year. So we’ve grown very nicely for 2 years, 8 consecutive quarters of the ASP increases.
So, it’s quite exciting, but there is also a combination of products that -- our product mix, that’s blending it up, but we are planning conservatively sort of flat ASPs while we’d obviously like to see continued ASP increases.
Daniel Amir
Okay, I might have missed something, what was the comment around 9% then?
Riyadh Lai
I am sorry. 9% was last year and 11% was 2010.
Daniel Amir
Okay, so your ASP has increase 9% in 2011 then?
Riyadh Lai
Yes, correct.
Operator
[Operator Instructions] There are no other questions at this time. I would now like to hand the conference back to today’s presenters, please continue, sir.
Chia-Chang Kou
I would like to thank all of you for joining us today and your continuing interest in Silicon Motion. In February, we will be presenting in the Deutsche Bank Small and Midcap Conference in Florida and in March the Bank of America Merrill Lynch Conference in Taipei.
Thank you and goodbye for now.
Operator
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating.
You may all disconnect.