The operating expense for the first quarter of 2009 is same as the prior guidance, which is in the range of $12 million to $13 million, excluding the stock-based compensation, acquisition-related charges, and one time items.
In the first quarter, our business continued to be impacted by the effects of the global economic slowdown. While we continued to execute well, we saw more limited availability of NAND flash in the first quarter as the flash industry reduced capacity and utilization rates. This in turn negatively affected the supply of flash components to our customers and their related procurement of controllers, stated Wallace Kou, president and chief executive officer of Silicon Motion. Gross margin for the first quarter was also weaker than planned. Because the transition by the flash industry to next-generation, sub-50nm NAND products was slower than expected, a larger proportion of our sales came from lower margin legacy controllers. This issue was exacerbated in the first quarter by more competition among controller suppliers for the smaller addressable market. That said, while our first quarter sales and gross margin underperformed, we remain optimistic about our long-term prospects and product roadmap. We continue to work hard on bringing to market next-generation solutions for all of our three product lines and expect to benefit from the sales of these next generation solutions in the near future.
Silicon Motion is a Taiwan-based manufacturer and marketer of universally compatible, high-performance, low-power semiconductor solutions.
