Silicon Motion Completes $1.15 Billion Convertible Bond Offering to Accelerate Enterprise and Embedded AI Businesses

Silicon Motion Technology Corporation (SIMO-US), a major manufacturer of NAND flash controller chips, announced today (the 14th) the successful completion of its offering of $1.15 billion in aggregate principal amount of 0.00% convertible senior notes due 2031, including the full exercise by initial purchasers of their option to purchase an additional $150 million in principal amount of notes. The company expects the proceeds to accelerate the rapid growth of its enterprise boot drive storage, Ferri automotive, and embedded AI solution businesses.

Silicon Motion stated that the convertible notes were issued through a private placement under Rule 144A of the U.S. Securities Act of 1933, as amended, to investors reasonably believed to be 'qualified institutional buyers.'

Chief Executive Officer Kenny Hsu commented that this issuance marks a significant milestone for the company. Strong market demand enabled Silicon Motion to increase the offering size from the initially planned $800 million to $1.15 billion, achieving pricing terms among the most favorable in the semiconductor sector's convertible bond market.

Hsu expressed confidence that the transaction will substantially strengthen the company's financial position and provide essential capital to accelerate growth in high-potential areas. He highlighted that demand for Silicon Motion's solution products continues to rise, with their combined revenue contribution reaching nearly 30% in Q2—up significantly from less than 5% a year earlier. The $1.15 billion in zero-interest financing will ensure component supply for volume production across multiple product lines while minimizing equity dilution, allowing the company to capture growth momentum and generate strong profitability and cash flow.

The convertible notes will mature on August 15, 2031, unless repurchased, redeemed, or converted earlier. The initial conversion price is approximately $380.50 per American Depositary Share (ADS) of Silicon Motion; each ADS represents four ordinary shares of the company, par value $0.01 per share. This initial conversion price represents a premium of approximately 65.0% over the last reported Nasdaq closing price of $230.61 per ADS on August 10, 2026. The conversion price will be adjusted under certain circumstances as specified in the relevant terms.

Net proceeds from the offering amount to $1.127 billion, after deducting initial purchaser discounts but before estimated offering expenses payable by Silicon Motion. The company intends to use the net proceeds for general corporate purposes and to repay outstanding amounts under credit facilities. Prior to actual deployment, the net proceeds may be invested in short-term, interest-bearing securities rated investment grade.

Upon conversion, Silicon Motion will settle each conversion in cash equal to the principal amount of the notes (or the conversion value if lower). If the conversion value exceeds the principal amount, the company may elect to pay the excess in cash, ADSs, or a combination thereof.

This announcement does not constitute an offer to sell, or the solicitation of an offer to buy, the convertible notes, the ADSs potentially issuable upon conversion of the notes, or the underlying ordinary shares, nor shall it constitute such an offer, solicitation, or sale in any jurisdiction where such activities are unlawful.