U.S. stock market volatility: Silicon Motion Technology plunges on October 30 due to disappointing Kioxia capital expenditure, storage sector under pressure, and profit-taking.

Silicon Motion Technology October 30 Sharp Drop Analysis

Keywords: Kioxia capital expenditure disappointment, storage sector under pressure, profit taking

1. On October 30, Kioxia's third-quarter operating profit grew by 57.1% quarter-on-quarter, but capital expenditure for the quarter was only 84.6 billion yen, below expectations. Fourth-quarter operating profit guidance also fell short of analysts' forecasts, raising concerns about the pace of NAND capacity expansion and the sustainability of growth. The storage industry chain came under pressure, and Silicon Motion Technology, as a NAND flash main controller chip manufacturer, was affected.

2. On October 29, Silicon Motion Technology disclosed on its earnings call that its eMMC/UFS controller business declined 10% to 15% quarter-on-quarter, impacted by customers’ product launch schedules and cost pressures on smartphone OEMs. On the same day, Wedbush pointed out that the company’s strong results and guidance failed to boost the share price, as investors are evaluating the memory cycle and post-2027 outlook, and are discounting the company as a memory supplier rather than valuing it as a custom chip designer.

3. The closing price on October 27 showed significant short-term gains. According to Eastmoney data, the stock rose a cumulative 15.89% in the past five days, and 138.11% year-to-date. After the October 29 earnings report, the share price did not respond positively, indicating profit taking pressure.

(Disclaimer: This content is summarized based on publicly available information collected by AI technology and is for reference only. It does not constitute investment advice.)