Silicon Image Inc. Reports Operating Results (10-Q)
Silicon Image Inc. designs develops and markets semiconductors includingtransmitters receivers controllers and video processors for applications that require high-bandwidth cost-effective solutions for high-speed data communications. Silicon Image Inc. has a market cap of $192.1 million; its shares were traded at around $2.57 with a P/E ratio of 257 and P/S ratio of 0.7. Highlight of Business Operations: Historically, a relatively small number of customers and distributors have generated a significant portion of our revenue. For instance, our top five customers, including distributors, generated 43.4% and 44.0% of our revenue for the three and six months ended June 30, 2009, respectively and 56.5% and 56.1% of our revenue for the three and six months ended June 30, 2008. Additionally, the percentage of revenue generated through distributors tends to be significant, since many OEMs rely upon third party manufacturers or distributors to provide purchasing and inventory management services. For the three and six months ended June 30, 2009, 23.2% and 38.1% of our revenue, respectively, was generated through distributors, compared to 53.3% and 52.6% in the comparable periods of 2008, respectively. Our licensing revenue is not generated through distributors, and to the extent licensing revenue increases faster than product revenue, we would expect a decrease in the percentage of our total revenue generated through distributors.
A significant portion of our revenue is generated from products sold overseas. Sales to customers in Asia, including distributors, represented 66.1% and 67.0% of our revenue for the three and six months ended June 30, 2009, respectively and 70.9% and 69.4% for the three and six months ended June 30, 2008, respectively. The reason for the geographical concentration in Asia is that most of our products are components of consumer electronics, computer and storage products, the majority of which are manufactured in Asia. The percentage of our revenue derived from any country is dependent upon where our end customers choose to manufacture their products. Accordingly, variability in our geographic revenue is not necessarily indicative of any geographic trends, but rather is the combined effect of new design wins and changes in customer manufacturing locations. All revenue to date has been denominated in U.S. dollars except for a relatively insignificant portion generated in Euros through our subsidiary in Germany.
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