Silicon Motion and Longsys recently signed a strategic memorandum of understanding (MoU), aiming to increase their market share and comprehensive product competitiveness in the phone storage and memory markets, and facilitate a deep partnership for synergistic growth.

The advantages of China's industrial chain will be exploited to the fullest to improve local delivery efficiency, technological innovation capabilities, and cost competitiveness

During the collaboration, Silicon Motion will continue to provide Longsys with market-competitive embedded storage controller chip and deepen their technical cooperation. Longsys, an industry leader in terms of domestic storage industrial chain integration and storage product research and development capabilities, and Silicon Motion can complement each other's advantages. They will also jointly develop a variety of embedded storage products, such as eMMC, UFS, eMCP, NM card, and other phone storage and memory product. In addition, they will meet clients' requirements for distributed/compound storage products, support the expansion of the FORESEE brand in the global phone storage and memory markets, and create a storage industrial chain featuring both large scale and high value.

(Joint Product Development)

The synergistic effect will be leveraged to comprehensively enhance their overall competitiveness

Their products will inject new power to phone storage and memory

Silicon Motion dominates the field of NAND flash controller chips, and it has shipped more than 2.2 billion eMMC/UFS controller chips so far. Their chips are widely used in smart phone, data center, and PC, as well as in the automotive, commercial, and industrial control market.

Engaged in the storage industry for 23 years, Longsys adheres to the synergic strategy of “products plus brands”. It has now established four product lines: embedded storage, solid-state drive (SSD), mobile storage, and memory module. To explore the industry and consumer storage markets, it also provides consumer-grade, industrial-grade, and automotive-grade memory product, and industry storage software and hardware application solution, demonstrating strong comprehensive competitiveness in the storage field. In 2011, it founded the To B brand FORESEE and started the embedded storage product business. Its storage products have been accepted by many well-known phone manufacturers and solution providers, growing its market share in the global phone storage and memory markets constantly.

Their R&D endeavors will benefit from the innovative power of Chinese engineers

Boasting more than 20 years of R&D and design experience, Silicon Motion has developed advanced controller chip architecture and firmware algorithms. Using leading manufacturing process and hardware technologies, it can provide phone manufacturers with a full range of design and production support.

Similarly, Longsys has attached great importance to R&D since its establishment, and will continue to invest heavily into R&D. With nearly 1,000 R&D engineers, it possesses comprehensive technical capabilities for firmware design, software and hardware development, and system testing. The complete functional combination of its field application engineer (FAE), application engineer (AE), and R&D personnel can provide terminal clients with comprehensive pre-sales technical support and after-sales services during the stages of project introduction and mass production, so as to respond in real time, follow up on problems, and present solutions rapidly. In terms of technical facilities, Longsys has established reliability labs, innovation labs, quality labs, and testing centers in its storage industrial park, which is equipped with a team of professional engineers and a full set of testing equipment for a large number of technological innovation projects. For example, based on the testing solution for 10nm ASIC chips, it has customized a high-speed, high-frequency, large-scale, low-power LPDDR testing board. The LPDDR testing board and independently developed testing programs enable performance testing and screening of LPDDR under normal/high/low temperature environments, meet the strict testing requirements of mobile phone storage and memory products to a high standard, and support clients in high-quality mass production. For eMMC, UFS, and other products, Longsys has also developed the active organization (AO) technology based on SMI controllers to significantly improve the actual performance of such products. In addition, it has set up joint laboratories with a number of strategic clients to strengthen services for them. As professional technology platforms, such laboratories can provide joint development services and one-stop services for clients' application scenarios.

Such technical cooperation can provide phone manufacturers with better storage solutions and efficient localized services, synergistically promoting the development and innovation of phone storage technologies.

(Comprehensive Technical Abilities)

They will increase their market scale and value through the industrial chain via the shortest path

Longsys has a complete, mature, and full-chain embedded storage product delivery system for storage wafers, embedded controller chips, packaging, firmware, testing, quality management, technical support, and after-sales services. The cooperation with Silicon Motion can help to bring about a powerful “alliance” between Longsys's self-developed storage products and Silicon Motion's industry-leading controller chips, which can further optimize the industrial chain and improve the competitiveness of both parties in the phone storage market. They will also carry out global cooperation and use the local sales and service agencies they have established in Shenzhen, Shanghai, Beijing, Hong Kong(China), Taiwan (China), the United States, and other countries and regions to exploit their local geographical advantages. Furthermore, they will provide phone manufacturers with stable production capacity, logistics, warehousing, and other support, as well as improve the delivery efficiency of embedded storage products with a more competitive industrial chain.

(Industrial Chain of Embedded Storage)

Their intellectual property (IP) rights are independent and controllable

Silicon Motion has an in-depth understanding of the characteristics of NAND flash. With more than 3,400 technical patents, it has developed an extremely wide range of controller chip IP portfolios, and designed unique and highly optimized ICs and complete controller chip turnkey and SDK solutions.

Longsys has independent and controllable core IP rights in all major firmware algorithm fields, and has independently designed more than 30 core testing algorithms and software. As of December 31, 2021, it has obtained 438 valid patents, including 177 invention patents. It has 248 patents related to embedded storage, including JEDEC standard essential patents (SEPs) of eMMC and UFS.

Using IP rights as the leverage, they will jointly enhance the competitiveness of their phone storage products.

(Longsys's Competitiveness in IP Rights)

Market Outlook

According to data from the China Academy of Information and Communications Technology (CAICT), Chinese phone manufactures shipped 108 million devices from January to May 2022, representing a year-on-year decrease of 27.1%. They shipped 86.207 million 5G phones, 79.7% of total shipments, representing a year-on-year decrease of 20.2%. As storage and memory components are relatively costly and the market competition pressure is huge, phone manufacturers are searching for storage suppliers with comprehensive advantages more actively, which also provides more market opportunities for this strategic cooperation.

This cooperation will allow Silicon Motion and Longsys to jointly and quickly explore the global phone storage market, actively serve phone manufacturers, and increase their market scale and value. They will also jointly develop innovative product categories for automotive-grade storage, large-capacity storage, Chinese storage standard compliant applications, etc., and establish a leading industrial chain for China's semiconductor storage industry.