Gross margin took a hit as well, coming in at the low end of 48.5%-50.5% guidance. Again, the reason for the weakness is likely the tight supply of NAND chips, which is helping average selling prices but hurting volume sales of Silicon Motion's controllers. This environment has led to a general sentiment of malaise surrounding SIMO shares, which are currently valued at a forward P/E a tad over 10 despite the company expecting a strong 2H 2017. While this seems cheap, whether shares are undervalued really depends on how the NAND market will turn out over the next few months. While Q2 was not encouraging, Silicon Motion is poised to turn in a much stronger performance in the second half of 2017. Micron Technology ( MU ), a leading producer of DRAM and NAND, said on its latest conference call that it expects NAND supply to expand and to outstrip demand over the next few months. This supports statements made by Silicon Motion's management as well who stated on the last