##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from       to     .
 Commission file number: 000-26887
 Silicon Image, Inc.
  Delaware
    
    77-0396307(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 1060 East Arques Avenue
Sunnyvale, California 94085
 (408) 616-4000
 þ o
  þ o o
 o þ




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##### 



Silicon Image, Inc.
Quarterly Report on Form 10-Q
Three and Nine Months Ended
September 30, 2007
 Table of Contents
 Part I. Financial Information
3Item 1. Financial Statements (Unaudited)
3Condensed Consolidated Balance Sheets as of September 30, 2007 and December 31, 2006
3Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2007 and 2006
4Consolidated Statements of Cash Flows for the nine months ended September 30, 2007 and 2006
5Notes to Condensed Consolidated Financial Statements
6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
16Item 3. Quantitative and Qualitative Disclosures About Market Risk
25Item 4. Controls and Procedures
25Part II. Other Information
26Item 1. Legal Proceedings
26Item 1A. Risk Factors
27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
44Item 3. Defaults Upon Senior Securities
44Item 4. Submission of Matters to a Vote of Security Holders
44Item 5. Other Information
44Item 6. Exhibits
45Signatures
46EXHIBIT 31.01EXHIBIT 31.02EXHIBIT 32.01EXHIBIT 32.02
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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements (Unaudited)
 Silicon Image, Inc.
 
 Condensed Consolidated Balance Sheets
 (in thousands)
 (unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006AssetsCurrent Assets:Cash and cash equivalents
    
    $
    130,658
    
    
    $
    81,921Short-term investments
    
    
    95,031
    
    
    
    168,724Accounts receivable, net of allowances for
doubtful accounts of $1,727 in 2007 and $235
in 2006
    
    
    45,597
    
    
    
    39,931Inventories, net
    
    
    19,741
    
    
    
    28,287Prepaid expenses and other current assets
    
    
    4,512
    
    
    
    4,895Deferred income taxes
    
    
    10,239
    
    
    
    12,793Total current assets
    
    
    305,778
    
    
    
    336,551Property and equipment, net
    
    
    23,272
    
    
    
    18,431Goodwill
    
    
    19,210
    
    
    
    13,021Intangible assets, net
    
    
    1,566
    
    
    
    78Deferred income taxes, non-current
    
    
    15,250
    
    
    
    10,580Other assets
    
    
    19,825
    
    
    
    1,570Total assets
    
    $
    384,901
    
    
    $
    380,231Liabilities and Stockholders EquityCurrent Liabilities:Accounts payable
    
    $
    22,382
    
    
    $
    14,187Accrued and other liabilities
    
    
    19,871
    
    
    
    37,308Deferred license revenue
    
    
    5,346
    
    
    
    5,264Deferred margin on sales to distributors
    
    
    30,564
    
    
    
    17,712Total current liabilities
    
    
    78,163
    
    
    
    74,471Other long-term liabilities
    
    
    5,168
    
    
    
    538Total liabilities
    
    
    83,331
    
    
    
    75,009Commitments and contingencies (See Note 7)Stockholders Equity:Common stock
    
    
    90
    
    
    
    87Treasury stock
    
    
    (38,096
    )
    
    
    Additional paid-in capital
    
    
    413,902
    
    
    
    386,258Accumulated deficit
    
    
    (74,254
    )
    
    
    (80,964
    )Accumulated other comprehensive loss
    
    
    (72
    )
    
    
    (159
    )Total stockholders equity
    
    
    301,570
    
    
    
    305,222Total liabilities and stockholders equity
    
    $
    384,901
    
    
    $
    380,231
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Silicon Image, Inc.
 
 Condensed Consolidated Statements of Operations
 (in thousands, except per share amounts)
 (unaudited)
 Three Months Ended
September 30,
    
    
    Nine Months Ended
September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue:Product
    
    $
    74,173
    
    
    $
    69,149
    
    
    $
    195,715
    
    
    $
    184,096Development, licensing and royalties
    
    
    12,109
    
    
    
    9,178
    
    
    
    39,457
    
    
    
    23,909Total revenue
    
    
    86,282
    
    
    
    78,327
    
    
    
    235,172
    
    
    
    208,005Cost of revenue and operating expenses:Cost of revenue (1)
    
    
    37,500
    
    
    
    32,721
    
    
    
    105,196
    
    
    
    87,854Research and development (2)
    
    
    20,489
    
    
    
    16,866
    
    
    
    56,709
    
    
    
    47,611Selling, general and administrative (3)
    
    
    16,827
    
    
    
    17,472
    
    
    
    51,122
    
    
    
    49,496Amortization of intangible assets
    
    
    540
    
    
    
    78
    
    
    
    1,692
    
    
    
    430Total cost of revenue and
operating expenses
    
    
    75,356
    
    
    
    67,137
    
    
    
    214,719
    
    
    
    185,391Income from operations
    
    
    10,926
    
    
    
    11,190
    
    
    
    20,453
    
    
    
    22,614Interest income and other, net
    
    
    2,302
    
    
    
    2,623
    
    
    
    8,618
    
    
    
    6,181Income before provision for income taxes
    
    
    13,228
    
    
    
    13,813
    
    
    
    29,071
    
    
    
    28,795Provision for income taxes
    
    
    9,118
    
    
    
    5,771
    
    
    
    17,673
    
    
    
    12,603Net income
    
    $
    4,110
    
    
    $
    8,042
    
    
    $
    11,398
    
    
    $
    16,192Net income per share  basic
    
    $
    0.05
    
    
    $
    0.10
    
    
    $
    0.13
    
    
    $
    0.19Net income per share  diluted
    
    $
    0.05
    
    
    $
    0.09
    
    
    $
    0.13
    
    
    $
    0.18Weighted average shares  basic
    
    
    84,489
    
    
    
    83,439
    
    
    
    86,008
    
    
    
    83,424Weighted average shares  diluted
    
    
    85,937
    
    
    
    87,433
    
    
    
    88,063
    
    
    
    87,577
 
 (1)   Includes stock-based compensation expense
    
    $
    421
    
    
    $
    772
    
    
    $
    1,210
    
    
    $
    1,954(2)   Includes stock-based compensation expense
    
    
    2,181
    
    
    
    3,781
    
    
    
    6,545
    
    
    
    9,393(3)   Includes stock-based compensation expense
    
    
    2,731
    
    
    
    4,073
    
    
    
    6,796
    
    
    
    11,113
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Silicon Image, Inc.
 
 Consolidated Statements of Cash Flows  (in thousands)  (unaudited)
 Nine Months Ended September 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    11,398
    
    
    $
    16,192Adjustments to reconcile net income to cash provided by
operating activities:Depreciation
    
    
    7,456
    
    
    
    5,045Amortization of intangible assets
    
    
    1,692
    
    
    
    429Provision for doubtful accounts
    
    
    450
    
    
    
    (2
    )Stock-based compensation expense
    
    
    14,549
    
    
    
    22,460Income tax benefit from employee based compensation plans
    
    
    789
    
    
    
    12,866Excess tax benefits from employee stock transactions
    
    
    (2,880
    )
    
    
    (8,556
    )Accretion of investment premium
    
    
    (260
    )
    
    
    (322
    )Realized loss/(gain) on investments
    
    
    (27
    )
    
    
    7Loss on disposal of property and equipment
    
    
    995
    
    
    
    10Deferred income taxes
    
    
    (206
    )
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    (3,029
    )
    
    
    (1,861
    )Inventories
    
    
    8,736
    
    
    
    (2,547
    )Prepaid expenses and other assets
    
    
    1,167
    
    
    
    13Accounts payable
    
    
    6,421
    
    
    
    786Accrued liabilities and deferred license revenue
    
    
    (23,102
    )
    
    
    (2,063
    )Patent infringement proceeds
    
    
    
    
    
    
    4,216Deferred margin on sales to distributors
    
    
    12,852
    
    
    
    5,174Cash provided by operating activities
    
    
    37,001
    
    
    
    51,847Cash flows from investing activities:Proceeds from sales and maturities of short-term investments
    
    
    100,434
    
    
    
    65,280Purchases of short-term investments
    
    
    (26,287
    )
    
    
    (186,493
    )Business acquisition, net of cash acquired
    
    
    (13,751
    )
    
    
    Purchases of property and equipment
    
    
    (10,105
    )
    
    
    (5,958
    )Purchase of intellectual property
    
    
    (15,040
    )
    
    
    Release of restriction on cash received in conjunction with
resolution of litigation
    
    
    
    
    
    
    6,966Cash provided by (used in) investing activities
    
    
    35,251
    
    
    
    (120,205
    )Cash flows from financing activities:Proceeds from issuances of common stock, net
    
    
    12,305
    
    
    
    22,418Excess tax benefits from employee stock transactions
    
    
    2,880
    
    
    
    8,556Repayments of debt and capital lease obligations
    
    
    
    
    
    
    (171
    )Payment for financing in connection with purchases of software
    
    
    (528
    )
    
    
    Payments to acquire treasury stock
    
    
    (38,096
    )
    
    
    Cash provided by (used in) financing activities
    
    
    (23,439
    )
    
    
    30,803Effect of exchange rate changes on cash and cash equivalents
    
    
    (76
    )
    
    
    Net increase (decrease) in cash and cash equivalents
    
    
    48,737
    
    
    
    (37,555
    )Cash and cash equivalents  beginning of period
    
    
    81,921
    
    
    
    77,877Cash and cash equivalents  end of period
    
    $
    130,658
    
    
    $
    40,322Supplemental cash flow information:Cash payment for interest
    
    $
    33
    
    
    $
    9Cash payment for income taxes
    
    $
    29,018
    
    
    $
    927Unrealized net gain  on investment security
    
    $
    163
    
    
    $
    551Property and equipment purchased but not paid for
    
    $
    1,604
    
    
    $
    3,213Intangibles purchased not paid for
    
    $
    3,750
    
    
    $
    15
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Silicon Image, Inc.
 
 Notes to Condensed Consolidated Financial Statements
 September 30, 2007
 (unaudited)
 1. Basis of Presentation
  2. Recent Accounting Pronouncements
 Fair Value Measurements
 The Fair Value
Option for Financial Assets and Financial Liabilities
 Accounting for Advance Payments for Goods or Services to be
Received for Use in Future Research and Development Activities.
 3. Stock-Based Compensation
 1995 Equity Incentive Plan (the 1995 Plan)
  1999 Equity Incentive Plan (the 1999 Plan)
  6




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Non-plan options
  1999 Employee Stock Purchase Plan (ESPP)
  SFAS No. 123(R)
 Share-Based Payment Accounting for Stock-based
Compensation
 7




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Stock-based Compensation Expense
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Cost of sales
    
    $
    421
    
    
    
    772
    
    
    $
    1,210
    
    
    
    1,954Research and development
    
    
    2,181
    
    
    
    3,781
    
    
    
    6,545
    
    
    
    9,393Selling, general and administrative
    
    
    2,731
    
    
    
    4,073
    
    
    
    6,796
    
    
    
    11,113Income tax effect
    
    
    (1,714
    )
    
    
    (189
    )
    
    
    (4,517
    )
    
    
    (235
    )$
    3,619
    
    
    $
    8,437
    
    
    $
    10,034
    
    
    $
    22,225
  Change
in forfeiture rate
 4. Comprehensive Income
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    4,110
    
    
    $
    8,042
    
    
    $
    11,398
    
    
    $
    16,192Change in unrealized value of investments
    
    
    28
    
    
    
    321
    
    
    
    163
    
    
    
    327Foreign currency translation adjustments
    
    
    49
    
    
    
    
    
    
    
    (76
    )
    
    
    Total comprehensive income
    
    $
    4,187
    
    
    $
    8,363
    
    
    $
    11,485
    
    
    $
    16,519
 5. Net Income Per Share
  Three Months Ended September 30,
    
    

Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    4,110
    
    
    $
    8,042
    
    
    $
    11,398
    
    
    $
    16,192Weighted average shares  basic
    
    
    84,489
    
    
    
    83,439
    
    
    
    86,008
    
    
    
    83,424Weighted average shares  diluted
    
    
    85,937
    
    
    
    87,433
    
    
    
    88,063
    
    
    
    87,577Net income per share  basic
    
    $
    0.05
    
    
    $
    0.10
    
    
    $
    0.13
    
    
    $
    0.19Net income per share  diluted
    
    $
    0.05
    
    
    $
    0.09
    
    
    $
    0.13
    
    
    $
    0.18
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Three Months Ended September 30,
    

Nine Months Ended September 30,2007
    
    2006
    
    2007
    
    2006Weighted-average
common shares for
basic net income
per share
    
    
    84,489
    
    
    
    83,439
    
    
    
    86,008
    
    
    
    83,424Weighted-average
dilutive stock
options outstanding
under the treasury
stock method
    
    
    1,448
    
    
    
    3,994
    
    
    
    2,055
    
    
    
    4,153Total
    
    
    85,937
    
    
    
    87,433
    
    
    
    88,063
    
    
    
    87,577
 6. Balance Sheet Components
 September 30,
    
    
    December 31,2007
    
    
    2006(in thousands)Inventories:Raw materials
    
    $
    3,876
    
    
    $
    7,908Work in process
    
    
    4,342
    
    
    
    2,712Finished goods
    
    
    11,523
    
    
    
    17,667Total inventories
    
    $
    19,741
    
    
    $
    28,287Property and equipmentComputers and software
    
    $
    27,950
    
    
    $
    22,432Equipment
    
    
    27,215
    
    
    
    25,836Furniture and fixtures
    
    
    3,975
    
    
    
    3,06859,140
    
    
    
    51,336Less: accumulated depreciation
    
    
    (35,868
    )
    
    
    (32,905
    )Total property and equipment, net
    
    $
    23,272
    
    
    $
    18,431Accrued liabilities:Accrued payroll and related expenses
    
    $
    4,309
    
    
    $
    4,921Accrued legal fees
    
    
    1,421
    
    
    
    1,022Bonus accrual
    
    
    73
    
    
    
    8,718Accrued income taxes
    
    
    332
    
    
    
    12,683Other accrued liabilities
    
    
    13,736
    
    
    
    9,964Total accrued liabilities
    
    $
    19,871
    
    
    $
    37,308
 . Commitments and Contingencies
   9




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10




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Guarantees
  Contractual Obligations and Off-Balance Sheet Arrangements
  Contractual obligations
    
    Total
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    More than 5 yearsOperating lease obligations
    
    $
    9,418
    
    
    $
    3,519
    
    
    $
    4,236
    
    
    $
    1,663
    
    
    $
    Inventory purchase obligations
    
    
    8,853
    
    
    
    8,853
    
    
    
    
    
    
    
    
    
    
    
    Intangibles purchase commitments
    
    
    31,371
    
    
    
    23,156
    
    
    
    8,215
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    49,642
    
    
    $
    35,528
    
    
    $
    12,451
    
    
    $
    1,663
    
    
    $
    
 8. Customer and Geographic Information
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Japan
    
    $
    31,787
    
    
    $
    30,294
    
    
    $
    83,515
    
    
    $
    69,727Taiwan
    
    
    11,232
    
    
    
    14,895
    
    
    
    39,380
    
    
    
    44,187United States
    
    
    20,374
    
    
    
    14,371
    
    
    
    48,994
    
    
    
    40,450Europe
    
    
    5,718
    
    
    
    5,180
    
    
    
    18,789
    
    
    
    13,270Hong Kong
    
    
    6,486
    
    
    
    3,042
    
    
    
    14,611
    
    
    
    7,516Korea
    
    
    4,682
    
    
    
    6,744
    
    
    
    13,430
    
    
    
    18,110Other
    
    
    6,003
    
    
    
    3,801
    
    
    
    16,453
    
    
    
    14,745Total revenue
    
    $
    86,282
    
    
    $
    78,327
    
    
    $
    235,172
    
    
    $
    208,005
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Consumer Electronics (1)
    
    $
    66,589
    
    
    $
    54,265
    
    
    $
    176,978
    
    
    $
    137,874Personal Computer (1)
    
    
    10,992
    
    
    
    14,462
    
    
    
    33,234
    
    
    
    37,968Storage (1)
    
    
    8,701
    
    
    
    9,600
    
    
    
    24,960
    
    
    
    32,163Total revenue
    
    $
    86,282
    
    
    $
    78,327
    
    
    $
    235,172
    
    
    $
    208,005
 
 (1)
    
    Includes development, licensing and royalty revenue 11




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Consumer Electronics
    
    $
    58,644
    
    
    $
    47,793
    
    
    $
    148,886
    
    
    $
    121,587Personal Computer
    
    
    9,326
    
    
    
    13,945
    
    
    
    29,237
    
    
    
    36,414Storage
    
    
    6,203
    
    
    
    7,411
    
    
    
    17,591
    
    
    
    26,095Development, licensing and royalty revenue
    
    
    12,109
    
    
    
    9,178
    
    
    
    39,458
    
    
    
    23,909Total revenue
    
    $
    86,282
    
    
    $
    78,327
    
    
    $
    235,172
    
    
    $
    208,005
     9. Provision for income taxes
     12




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10. Business Acquisition
    January 3, 2007Cash
    
    $
    2,015Accounts receivable, net of allowances for doubtful accounts
    
    
    2,598Unbilled accounts receivable
    
    
    1,077Inventories, net
    
    
    191Other current assets
    
    
    661Property and equipment, net
    
    
    1,583Other long-term assets
    
    
    38Deferred tax assets
    
    
    1,910Accounts payable
    
    
    (548
    )Accrued liabilities
    
    
    (1,131
    )Other current liabilities
    
    
    (1,509
    )Total liabilities assumed
    
    $
    6,885
 13




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Net tangible assets acquired
    
    $
    6,885Goodwill
    
    
    6,110Others
    
    
    41Intangible assets and other:Core developed technology
    
    
    970Customer relationships
    
    
    810Contractual backlog
    
    
    1,36016,176Direct acquisition costs
    
    
    410Purchase price
    
    $
    15,766
  Intangible Assets
 Goodwill and Other Intangibles
  9/30/2007Gross
    
    Accumulated
    
    Net bookAmount
    
    Amortization
    
    valueIntangible assets and other:Core developed technology
    
    $
    970
    
    
    $
    (280
    )
    
    $
    690Customer relationships
    
    
    810
    
    
    
    (243
    )
    
    
    567Contractual backlog
    
    
    1,360
    
    
    
    (1,088
    )
    
    
    272Total
    
    $
    3,140
    
    
    $
    (1,611
    )
    
    $
    1,529
  2007
    
    $
    4452008
    
    
    6972009
    
    
    2372010
    
    
    1502011
    
    
    $
    1,529
 11. License of Sunplus Intellectual Property and Related Revenue Transaction
  14




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12. Related Party Transaction
       13. Stock Repurchase Program
  15




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This report contains forward-looking statements within the meaning of Section 21E of the
Exchange Act and Section 27A of the Securities Act of 1933. These forward-looking statements
involve a number of risks and uncertainties, including those identified in the section of this Form
10-Q entitled Factors Affecting Future Results, that may cause actual results to differ
materially from those discussed in, or implied by, such forward-looking statements. Forward-looking
statements within this Form 10-Q are identified by words such as believes, anticipates,
expects, intends, estimates, may, will and variations of such words and other similar
expressions. However, these words are not the only means of identifying such statements. In
addition, any statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. We undertake no obligation to
publicly release the results of any revisions to these forward-looking statements that may be made
to reflect events or circumstances occurring subsequent to the filing of this Form 10-Q with the
SEC. Our actual results could differ materially from those anticipated in, or implied by,
forward-looking statements as a result of various factors, including the risks outlined elsewhere
in this report. Readers are urged to carefully review and consider the various disclosures made by
Silicon Image, Inc. in this report and in our other reports filed with the SEC that attempt to
advise interested parties of the risks and factors that may affect our business.
 Silicon Image and Simplay HD are trademarks, registered trademarks or service marks of Silicon
Image, Inc. in the United States and other countries. HDMI and High-Definition Multimedia
Interface are trademarks or registered trademarks of HDMI Licensing, LLC in the United States and
other countries, and are used under license from HDMI Licensing, LLC. All other trademarks and
registered trademarks are the property of their respective owners.
 Available Information
 www.siliconimage.com.
 Overview
     16




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Market Opportunity
     17




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New Initiatives
     Future Directions
  18




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There are
risks to our global strategy.
 Concentrations, Commitments and Contingencies
    Critical Accounting Policies
  19




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Results of Operations
 REVENUE
 Three months ended September 30,
    
    
    Nine months ended September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(dollars in thousands)
    
    
    (dollars in thousands)Product revenue
    
    $
    74,173
    
    
    $
    69,149
    
    
    
    7.3
    %
    
    $
    195,715
    
    
    $
    184,096
    
    
    
    6.3
    %Development,
licensing and
royalty revenue
    
    
    12,109
    
    
    
    9,178
    
    
    
    31.9
    %
    
    
    39,457
    
    
    
    23,909
    
    
    
    65.0
    %Total revenue
    
    $
    86,282
    
    
    $
    78,327
    
    
    
    10.2
    %
    
    $
    235,172
    
    
    $
    208,005
    
    
    
    13.1
    %
 Three months ended September 30,
    
    
    Nine months ended September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(dollars in thousands)
    
    
    (dollars in thousands)Consumer Electronics (1)
    
    $
    66,589
    
    
    $
    54,265
    
    
    
    22.7
    %
    
    $
    176,978
    
    
    $
    137,874
    
    
    
    28.4
    %Personal Computers (1)
    
    
    10,992
    
    
    
    14,462
    
    
    
    -24.0
    %
    
    
    33,234
    
    
    
    37,968
    
    
    
    -12.5
    %Storage (1)
    
    
    8,701
    
    
    
    9,600
    
    
    
    -9.4
    %
    
    
    24,960
    
    
    
    32,163
    
    
    
    -22.4
    %Total revenue
    
    $
    86,282
    
    
    $
    78,327
    
    
    
    10.2
    %
    
    $
    235,172
    
    
    $
    208,005
    
    
    
    13.1
    %
 
 (1)
    
    Includes development, licensing and royalty revenue Three months ended September 30,
    
    
    Nine months ended September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(dollars in thousands)
    
    
    (dollars in thousands)Consumer Electronics
    
    $
    58,644
    
    
    $
    47,793
    
    
    
    22.7
    %
    
    $
    148,886
    
    
    $
    121,587
    
    
    
    22.5
    %Personal Computers
    
    
    9,326
    
    
    
    13,945
    
    
    
    -33.1
    %
    
    
    29,237
    
    
    
    36,414
    
    
    
    -19.7
    %Storage
    
    
    6,203
    
    
    
    7,411
    
    
    
    -16.3
    %
    
    
    17,591
    
    
    
    26,095
    
    
    
    -32.6
    %Development, licensing and
royalty revenue
    
    
    12,109
    
    
    
    9,178
    
    
    
    31.9
    %
    
    
    39,458
    
    
    
    23,909
    
    
    
    65.0
    %Total revenue
    
    $
    86,282
    
    
    $
    78,327
    
    
    
    10.2
    %
    
    $
    235,172
    
    
    $
    208,005
    
    
    
    13.1
    %
  20




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COST OF REVENUE AND GROSS PROFIT
 Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    Change(dollars in thousands)
    
    (dollars in thousands)Cost of revenue (1)
    
    $
    37,500
    
    
    $
    32,721
    
    
    
    14.6
    %
    
    $
    105,196
    
    
    $
    87,854
    
    
    
    19.7
    %Total gross profit
    
    $
    48,782
    
    
    $
    45,606
    
    
    
    7.0
    %
    
    $
    129,976
    
    
    $
    120,151
    
    
    
    8.2
    %Gross profit margin
    
    
    56.5
    %
    
    
    58.2
    %
    
    
    
    
    
    
    55.3
    %
    
    
    57.8
    %(1)   Includes stock-based
compensation expense
    
    $
    421
    
    
    $
    772
    
    
    
    
    
    
    $
    1,210
    
    
    $
    1,954
   OPERATING EXPENSES
 Research and Development (R&D)
 Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    Change(dollars in thousands)
    
    (dollars in thousands)Research and development (1)
    
    $
    20,489
    
    
    $
    16,866
    
    
    
    21.5
    %
    
    $
    56,709
    
    
    $
    47,611
    
    
    
    19.1
    %Percentage of total revenue
    
    
    23.7
    %
    
    
    21.5
    %
    
    
    
    
    
    
    24.1
    %
    
    
    22.9
    %
 
 (1)   Includes stock-based compensation expense
    
    $
    2,181
    
    
    $
    3,781
    
    
    
    
    
    
    $
    6,545
    
    
    $
    9,393
   21




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Selling, General and Administrative (SG&A)
 Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeSelling, general and administrative (1)
    
    $
    16,827
    
    
    $
    17,472
    
    
    
    -3.7
    %
    
    $
    51,122
    
    
    $
    49,496
    
    
    
    3.3
    %Percentage of total revenue
    
    
    19.5
    %
    
    
    22.3
    %
    
    
    
    
    
    
    21.7
    %
    
    
    23.8
    %
 
 (1)   Includes stock-based compensation
expense
    
    $
    2,731
    
    
    $
    4,073
    
    
    
    
    
    
    $
    6,796
    
    
    $
    11,113
  Amortization of Intangible Assets
 Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeAmortization of intangible assets
    
    $
    540
    
    
    $
    78
    
    
    
    592.3
    %
    
    $
    1,692
    
    
    $
    430
    
    
    
    293.5
    %Percentage of total revenue
    
    
    0.6
    %
    
    
    0.1
    %
    
    
    
    
    
    
    0.7
    %
    
    
    0.2
    %
  Interest Income and other, net
 Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeInterest income and other, net
    
    $
    2,302
    
    
    $
    2,623
    
    
    
    -12.2
    %
    
    $
    8,618
    
    
    $
    6,181
    
    
    
    39.4
    %Percentage of total revenue
    
    
    2.7
    %
    
    
    3.3
    %
    
    
    
    
    
    
    3.7
    %
    
    
    3.0
    %
  Provision for income taxes.
 Three months ended September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeProvision for income taxes
    
    $
    9,118
    
    
    $
    5,771
    
    
    
    58.0
    %
    
    $
    17,673
    
    
    $
    12,603
    
    
    
    40.2
    %Percentage of total revenue
    
    
    10.6
    %
    
    
    7.4
    %
    
    
    
    
    
    
    7.5
    %
    
    
    6.1
    %
  22




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Accounting for Uncertainty in Income Taxesan
interpretation of FASB Statement No. 109
  LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
  September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    Change(dollars in thousands)Total cash, cash equivalents and short-term investments
    
    $
    225,689
    
    
    $
    235,790
    
    
    $
    (10,101
    )Cash provided by operating activities
    
    $
    37,001
    
    
    $
    51,847
    
    
    $
    (14,846
    )Cash
provided by (used in) investing activities
    
    
    35,251
    
    
    
    (120,205
    )
    
    
    155,456Cash provided by (used in) financing activities
    
    
    (23,439
    )
    
    
    30,803
    
    
    
    (54,242
    )Effect of exchange rate changes on cash & cash equivalents
    
    
    (76
    )
    
    
    
    
    
    
    (76
    )Net increase (decrease) in cash and cash
equivalents
    
    $
    48,737
    
    
    $
    (37,555
    )
    
    $
    86,292
 Cash, Cash Equivalents and Short-Term Investments
  Operating Activities
  23




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##### Table of Contents



Investing and Financing Activities
  Commitments and Contractual Obligations
  Contractual obligations
    
    Total
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    More than 5 yearsOperating lease obligations
    
    $
    9,418
    
    
    $
    3,519
    
    
    $
    4,236
    
    
    $
    1,663
    
    
    $
    Inventory purchase obligations
    
    
    8,853
    
    
    
    8,853
    
    
    
    
    
    
    
    
    
    
    
    Intangibles purchase commitments
    
    
    31,371
    
    
    
    23,156
    
    
    
    8,215
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    49,642
    
    
    $
    35,528
    
    
    $
    12,451
    
    
    $
    1,663
    
    
    $
    
 Unrecognized Tax Benefits
  Stock Repurchase Program
  Long-term liquidity
  24




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
  0.5%
    
    1.0%
    
    1.5%200.000
    
    400,000
    
    600,000
 Foreign Currency Exchange Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  25




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Part II. Other Information
 
 Item 1. Legal Proceedings
 .
  added added
  26




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##### Table of Contents



Item 1A. Risk Factors
  Our annual and quarterly operating results may fluctuate significantly and are difficult to
predict.
  
    
    the growth, evolution and rate of adoption of industry standards for our key markets,
including CE devices, digital-ready PCs and displays, and storage devices and systems;
    
    our product mix is evolving and has a greater dependence on the CE market which may be
more susceptible to ASP and competitive pressures than other lines of business;
    
    the fact that our licensing revenue is heavily dependent on a few key licensing
transactions being completed for any given period, the timing of which is not always
predictable and is especially susceptible to delay beyond the period in which completion is
expected, and our concentrated dependence on a few licensees in any period for substantial
portions of our expected licensing revenue and profits;
    
    the fact that our licensing revenue has been uneven and unpredictable over time, and is
expected to continue to be uneven and unpredictable for the foreseeable future, resulting in
considerable fluctuation in the amount of revenue recognized in a particular quarter;
    
    competitive pressures, such as the ability of competitors to successfully introduce
products that are more cost-effective or that offer greater functionality than our products,
including integration into their products of functionality offered by our
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products, the prices set by competitors for their products, and the potential for alliances,
combinations, mergers and acquisitions among our competitors;
    
    average selling prices of our products, which are influenced by competition and
technological advancements, among other factors;
    
    government regulations regarding the timing and extent to which digital content must be
made available to consumers;
    
    the availability of other semiconductors or other key components that are required to
produce a complete solution for the customer; usually, we supply one of many necessary
components; and
    
    the cost of components for our products and prices charged by the third parties who
manufacture, assemble and test our products.
  Our future annual and quarterly operating results are highly dependent upon how well we manage
our business.
  
    
    our ability to manage product introductions and transitions, develop necessary sales and
marketing channels, and manage other matters necessary to enter new market segments;
    
    our ability to successfully manage our business in multiple markets such as CE, PC, and
storage, which may involve additional research and development, marketing or other costs and
expenses;
    
    our ability to enter into licensing deals when expected and make timely deliverables and
milestones on which recognition of revenue often depends;
    
    our ability to engineer customer solutions that adhere to industry standards in a timely
and cost-effective manner;
    
    our ability to achieve acceptable manufacturing yields and develop automated test
programs within a reasonable time frame for our new products;
    
    our ability to manage joint ventures and projects, design services, and our supply chain
partners;
    
    our ability to monitor the activities of our licensees to ensure compliance with license
restrictions and remittance of royalties;
    
    our ability to structure our organization to enable achievement of our operating
objectives and to meet the needs of our customers and markets;
    
    the success of the distribution and partner channels through which we choose to sell our
products and
    
    our ability to manage expenses and inventory levels;
    
    our ability to successfully integrate acquired businesses and technologies into our
operations; and
    
    our ability to successfully implement our plans to transfer certain of our technology,
sales administration and procurement functions offshore to be closer to customers and
suppliers, lower our tax liability, and reduce certain costs.
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The licensing component of our business strategy increases business risk and volatility.
  We face intense competition in our markets, which may lead to reduced revenue from sales of our
products and increased losses.
   Our success depends in part on demand for our new products.
  29




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Demand for our consumer electronics products is dependent on continued adoption and widespread
implementation of the HDMI specification.
        30




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We will have difficulty selling our products if customers do not design our products into their
product offerings or if our customers product offerings are not commercially successful.
  Our products typically have lengthy sales cycles. A customer may decide to cancel or change its
product plans, which could cause us to lose anticipated sales. In addition, our average product
life cycles tend to be short and, as a result, we may hold excess or obsolete inventory that could
adversely affect our operating results.
   Our customer may not purchase anticipated levels of products, which can result in increased
inventory levels
  We depend on a few key customers and the loss of any of them could significantly reduce our
revenue.
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##### Table of Contents




    
    one or more of our key customers, including distributors, becomes insolvent or goes out
of business;
    
    one or more of our key customers or distributors significantly reduces, delays or cancels
orders; and/or
    
    one or more key customers select products manufactured by one of our competitors for
inclusion in their future product generations.
  We sell our products through distributors, which limits our direct interaction with our customers,
therefore reducing our ability to forecast sales and increasing the complexity of our business.
  
    
    manage a more complex supply chain;
    
    monitor and manage the level of inventory of our products at each distributor;
    
    estimate the impact of credits, return rights, price protection and unsold inventory at
distributors; and
    
    monitor the financial condition and credit-worthiness of our distributors, many of which
are located outside of the United States, and the majority of which are not publicly traded.
   Our success depends on the development and introduction of new products, which we may not be able
to do in a timely manner because the process of developing high-speed semiconductor products is
complex and costly.
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##### Table of Contents




    
    accurate prediction of market requirements and evolving standards, including enhancements
or modifications to existing standards such as HDMI, HDCP, DVI, SATA I and SATA II;
    
    identification of customer needs where we can apply our innovation and skills to create
new standards or areas for product differentiation that improve our overall competitiveness
either in an existing market or in a new market;
    
    development of advanced technologies and capabilities, and new products that satisfy
customer requirements;
    
    competitors and customers integration of the functionality of our products into their
products, which puts pressure on us to continue to develop and introduce new products with
new functionality;
    
    timely completion and introduction of new product designs;
    
    management of product life cycles;
    
    use of leading-edge foundry processes and achievement of high manufacturing yields and
low cost testing;
    
    market acceptance of new products; and
    
    market acceptance of storage processor architectures like SteelVine.
  There are risks to our global strategy
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##### Table of Contents



We have made acquisitions in the past and may make acquisitions in the future, if advisable, and
these acquisitions involve numerous risks.
  
    
    difficulty and increased costs in assimilating employees, including our possible
inability to keep and retain key employees of the acquired business or challenges associated
with managing employees in multiple geographic jurisdictions;
    
    disruption of our ongoing business;
    
    discovery of undisclosed liabilities of the acquired companies and legal disputes with
founders or shareholders of acquired companies;
    
    inability to successfully incorporate acquired technology and operations into our
business and maintain uniform standards, controls, policies and procedures;
    
    inability to commercialize acquired technology; and
    
    the need to take impairment charges or write-downs with respect to acquired assets.
  Our acquisition of sci-worx GmbH exposes us to a variety of risks.
  Industry cycles may strain our management and resources.
  
    
    improve operational and financial systems;
    
    train and manage our employee base;
    
    successfully integrate operations and employees of businesses we acquire or have
acquired;
    
    attract, develop, motivate and retain qualified personnel with relevant experience; and
    
    adjust spending levels according to prevailing market conditions.
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##### Table of Contents



The cyclical nature of the semiconductor industry may create constrictions in our foundry, test
and assembly capacity.
  We depend on third-party sub-contractors to manufacture, assemble and test nearly all of our
products, which reduce our control over the production process.
  
    
    reduced control over delivery schedules, quality assurance, manufacturing yields and
production costs;
    
    lack of guaranteed production capacity or product supply, potentially resulting in higher
inventory levels;
    
    lack of availability of, or delayed access to, next-generation or key process
technologies; and
    
    limitations on our ability to transition to alternate sources if services are unavailable
from primary suppliers.
  The complex nature of our production process, which can reduce yields and prevent identification
of problems until well into the production cycle or, in some cases, after the product has been
shipped.
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We face foreign business, political and economic risks because a majority of our products and our
customers products are manufactured and sold outside of the United States.
  
    
    political, social and economic instability;
    
    exposure to different business practices and legal standards, particularly with respect
to intellectual property and employment;
    
    natural disasters and public health emergencies;
    
    nationalization of business and blocking of cash flows;
    
    trade and travel restrictions
    
    the imposition of governmental controls and restrictions;
    
    burdens of complying with a variety of foreign laws;
    
    import and export license requirements and restrictions of the United States and each
other country in which we operate;
    
    unexpected changes in regulatory requirements;
    
    foreign technical standards;
    
    changes in taxation and tariffs;
    
    difficulties in staffing and managing international operations;
    
    fluctuations in currency exchange rates;
    
    difficulties in collecting receivables from foreign entities or delayed revenue
recognition;
    
    expense and difficulties in protecting our intellectual property in foreign
jurisdictions;
    
    exposure to possible litigation or claims in foreign jurisdictions; and
    
    potentially adverse tax consequences.
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The success of our business depends upon our ability to adequately protect our intellectual
property.
  Our participation in working groups for the development and promotion of industry standards in our
target markets, including the DVI, and HDMI specifications, requires us to license some of our
intellectual property for free or under specified terms and conditions, which may make it easier
for others to compete with us in such markets.
  
    
    we must license for free specific elements of our intellectual property to others for use
in implementing the DVI specification; and we may license additional intellectual property
for free as the DDWG promotes enhancements to the DVI specification.
    
    we must license specific elements of our intellectual property to others for use in
implementing the HDMI specification and we may license additional intellectual property as
the HDMI founders group promotes enhancements to the HDMI specification; and
    
    we have agreed to license specific elements of our intellectual property to other UDI
promoters and third parties who execute an adopters agreement.
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Our success depends in part on our relationships with Sunplus and other strategic partners.
   Our success depends on managing our relationship with Intel.
  
    
    Intel and Silicon Image have been parties to business cooperation agreements;
    
    Intel and Silicon Image are parties to a patent cross-license;
    
    Intel and Silicon Image worked together to develop HDCP;
    
    an Intel subsidiary has the exclusive right to license HDCP, of which we are a licensee;
    
    Intel and Silicon Image were two of the promoters of the DDWG;
    
    Intel and Silicon Image are two of the promoters of the Unified Display Interface Working
Group;
    
    Intel is a promoter of the SATA working group, of which we are a contributor;
    
    Intel is a supplier to us and a customer for our products;
    
    we believe that Intel has the market presence to drive adoption of SATA by making it
widely available in its chipsets and motherboards, which could affect demand for our
products;
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##### Table of Contents




    
    we believe that Intel has the market presence to affect adoption of HDMI by either
endorsing complementary technology or promulgating a competing standard, which could affect
demand for our products;
    
    Intel may potentially integrate the functionality of our products, including SATA, DVI,
or HDMI into its own chips and chipsets, thereby displacing demand for some of our products;
    
    Intel may design new technologies that would require us to re-design our products for
compatibility, thus increasing our R&D expense and reducing our revenue;
    
    Intels technology, including its 845G chipset, may lower barriers to entry for other
parties who may enter the market and compete with us; and
    
    Intel may enter into or continue relationships with our competitors that can put us at a
relative disadvantage.
  We have granted Intel rights with respect to our intellectual property, which could allow Intel to
develop products that compete with ours or otherwise reduce the value of our intellectual
property.
  We may become engaged in additional intellectual property litigation that could be time-consuming,
may be expensive to prosecute or defend, and could adversely affect our ability to sell our
product.
   
    
    stop selling products or using technology that contains the allegedly infringing
intellectual property;
    
    attempt to obtain a license to the relevant intellectual property, which license may not
be available on reasonable terms or at all; and
    
    attempt to redesign products that contain the allegedly infringing intellectual property.
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We have entered into, and may again be required to enter into, patent or other intellectual
property cross-licenses.
  We indemnify certain of our licensing customers against infringement.
  We must attract and retain qualified personnel to be successful, and competition for qualified
personnel is increasing in our market.
  Share
Based Payment
 We have experienced transitions in our management team, our board of directors and our independent
registered public accounting firm in the past and may continue to do so in the future.
  
    
    In January 2005, Steve Laub (who replaced David Lee in November 2004) resigned from the
positions of chief executive officer and president and from the board of directors, Steve
Tirado was appointed as chief executive officer and president and to the board as well, and
Chris Paisley was appointed chairman of the board of directors.
    
    In February 2005, Jaime Garcia-Meza was appointed as vice president of our storage
business.
    
    In April 2005, Robert C. Gargus retired from the position of chief financial officer and
Darrel Slack was appointed as his successor.
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
    
    In April 2005, four of our then independent outside directors, David Courtney (chairman
of the audit committee), Keith McAuliffe, Chris Paisley (chairman of the board) and Richard
Sanquini, resigned from our board of directors and board committees.
    
    In April 2005, Darrel Slack, our then chief financial officer, was elected to our board
of directors.
    
    In May 2005, Masood Jabbar and Peter Hanelt were elected to our board of directors.
    
    In June 2005, David Lee did not stand for re-election as a director at our annual meeting
of stockholders, and accordingly, Dr. Lee resigned from our board of directors.
    
    In June 2005, PricewaterhouseCoopers LLP resigned as our independent registered public
accounting firm. In July 2005, we appointed Deloitte & Touche LLP as our new independent
registered public accounting firm.
    
    In August 2005, Darrel Slack began a personal leave of absence.
    
    In August 2005, Dale Brown resigned from the positions of chief accounting officer and
corporate controller.
    
    In August 2005, Robert Freeman was appointed as interim chief financial officer and chief
accounting officer.
    
    In September 2005, Darrel Slack resigned from the position of chief financial officer and
from our board of directors and the board of directors of HDMI Licensing, LLC, our
wholly-owned subsidiary.
    
    In October 2005, William George was elected to our board of directors.
    
    In October 2005, Robert Bagheri resigned from the position of executive vice president of
operations.
    
    In October 2005, John LeMoncheck, then vice president, consumer electronics and
PC/display, left Silicon Image.
    
    In October 2005, John Shin was appointed as interim vice president, consumer electronics
and PC/display businesses and served in that position until February 2006. Mr. Shin serves
as vice president of engineering, and has held that position since October 2003.
    
    In November 2005, Robert Freemans position changed from interim chief financial officer
to chief financial officer.
    
    In December 2005, William Raduchel was elected to our board of directors.
    
    In January 2006, Dale Zimmerman was appointed as our vice president of worldwide
marketing.
    
    In February 2006, John Hodge was elected to our board of directors.
    
    In September 2006, Patrick Reutens resigned from the position of chief legal officer.
    
    In January 2007, Edward Lopez was appointed as our chief legal officer.
    
    In February 2007, David Hodges advised our board of directors that he had decided to
retire and as such he did not stand for reelection to our board of directors when his term
expired at our 2007 Annual Meeting of Stockholders.
    
    In April 2007, Robert R. Freeman, announced his intention to retire from his position as
Chief Financial Officer.
    
    In April 2007, Rob Valiton resigned from his position as Vice President of Worldwide
Sales.
    
    In April 2007, Sal Cobar was appointed as Vice President of Worldwide Sales.
    
    In July 2007, Paul Dal Santo was appointed as Chief Operating Officer.
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##### Table of Contents




    
    In October 2007, Robert R. Freeman, resigned from his position as Chief Financial
Officer.
    
    In October 2007, Harold L. Covert was appointed as Chief Financial Officer.
  We have been and may continue to become the target of securities class action suits and derivative
suits which could result in substantial costs and divert management attention and resources.
  Our operations and the operations of our significant customers, third-party wafer foundries and
third-party assembly and test subcontractors are located in areas susceptible to natural
disasters.
   
    
    an earthquake or other disaster in the San Francisco Bay Area or the Los Angeles area
damaged our facilities or disrupted the supply of water or electricity to our headquarters
or our Irvine facility;
    
    an earthquake, typhoon or other disaster in Taiwan or Japan resulted in shortages of
water, electricity or transportation, limiting the production capacity of our outside
foundries or the ability of ASE to provide assembly and test services;
    
    an earthquake, typhoon or other disaster in Taiwan or Japan damaged the facilities or
equipment of our customers and distributors, resulting in reduced purchases of our products;
or
    
    an earthquake, typhoon or other disaster in Taiwan or Japan disrupted the operations of
suppliers to our Taiwanese or Japanese customers, outside foundries or ASE, which in turn
disrupted the operations of these customers, foundries or ASE and resulted in reduced
purchases of our products or shortages in our product supply.
 Continued terrorist attacks or war could lead to further economic instability and adversely affect
our operations, results of operations and stock price.
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##### Table of Contents



Changes in environmental rules and regulations could increase our costs and reduce our revenue.
  Provisions of our charter documents and Delaware law could prevent or delay a change in control,
and may reduce the market price of our common stock.
  
    
    authorizing the issuance of preferred stock without stockholder approval;
    
    providing for a classified board of directors with staggered, three-year terms;
    
    requiring advance notice of stockholder nominations for the board of directors;
    
    providing the board of directors the opportunity to expand the number of directors
without notice to stockholders;
    
    prohibiting cumulative voting in the election of directors;
    
    requiring super-majority voting to amend some provisions of our certificate of
incorporation and bylaws;
    
    limiting the persons who may call special meetings of stockholders; and
    
    prohibiting stockholder actions by written consent.
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##### Table of Contents



The price of our stock fluctuates substantially and may continue to do so.
  
    
    actual or anticipated changes in our operating results;
    
    changes in expectations of our future financial performance;
    
    changes in market valuations of same companies in our markets;
    
    changes in market valuations or expectations of future financial performance of our
vendors or customers;
    
    changes in our key executives and technical personnel; and
    
    announcements by us or our competitors of significant technical innovations, design wins,
contracts, standards or acquisitions.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (in thousands, except per share
amounts)
 Approximate DollarValue of SharesTotal Number
    
    Average
    
    Total Number of Shares
    
    that May Yet Beof Shares
    
    Price Paid
    
    Purchased as Part of
    
    Purchased Under thePeriod
    
    Purchased
    
    per Share
    
    Publicly Announced Plans
    
    PlanRepurchases from
August 1, 2007
through August 31,
2007
    
    
    1,250
    
    
    $
    5.56
    
    
    
    1,250
    
    
    $
    61,905
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
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Item 6. Exhibits
  10.01
    
    Employment offer letter with Paul Dal Santo dated July 23, 2007 (incorporated by reference
to Exhibit 10.01 to the Registrants current report on Form 8-K filed on August 20, 2007).10.02
    
    Amendment No. 1 to Transitional Employment and Separation Agreement between Robert Freeman
and the Registrant dated August 23, 2007 (incorporated by reference to Exhibit 10.01 to the
Registrants current report on Form 8-K filed on August 24, 2007).31.01
    
    Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 200231.02
    
    Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.01**
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.02**
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 **
    
    This exhibit is being furnished, rather than filed, and shall not be deemed incorporated by
reference into any filing of the registrant, in accordance with Item 601 of Regulation S-K. 45




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##### Table of Contents



Signatures
  Dated: November 7, 2007
    
    Silicon Image, Inc./s/ Harold L. Covert

Harold L. CovertChief Financial Officer (Principal Financial Officer)
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Exhibit Index
 10.01
    
    Employment offer letter with Paul Dal Santo dated July 23, 2007 (incorporated by reference
to Exhibit 10.01 to the Registrants current report on Form 8-K filed on August 20, 2007).10.02
    
    Amendment No. 1 to Transitional Employment and Separation Agreement between Robert Freeman
and the Registrant dated August 23, 2007 (incorporated by reference to Exhibit 10.01 to the
Registrants current report on Form 8-K filed on August 24, 2007).31.01
    
    Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 200231.02
    
    Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.01**
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.02**
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 **
    
    This exhibit is being furnished, rather than filed, and shall not be deemed incorporated by
reference into any filing of the Registrant, in accordance with Item 601 of Regulation S-K.