<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
(INCLUDING REGISTRATION OF SHARES FOR RESALE
UNDER A FORM S-3 PROSPECTUS)
UNDER
THE SECURITIES ACT OF 1933
------------------------
SILICON IMAGE, INC.
(Exact name of the Registrant as specified in its charter)
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<S> <C>
DELAWARE 77-0517246
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
1060 E. ARQUES AVENUE
SUNNYVALE, CA 94086
(Address of principal executive offices, including zip code)
NON-PLAN RESTRICTED STOCK PURCHASE AGREEMENTS OF REGISTRANT
(Full titles of the plans)
DAVID D. LEE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SILICON IMAGE, INC.
1060 E. ARQUES AVENUE
SUNNYVALE, CA 94086
(408) 616-4000
(Name, address and telephone number,
including area code, of agent for service)
Copy to:
DAVID K. MICHAELS, ESQ.
ANDREW Y. LUH, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
(Counsel to the Registrant)
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED PROPOSED
AMOUNT TO MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value...... 1,222,175(1) $82.38(2) $100,676,666 $26,579
</TABLE>
(1) Represents 1,222,175 shares issued by the Registrant pursuant to non-plan
restricted stock purchase agreements.
(2) Estimated as of January 27, 2000 pursuant to Rule 457(c) solely for the
purpose of calculating the registration fee, based on the average of the
high and low prices of the Registrant's common stock as reported by the
Nasdaq National Market on January 27, 2000.
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<PAGE>
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PROSPECTUS
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SILICON IMAGE, INC.
Up to 1,222,175 Shares of Common Stock
---------------------
The 1,222,175 shares of common stock covered by this prospectus were
previously issued by Silicon Image pursuant to non-plan restricted stock
purchase agreements. These shares may be offered and sold over time by the
stockholders named in this prospectus under the heading "Selling Stockholders,"
by their pledgees or donees, or by other transferees that receive the shares in
transfers other than public sales.
The selling stockholders may sell their Silicon Image shares in the open
market at prevailing market prices, or in private transactions at negotiated
prices. They may sell the shares directly, or may sell them through
underwriters, brokers or dealers. Underwriters, brokers, or dealers may receive
discounts, concessions or commissions from the selling stockholders or from the
purchaser, and this compensation might be in excess of the compensation
customary in the type of transaction involved. See "Plan of Distribution."
We will not receive any of the proceeds from the sale of these shares.
Our common stock currently trades on the Nasdaq National Market under the
symbol "SIMG." The last reported sale price on January 27, 2000 was $80.63 per
share.
------------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE
CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is January 18, 2000
------------------------
In connection with this offering, no person is authorized to give any
information or to make any representations not contained in this prospectus. If
information is given or representations are made, you may not rely on that
information or representations as having been authorized by us. This prospectus
is neither an offer to sell nor a solicitation of an offer to buy any securities
other than those registered by this prospectus, nor is it an offer to sell or a
solicitation of an offer to buy securities where an offer or solicitation would
be unlawful. You may not imply from the delivery of this prospectus, nor from
any sale made under this prospectus, that our affairs are unchanged since the
date of this prospectus or that the information contained in this prospectus is
correct as of any time after the date of this prospectus.
<PAGE>
TABLE OF CONTENTS
------------------------
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Summary................................ 3
Risk Factors........................... 5
Use of Proceeds........................ 17
Dilution............................... 17
Selling Stockholders................... 18
Plan of Distribution................... 20
Legal Matters.......................... 21
Experts................................ 21
Where You Can Find More Information.... 21
</TABLE>
------------------------
THIS PROSPECTUS INCLUDES FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934. WHEN USED IN THIS PROSPECTUS, THE WORDS "ANTICIPATE,"
"BELIEVE," "ESTIMATE," "WILL," "MAY," "INTEND" AND "EXPECT" AND SIMILAR
EXPRESSIONS IDENTIFY CERTAIN OF SUCH FORWARD-LOOKING STATEMENTS. ALTHOUGH WE
BELIEVE THAT OUR PLANS, INTENTIONS AND EXPECTATIONS REFLECTED IN SUCH
FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CAN GIVE NO ASSURANCE THAT SUCH
PLANS, INTENTIONS OR EXPECTATIONS WILL BE ACHIEVED. ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS COULD DIFFER MATERIALLY FROM THOSE CONTEMPLATED, EXPRESSED OR
IMPLIED BY THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PROSPECTUS.
IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM OUR
FORWARD-LOOKING STATEMENTS ARE SET FORTH IN THIS PROSPECTUS, INCLUDING UNDER THE
HEADING "RISK FACTORS". THESE FACTORS ARE NOT INTENDED TO REPRESENT A COMPLETE
LIST OF THE GENERAL OR SPECIFIC FACTORS THAT MAY AFFECT US. IT SHOULD BE
RECOGNIZED THAT OTHER FACTORS, INCLUDING GENERAL ECONOMIC FACTORS AND BUSINESS
STRATEGIES, MAY BE SIGNIFICANT, PRESENTLY OR IN THE FUTURE, AND THE FACTORS SET
FORTH HEREIN MAY AFFECT US TO A GREATER EXTENT THAN INDICATED. ALL
FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR PERSONS ACTING ON OUR BEHALF
ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS SET FORTH
HEREIN. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE ANY
FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
UNLESS THE CONTEXT OTHERWISE REQUIRES, THE TERMS "WE," "OUR," "US," "THE
COMPANY" AND "SILICON IMAGE" REFER TO SILICON IMAGE, INC., A DELAWARE
CORPORATION.
------------------------
2
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PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
THIS SUMMARY IS NOT COMPLETE AND DOES NOT CONTAIN ALL THE INFORMATION YOU SHOULD
CONSIDER BEFORE BUYING SHARES IN THIS OFFERING. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS. THE
OUTCOME OF THE EVENTS DESCRIBED IN THESE FORWARD-LOOKING STATEMENTS IS SUBJECT
TO RISKS AND ACTUAL RESULTS COULD DIFFER MATERIALLY. THE SECTION ENTITLED "RISK
FACTORS" CONTAINS A DISCUSSION OF SOME OF THE FACTORS THAT COULD CONTRIBUTE TO
THESE DIFFERENCES.
SILICON IMAGE, INC.
We develop and market semiconductors for applications that require
high-bandwidth, cost-effective, integrated solutions for high-speed data
communications. We are initially focusing our technology on the local
interconnect between host systems, such as PCs, set-top boxes and DVD players,
and digital displays, such as flat panel displays and CRTs. Our current products
enable host systems to transmit digital video data and enable displays to
receive and manipulate digital video data. As with other consumer electronic
devices, such as digital cellular phones, significant benefits can be achieved
by converting displays from analog to digital and by replacing conventional
analog connections between host systems and displays with digital connections.
Recognizing the need for a cost-effective, high-speed digital display
solution, we developed a digital interconnect technology and began shipping
semiconductors for digital displays in 1997. To provide a worldwide, freely
available specification for an all-digital display solution, we, together with
Intel, Compaq, IBM, Hewlett-Packard, NEC and Fujitsu, formed the Digital Display
Working Group, or DDWG, to define such a specification based on our technology.
In April 1999, the DDWG published the Digital Visual Interface, or DVI,
specification, which defines a high-speed data communications link between host
systems and digital displays. The formation of the DDWG and the release of the
DVI specification have accelerated the shift of display technology to digital.
Our key products are based on a branded family of interface technology
called PanelLink. The PanelLink product family spans multiple host and display
types. PanelLink is our proprietary implementation of the DVI specification, and
is based on several key intellectual properties developed while creating high
speed digital communication circuits using low cost manufacturing methods. The
PanelLink architecture includes products that integrate PanelLink receiver
technology with additional functionality to enable low-cost, intelligent
displays for the mass market. Our products eliminate the need for analog
technology in host systems and displays, improve image quality and allow display
manufacturers to increase the functionality of their products. Our solutions are
based on innovations that provide:
HIGH-SPEED--our technology enables data to be transmitted at the
multi-gigabit rates needed to support high resolution displays;
HIGH INTEGRATION--our products incorporate technology for high speed digital
communications with functions such as digital image processing and display
control; and
COST-EFFECTIVENESS--we are able to produce products that provide
multi-gigabit data transmission using standard foundry processes. Because our
products integrate a number of functions in a single semiconductor, they
eliminate the need for multiple components.
Our objective is to be a leading provider of semiconductor solutions that
enable high-speed digital communications for targeted markets. Key elements of
our strategy are to:
- Target the display market first
- Promote open industry standards
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- Drive broad adoption of digital-ready host systems across multiple markets
- Increase the intelligence of displays through highly-integrated receiver
solutions
- Maintain technology leadership
- Penetrate new markets and applications
As of December 31, 1999, we had shipped over seven million units of our
products. Our products are incorporated in host systems and displays sold by
leading manufacturers such as Apple, ATI, Compaq, Diamond Multimedia, Fujitsu,
Gateway, Hitachi, IBM, LG, NEC, Number Nine, Princeton Graphics, Samsung, Sharp,
Toshiba and ViewSonic.
We incorporated in California on January 1, 1995 and reincorporated in
Delaware in September 1999. Our address is 1060 E. Arques Avenue, Sunnyvale, CA
94086, and our telephone number is (408) 616-4000.
THE OFFERING
Each of the shares that may be offered under this prospectus were issued by
us pursuant to restricted stock purchase agreements. These shares are being
offered on a continuous basis under Rule 415 of the Securities Act of 1933, as
amended (the "Securities Act").
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<S> <C>
Common stock that may be offered by selling
stockholders........................................... 1,222,175 shares
Common stock to be outstanding after this offering....... 25,742,873 shares*
Use of proceeds.......................................... We will not receive
any proceeds.
</TABLE>
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* Based on the number of shares outstanding as of January 27, 2000.
4
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE MAKING AN
INVESTMENT DECISION. YOU SHOULD CAREFULLY CONSIDER THESE RISK FACTORS, TOGETHER
WITH ALL OF THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR COMMON STOCK. THESE
FACTORS COULD CAUSE OUR FUTURE RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED
OR IMPLIED IN FORWARD-LOOKING STATEMENTS MADE BY US. THE RISKS AND UNCERTAINTIES
DESCRIBED BELOW ARE NOT THE ONLY ONES WE FACE. ADDITIONAL RISKS AND
UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY
ALSO HARM OUR BUSINESS. THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE DUE
TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT
OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO EVALUATE OUR FUTURE
PROSPECTS.
We were founded in 1995 and have a limited operating history, which makes an
evaluation of our future prospects difficult. In addition, the revenue and
income potential of our business and the digital display market are unproven. We
began volume shipments of our first products, the SiI 100 and SiI 101, in the
third quarter of 1997. The Digital Visual Interface specification, which is
based upon technology developed by us and used in many of our products, was
first published in April 1999. Accordingly, we face risks and difficulties
frequently encountered by early-stage companies in new and rapidly evolving
markets. If we do not successfully address these risks and difficulties, our
business would be seriously harmed.
WE HAVE A HISTORY OF LOSSES AND MAY NOT BECOME PROFITABLE.
We incurred net losses of $4.0 million in 1997, $6.6 million in 1998 and
$7.6 million in 1999, and we expect to continue to incur operating losses. As of
December 31, 1999, we had an accumulated deficit of approximately
$20.4 million. In the future, we expect research and development expenses and
selling, general and administrative expenses to increase. We will also incur
substantial non-cash charges relating to the amortization of unearned
compensation and issuances of warrants. Although our revenues have increased in
recent quarters, they may not continue to increase, and we may not achieve and
subsequently sustain profitability.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY IN THE FUTURE DUE TO
FACTORS RELATED TO OUR INDUSTRY AND THE MARKETS FOR OUR PRODUCTS.
Our quarterly operating results are likely to vary significantly in the
future based on a number of factors related to our industry and the markets for
our products over which we have little or no control. Any of these factors could
cause our stock price to fluctuate. These factors include:
- the growth of the market for digital-ready host systems and displays;
- the evolution of industry standards;
- the timing and amount of orders from customers;
- the deferral of customer orders in anticipation of new products or
enhancements by us or our competitors; and
- the announcement and introduction of products and technologies by our
competitors.
These factors are difficult to forecast and could seriously harm our
business.
5
<PAGE>
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY IN THE FUTURE DUE TO
FACTORS RELATED TO HOW WE MANAGE OUR BUSINESS.
Our quarterly operating results are likely to vary significantly in the
future based on a number of factors related to how we manage our business. Any
of these factors could cause our stock price to fluctuate. These factors
include:
- our ability to manage product transitions;
- the mix of the products we sell and the distribution channels through
which they are sold; and
- the availability of production capacity at the semiconductor foundries
that manufacture our products.
IN THE PAST, OUR INTRODUCTION OF NEW PRODUCTS AND OUR PRODUCT MIX HAVE AFFECTED
OUR QUARTERLY OPERATING RESULTS.
We also anticipate that the rate of orders from our customers may vary
significantly from quarter to quarter. Our expenses and inventory levels are
based on our expectations of future revenues, and our expenses are relatively
fixed in the short term. Consequently, if revenues in any quarter do not occur
when expected, expenses and inventory levels could be disproportionately high,
and our operating results for that quarter and, potentially, future quarters may
be harmed, adversely affecting the price of our stock.
GROWTH OF THE MARKET FOR OUR PRODUCTS DEPENDS ON THE WIDESPREAD ADOPTION AND USE
OF THE DVI SPECIFICATION.
Our business strategy is based upon the rapid and widespread adoption of the
DVI specification, which defines a high-speed data communication link between
host systems and digital displays. We have faced challenges related to the
acceptance of our products due to the incompatible technologies used by many
host and display manufacturers. Due to the recent release of the DVI
specification, we cannot predict whether or at what rate the DVI specification
will be adopted by manufacturers of host systems and displays. To date, very few
complete DVI-compliant systems that include both a host system and a display
have been shipped. Adoption of the DVI specification may be affected by the
availability of DVI-compliant transmitters, receivers, connectors and cables
necessary to implement the specification. Other specifications may also emerge,
which could adversely affect the acceptance of the DVI specification. For
example, a number of companies have promoted alternatives to the DVI
specification which use other interface technologies, such as LVDS. LVDS, or Low
Voltage Differential Signaling is a technology that is used in high speed data
transmission, primarily for notebook PCs. Any delay in the widespread adoption
of the DVI specification would seriously harm our business.
OUR SUCCESS IS DEPENDENT ON INCREASING SALES OF OUR RECEIVER AND DISPLAY
CONTROLLER PRODUCTS, WHICH DEPENDS ON HOST SYSTEM MANUFACTURERS INCLUDING
DVI-COMPLIANT TRANSMITTERS IN THEIR SYSTEMS.
Our success depends on increasing sales of our receiver and display
controller products to display manufacturers. In 1998, over 75% of our product
revenues resulted from the sale of transmitter products to manufacturers of host
systems. While revenues from the sale of receivers and display controllers have
increased over the past year, transmitters represented approximately 54% of our
product revenues in the fourth quarter of 1999. To increase sales of our
receiver and display controller products, we need manufacturers of host systems
to incorporate DVI-compliant transmitters into their systems, making these
systems digital-ready. Unless host systems are digital-ready, they will not
operate with digital displays. If we are unable to increase revenues from
receivers and display controllers, we would remain dependent on the market for
transmitters, which we expect to become particularly competitive. This would
seriously harm our business.
6
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OUR SUCCESS WILL DEPEND ON THE GROWTH OF THE DIGITAL DISPLAY MARKET.
Our business depends on the growth of the digital display market, which is
at an early stage of development. The potential size of this market and its rate
of development are uncertain and will depend on many factors, including:
- the number of digital-ready host systems;
- the rate at which display manufacturers replace analog interfaces with
DVI-compliant interfaces; and
- the availability of cost-effective semiconductors that implement a
DVI-compliant interface.
In addition, improvements to analog interfaces could slow the adoption of
digital displays. The failure of the digital display market to grow for any
reason would seriously harm our business.
GROWTH OF THE MARKET FOR OUR PRODUCTS DEPENDS ON AN INCREASE IN THE SUPPLY OF
FLAT PANEL DISPLAYS AND A CORRESPONDING DECREASE IN THEIR PRICE.
In order for the market for many of our products to grow, flat panel
displays must be widely available and affordable to consumers. Currently, there
is a limited supply of flat panels, and increasing the supply of flat panels is
a costly and lengthy process requiring significant capital investment.
Accordingly, we do not expect the current shortage of flat panels or their high
prices to change in the near term. In the past, the supply of flat panels has
been cyclical. We expect this pattern to continue. Under capacity in the flat
panel market may limit our ability to increase our revenues.
WE NEED TO OBTAIN DESIGN WINS IN ORDER TO INCREASE OUR REVENUES.
Our future success will depend on manufacturers of host systems and displays
designing our products into their systems. To achieve design wins--decisions by
those manufacturers to design our products into their systems--we must define
and deliver cost-effective, innovative and integrated semiconductor solutions.
Once a manufacturer has designed a supplier's products into its systems, the
manufacturer may be reluctant to change its source of components due to the
significant costs associated with qualifying a new supplier. Accordingly, the
failure to achieve design wins with key manufacturers of host systems and
displays will seriously harm our business.
OUR LENGTHY SALES CYCLE CAN RESULT IN UNCERTAINTY AND DELAYS IN GENERATING
REVENUES.
Because our products are based on new technology and standards, a lengthy
sales process, typically requiring several months or more, is often required
before potential customers begin the technical evaluation of our products. This
technical evaluation can then exceed six months. It can take an additional six
months before a customer commences volume shipments of systems that incorporate
our products. However, even when a manufacturer decides to design our products
into its systems, the manufacturer may never ship systems incorporating our
products. Given our lengthy sales cycle, we experience a delay between the time
we increase expenditures for research and development, sales and marketing
efforts and inventory and the time we generate revenues, if any, from these
expenditures. As a result, our business could be seriously harmed if a
significant customer reduces or delays orders or chooses not to release products
incorporating our products.
7
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OUR PARTICIPATION IN THE DIGITAL DISPLAY WORKING GROUP REQUIRES US TO LICENSE
SOME OF OUR INTELLECTUAL PROPERTY FOR FREE, WHICH MAY MAKE IT EASIER FOR OTHERS
TO COMPETE WITH US.
We are a member of the DDWG which published and promotes the DVI
specification. We have based our strategy on promoting and enhancing the DVI
specification and developing and marketing products based on the specification
and future enhancements. As a result:
- 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.
Accordingly, companies that implement the DVI specification in their
products can use specific elements of our intellectual property for free to
compete with us.
OUR RELATIONSHIP WITH INTEL DOES NOT GUARANTEE THAT INTEL WILL COOPERATE WITH US
IN THE FUTURE.
In September 1998, Intel agreed to work with us to develop and promote
adoption of the DVI specification and an enhanced version of the DVI
specification. As part of this effort, Intel has been an important founder of,
contributor to and promoter of the DDWG. We have benefited from Intel's
cooperation and support. We cannot be sure that Intel will continue to devote
attention and resources to the DDWG and the Silicon Image relationship. If Intel
were to breach our agreements with them, it is possible that no adequate remedy
would be available to us.
OUR RELATIONSHIP WITH INTEL INVOLVES COMPETITIVE RISKS.
We have entered into a patent cross-license with Intel in which each of us
granted the other a license to use the grantor's patents, except in identified
types of products. We believe that the scope of our license to Intel excludes
our current products and anticipated future products. Intel could, however,
exercise its rights under this agreement to use our patents to develop and
market other products that compete with ours, without payment to us.
Additionally, Intel's rights to our patents could reduce the value of our
patents to any third party who otherwise might be interested in acquiring rights
to use our patents in such products. Finally, Intel could endorse a competing
digital interface, or develop its own proprietary digital interface, which would
seriously harm our business.
WE DEPEND ON A FEW KEY CUSTOMERS AND THE LOSS OF ANY OF THEM COULD SIGNIFICANTLY
REDUCE OUR REVENUES.
Historically, a relatively small number of customers and distributors have
accounted for a significant portion of our product revenues. For the year ended
December 31, 1998, sales of transmitter products to Mitac, a third party
manufacturer, accounted for 54% of our total revenues, and ATI Technologies, a
leading graphics board manufacturer, accounted for 12% of our total revenues.
These manufacturers are significant suppliers to Compaq, who decided in 1998 to
design our transmitters into some of its desktop personal computer models. In
1999, Compaq reduced the number of its product models that included our
transmitters as a standard part. As a result, for the year ended December 31,
1999, sales to each of Mitac and ATI Technologies decreased to less than 10% of
our total revenues. Also during the year ended December 31, 1999 sales to
Kanematsu, a Japanese distributor, accounted for 17% of our total revenues,
Microtek, a Japanese distributor, accounted for 11% of our total revenues and
World Peace, a Taiwanese distributor, accounted for 16% of our total revenues.
As a result of customer concentration any of the following factors could
seriously harm our business:
- a significant reduction, delay or cancellation of orders from one or more
of our key customers or OEMs; or
8
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- if one or more significant customers selects products manufactured by a
competitor for inclusion in future product generations.
We expect our operating results to continue to depend on sales to or design
decisions of a relatively small number of host system and display OEMs and their
suppliers.
WE DO NOT HAVE LONG-TERM COMMITMENTS FROM OUR CUSTOMERS, AND WE ALLOCATE
RESOURCES BASED ON OUR ESTIMATES OF CUSTOMER DEMAND.
Our sales are made on the basis of purchase orders rather than long-term
purchase commitments. In addition, our customers may cancel or defer purchase
orders. We manufacture our products according to our estimates of customer
demand. This process requires us to make multiple demand forecast assumptions,
each of which may introduce error into our estimates. If we overestimate
customer demand, we may allocate resources to manufacturing products which we
may not be able to sell. As a result, we would have excess inventory, which
would increase our losses. Conversely, if we underestimate customer demand or if
sufficient manufacturing capacity is unavailable, we would forego revenue
opportunities, lose market share and damage our customer relationships.
OUR INCREASING DEPENDENCE ON SELLING THROUGH DISTRIBUTORS INCREASES THE RISKS
AND COMPLEXITY OF OUR BUSINESS.
Product revenues attributable to distributors have increased to 61% for the
year ended December 31, 1999 from 12% for the year ended December 31, 1998. Much
of this increase reflects design wins with new OEMs which rely on third-party
manufacturers or distributors to provide inventory management and purchasing
functions. Selling through distributors reduces our ability to forecast sales
and increases the complexity of our business, requiring us to:
- manage a more complex supply chain;
- manage the level of inventory at each distributor;
- provide for credits, return rights and price protection;
- 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.
Any failure to manage these challenges could seriously harm our business.
COMPETITION IN OUR MARKETS MAY LEAD TO REDUCED SALES OF OUR PRODUCTS, INCREASED
LOSSES AND REDUCED MARKET SHARE.
The high-speed communication, display and semiconductor industries are
intensely competitive. These markets are characterized by rapid technological
change, evolving standards, short product life cycles and decreasing prices. Our
current products face competition from a number of sources including analog
solutions, DVI-compliant solutions and other digital interface solutions. We
expect competition in our market to increase. For example, Genesis
Microchip, Inc. has announced that their customers are sampling a DVI-compliant
product that will compete with some of our PanelLink products and ATI
Technologies, Inc. and Silicon Integrated Systems Corporation are selling
graphics controller chips that include DVI-compliant transmitters. We do not
offer a graphics controller chip that includes an integrated transmitter.
Many of our competitors have longer operating histories and greater presence
in key markets, greater name recognition, access to large customer bases and
significantly greater financial, sales and marketing, manufacturing,
distribution, technical and other resources than we do. As a result, they may
9
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be able to adapt more quickly to new or emerging technologies and customer
requirements or devote greater resources to the promotion and sale of their
product than we may. In particular, well-established semiconductor companies,
such as Analog Devices, Intel, National Semiconductor and Texas Instruments, may
compete against us in the future. In addition, in the process of establishing
our technology as an industry standard, and to ensure rapid adoption of the DVI
specification, we have agreed to license specific elements of our intellectual
property to others for free. We have also licensed elements of our intellectual
property to Intel and other semiconductor companies and we may continue to do
so. Competitors could use these elements of our intellectual property to compete
against us. We cannot assure you that we can compete successfully against
current or potential competitors, or that competition will not seriously harm
our business by reducing sales of our products, increasing our losses and
reducing our market share.
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 IN COMPLEX AND COSTLY.
The development of new products is highly complex, and we have experienced
delays in completing the development and introduction of new products on several
occasions in the past, some of which exceeded six months. We expect to introduce
new transmitter, receiver and controller products in the future. We also plan to
develop our initial products designed for high-speed networking and storage
applications. As our products integrate new, more advanced functions, they
become more complex and increasingly difficult to design and debug. Successful
product development and introduction depends on a number of factors, including:
- accurate prediction of market requirements and evolving standards,
including enhancements to the DVI specification;
- development of advanced technologies and capabilities;
- definition of new products which satisfy customer requirements;
- timely completion and introduction of new product designs;
- use of leading-edge foundry processes and achievement of high
manufacturing yields; and
- market acceptance of the new products.
Accomplishing all of this is extremely challenging, time-consuming and
expensive. We cannot assure you that we will succeed. If we are not able to
develop and introduce our products successfully, our business will be seriously
harmed.
OUR FOUNDRY, TEST AND ASSEMBLY CAPACITY MAY BE LIMITED IN THE UPCOMING YEAR DUE
TO THE CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY.
We are dependent on third party suppliers for all of our foundry, test and
assembly functions. We depend on these suppliers to allocate to us a portion of
their capacity sufficient to meet our needs to produce products of acceptable
quality and with acceptable manufacturing yield and to deliver products to us in
a timely manner. These third party suppliers fabricate, test and assemble
products for other companies. If there is a decrease in available capacity, it
is likely that the lead time required to manufacture, test and assemble our
products will increase, which may result in our inability to meet our customers
demands and loss of customers, which would seriously harm our business.
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<PAGE>
WE DEPEND ON A THIRD-PARTY WAFER FOUNDRY TO MANUFACTURE NEARLY ALL OF OUR
PRODUCTS, WHICH REDUCES OUR CONTROL OVER THE MANUFACTURING PROCESS.
We do not own or operate a semiconductor fabrication facility. We rely on
Taiwan Semiconductor Manufacturing Company, an outside foundry, to produce
nearly all of our semiconductor products. Our reliance on independent foundries
involves a number of significant risks, including:
- reduced control over delivery schedules, quality assurance, manufacturing
yields and production costs;
- lack of guaranteed production capacity or product supply; and
- lack of availability of, or delayed access to, next-generation or key
process technologies.
We do not have a long-term supply agreement with Taiwan Semiconductor
Manufacturing Company, and instead obtain manufacturing services on a purchase
order basis. This foundry has no obligation to supply products to us for any
specific period, in any specific quantity or at any specific price, except as
set forth in a particular purchase order. Our requirements represent a small
portion of the total production capacity of this foundry and it may reallocate
capacity to other customers even during periods of high demand for our products.
If this foundry were to become unable or unwilling to continue manufacturing our
products in the required volumes, at acceptable quality, yields and costs, in a
timely manner, our business would be seriously harmed. As a result, we would
have to identify and qualify substitute foundries, which would be time consuming
and difficult, resulting in unforeseen manufacturing and operations problems.
This qualification process may also require significant effort by our customers.
In addition, if competition for foundry capacity increases, our product costs
may increase, and we may be required to pay significant amounts to secure access
to manufacturing services.
We may qualify additional foundries in the future. If we do not qualify
additional foundries, we may be exposed to increased risk of capacity shortages
due to our nearly complete dependence on Taiwan Semiconductor Manufacturing
Company.
WE DEPEND ON THIRD-PARTY SUBCONTRACTORS FOR ASSEMBLY AND TEST, WHICH REDUCES OUR
CONTROL OVER THE ASSEMBLY AND TEST PROCESSES.
Our semiconductor products are assembled and tested by several independent
subcontractors: Anam in Korea and Advanced Semiconductor Engineering in Taiwan,
Malaysia and California, and Singapore Technologies Assembly Test Services in
Singapore. We do not have long-term agreements with either of these
subcontractors and typically obtain services from them on a purchase order
basis. Our reliance on these subcontractors involves risks such as reduced
control over delivery schedules, quality assurance and costs. These risks could
result in product shortages or increase our costs of manufacturing, assembling
or testing our products. If these subcontractors are unable or unwilling to
continue to provide assembly and test services and deliver products of
acceptable quality, at acceptable costs and in a timely manner, our business
would be seriously harmed. We would also have to identify and qualify substitute
subcontractors, which could be time consuming and difficult and result in
unforeseen operations problems.
OUR SEMICONDUCTOR PRODUCTS ARE COMPLEX AND ARE DIFFICULT TO MANUFACTURE
COST-EFFECTIVELY.
The manufacture of semiconductors is a complex process. It is often
difficult for semiconductor foundries to achieve acceptable product yields.
Product yields depend on both our product design and the manufacturing process
technology unique to the semiconductor foundry. Since low yields may result from
either design or process difficulties, identifying yield problems can only occur
well into the production cycle, when actual product exists which can be analyzed
and tested.
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<PAGE>
We only test our products after they are assembled, as their high-speed
nature makes earlier testing difficult and expensive. As a result, defects are
not discovered until after assembly. This could result in a substantial number
of defective products being assembled and tested, lowering our yields and
increasing our costs. This would seriously harm our business.
DEFECTS IN OUR PRODUCTS COULD INCREASE OUR COSTS AND DELAY OUR PRODUCT
SHIPMENTS.
Although we test our products, they are complex and may contain defects and
errors. In the past we have encountered defects and errors in our products.
Delivery of products with defects or reliability, quality or compatibility
problems may damage our reputation and our ability to retain existing customers
and attract new customers. In addition, product defects and errors could result
in additional development costs, diversion of technical resources, delayed
product shipments, increased product returns, and product liability claims
against us which may not be fully covered by insurance. Any of these could
seriously harm our business.
WE MUST ATTRACT AND RETAIN QUALIFIED PERSONNEL TO BE SUCCESSFUL, AND COMPETITION
FOR QUALIFIED PERSONNEL IS INTENSE IN OUR MARKET.
Our success depends to a significant extent upon the continued contributions
of our key management, technical and sales personnel, many of whom would be
difficult to replace. The loss of one or more of these employees could seriously
harm our business. We do not have key person life insurance on any of our key
personnel. Although we have a severance agreement with our Chief Executive
Officer, we have employment agreements with our Executive Vice President of
Marketing and Business Development, our Vice President of Finance and
Administration and our Vice President of Worldwide Sales and customarily enter
into employment offer letters with our new hires, none of such agreements
obligates the employee to continue working for us. Our success also depends on
our ability to identify, attract and retain qualified technical, sales,
marketing, finance and managerial personnel. Competition for qualified personnel
is particularly intense in our industry and our location in Silicon Valley,
California due to a number of factors, including the high concentration of
established and emerging growth technology companies. This competition makes it
difficult to retain our key personnel and to recruit new highly-qualified
personnel. We have experienced, and may continue to experience, difficulty in
hiring and retaining candidates with appropriate qualifications. If we do not
succeed in hiring and retaining candidates with appropriate qualifications, our
business could be seriously harmed.
OUR DEPENDENCE ON ACADEMIC RESEARCHERS LOCATED IN KOREA COULD ADVERSELY AFFECT
OUR ABILITY TO DEVELOP AND PROTECT KEY TECHNOLOGY.
Some of our key technology is developed by academic researchers at Seoul
National University in Korea whom we have retained as consultants. These
researchers operate under the direction of Dr. Jeong, a founder of Silicon Image
and our Chief Technical Adviser. Since neither Dr. Jeong nor these researchers
are our employees, we have limited control over their activities and can expect
only limited amounts of their time to be dedicated to developing our technology.
These researchers are also not actively involved in managing our business or in
developing our products. They may also have relationships with other commercial
entities, some of which could compete with us. Dr. Jeong and these researchers
sign agreements which require them to keep our proprietary information and the
results of their research confidential. However, we may not be able to keep this
information confidential and its dissemination could seriously harm our
business. Also, we generally obtain an assignment of intellectual property
rights in technology that may result from these researchers' projects. However,
the laws of Korea may not protect our intellectual property rights to the same
extent as the laws of the United States. As a result, our dependence on these
researchers could adversely affect our ability to develop and protect key
technology.
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<PAGE>
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.
A substantial portion of our business is conducted outside of the United
States and as a result, we are subject to foreign business, political and
economic risks. All of our products are manufactured outside of the United
States. Many of our customers are the manufacturers or suppliers for OEMs who
have designed in our products. Many of these manufacturers and suppliers are
located outside of the United States, primarily concentrated in Japan, Korea and
Taiwan. Sales outside of the United States accounted for 92% of our revenues for
1999 and 95% of our revenues for 1998. We anticipate that sales outside of the
United States will continue to account for a substantial portion of our revenue
in future periods. Accordingly, we are subject to international risks,
including:
- difficulties in managing distributors;
- difficulties in staffing and managing foreign operations;
- political and economic instability;
- adequacy of local infrastructure; and
- difficulties in accounts receivable collections.
In addition, OEMs who design our semiconductors into their products sell
them outside of the United States. This exposes us indirectly to foreign risks.
Because sales of our products have been denominated to date exclusively in
United States dollars, increases in the value of the United States dollar will
increase the price of our products so that they become relatively more expensive
to customers in the local currency of a particular country, leading to a
reduction in sales and profitability in that country. A portion of our
international revenues may be denominated in foreign currencies in the future,
which will subject us to risks associated with fluctuations in those foreign
currencies.
WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY. WE RELY ON A
COMBINATION OF PATENT, COPYRIGHT, TRADEMARK AND TRADE SECRET LAWS, AS WELL AS
NONDISCLOSURE AGREEMENTS AND OTHER METHODS TO PROTECT OUR PROPRIETARY
TECHNOLOGIES.
We have been issued patents and have a number of pending United States
patent applications. However, we cannot assure you that any patent will issue as
a result of any applications or, if issued, that any claims allowed will be
sufficiently broad to protect our technology. In addition, it is possible that
existing or future patents may be challenged, invalidated or circumvented. It
may be possible for a third party to copy or otherwise obtain and use our
products, or technology without authorization, develop similar technology
independently or design around our patents. Effective copyright, trademark and
trade secret protection may be unavailable or limited in foreign countries.
Disputes may occur regarding the scope of the license of our intellectual
property we have granted to the DDWG participants for use in implementing the
DVI specification in their products. These disputes may result in:
- costly and time consuming litigation; or
- the license of additional elements of our intellectual property for free.
OTHERS MAY BRING INFRINGEMENT CLAIMS AGAINST US WHICH COULD BE TIME-CONSUMING
AND EXPENSIVE TO DEFEND.
In recent years, there has been significant litigation in the United States
involving patents and other intellectual property rights. This litigation is
widespread in the high-technology industry and is particularly prevalent in the
semiconductor industry, where a number of companies aggressively use their
patent portfolios by bringing numerous infringement claims. In addition, in
recent years, there has
13
<PAGE>
been an increase in the filing of so-called "nuisance suits" alleging
infringement of intellectual property rights, which pressure defendants into
entering settlement arrangements to quickly dispose of such suits, regardless of
their merits. We may become a party to litigation in the future to protect our
intellectual property or as a result of an alleged infringement of others'
intellectual property. These lawsuits could subject us to significant liability
for damages and invalidate our proprietary rights. These lawsuits, regardless of
their success, would likely be time-consuming and expensive to resolve and would
divert management time and attention. Any potential intellectual property
litigation also could force us to do one or more of the following:
- stop selling products or using technology that contain 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 those products that contain the allegedly infringing
intellectual property.
If we are forced to take any of these actions, we may be unable to
manufacture and sell our products, which could seriously harm our business.
THE CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY MAY LEAD TO SIGNIFICANT
VARIANCES IN THE DEMAND FOR OUR PRODUCTS.
In the past, the semiconductor industry has been characterized by
significant downturns and wide fluctuations in supply and demand. Also, the
industry has experienced significant fluctuations in anticipation of changes in
general economic conditions, including economic conditions in Asia. This
cyclicality has led to significant variances in product demand and production
capacity. It has also accelerated erosion of average selling prices per unit. We
may experience periodic fluctuations in our future financial results because of
changes in industry-wide conditions.
WE ARE GROWING RAPIDLY, WHICH STRAINS OUR MANAGEMENT AND RESOURCES.
We are experiencing a period of significant growth that will continue to
place a great strain on our management and other resources. We have grown from
50 employees on January 1, 1999 to 85 employees on January 1, 2000. To manage
our growth effectively, we must:
- implement and improve operational and financial systems;
- train and manage our employee base;
- attract and retain qualified personnel with relevant experience; and
- build out and make our newly leased facilities operational.
We must also manage multiple relationships with customers, business
partners, the DDWG and other third parties, such as our foundry and test
partners. Moreover, we will spend substantial amounts of time and money in
connection with our rapid growth and may have unexpected costs. Our systems,
procedures or controls may not be adequate to support our operations and we may
not be able to expand quickly enough to exploit potential market opportunities.
Our future operating results will also depend on expanding sales and marketing,
research and development and administrative support. If we cannot attract
qualified people or manage growth effectively, our business would be seriously
harmed.
OUR THIRD-PARTY WAFER FOUNDRIES, THIRD-PARTY ASSEMBLY AND TEST SUBCONTRACTOR AND
SIGNIFICANT CUSTOMERS ARE LOCATED IN AN AREA SUSCEPTIBLE TO EARTHQUAKES.
Taiwan Semiconductor Manufacturing Company, the outside foundry that
produces nearly all of our semiconductor products, and Advanced Semiconductor
Engineering, or ASE, one of the
14
<PAGE>
subcontractors that assembles and tests our semiconductor products are located
in Taiwan, which recently experienced a major earthquake and is susceptible to
future earthquakes. In addition, some of our significant customers are located
in Taiwan. Damage caused by the recent earthquake or future earthquakes could
result in shortages in water or electricity, which could in turn limit the
production capacity of our outside foundries and ASE's ability to provide
assembly and test services. Any reduction in the production capacity of our
outside foundries or the ability of ASE to provide assembly and test services
could cause delays or shortages in our product supply, which would seriously
harm our business.
Customers located in Taiwan were responsible for 35% of our product revenue
for the year ended December 31, 1999 and 57% of our product revenue for the year
ended December 31, 1998. If the facilities or equipment of these customers have
been damaged as a result of the recent earthquake or are damaged by future
earthquakes, they could reduce their purchases of our products, which would
seriously harm our business. In addition, the operations of suppliers to our
outside foundries, ASE and our Taiwanese customers could have been disrupted by
the recent earthquake and could be disrupted by future earthquakes. These
disruptions could disrupt the operations of our outside foundries, ASE and our
Taiwanese customers, which could in turn seriously harm our business by
resulting in shortages in our product supply or reduced purchases of our
products.
PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD PREVENT OR DELAY A
CHANGE IN CONTROL OF SILICON IMAGE AND MAY REDUCE THE MARKET PRICE OF OUR COMMON
STOCK.
Provisions of our certificate of incorporation and bylaws may discourage,
delay or prevent a merger or acquisition that a stockholder may consider
favorable. These provisions include:
- authorizing the issuance of preferred stock without stockholder approval;
- providing for a classified board of directors with staggered, three-year
terms;
- prohibiting cumulative voting in the election of directors;
- requiring super-majority voting to amend some provisions in our
certificate of incorporation and bylaws;
- limiting the persons who may call special meetings of stockholders; and
- prohibiting stockholder actions by written consent.
Provisions of Delaware law also may discourage, delay or prevent someone
from acquiring or merging with us.
STOCKHOLDERS EXISTING PRIOR TO OUR INITIAL PUBLIC OFFERING OWN A LARGE
PERCENTAGE OF OUR VOTING STOCK, WHICH MAY ALLOW THEM TO CONTROL THE ELECTION OF
DIRECTORS AND APPROVAL OR DISAPPROVAL OF SIGNIFICANT CORPORATE ACTIONS.
The executive officers, directors and other principal stockholders
beneficially own or control, directly or indirectly approximately 45% of the
outstanding shares of common stock. As a result, if these persons act together,
they will significantly influence, and will likely control, the election of our
directors and approval or disapproval of our significant corporate actions. This
influence over our affairs might be adverse to the interests of other
stockholders. In addition, the voting power of these stockholders could have the
effect of delaying or preventing a change in control of Silicon Image.
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<PAGE>
WE EXPECT THAT THE PRICE OF OUR STOCK MAY FLUCTUATE SUBSTANTIALLY.
Recently, the stock prices of technology companies similar to Silicon Image
have been quite volatile. The market price of our common stock may fluctuate
significantly in response to a number of factors, including:
- actual or anticipated fluctuations in our operating results;
- changes in expectations as to our future financial performance;
- changes in financial estimates of securities analysts;
- changes in market valuations of other technology companies;
- announcements by us or our competitors of significant technical
innovations, design wins, contracts, standards or acquisitions;
- the operating and stock price performance of other comparable companies;
and
- the number of our shares that are available for trading by the public and
the trading volume of our shares.
Due to these factors, the price of our stock may decline and the value of
your investment would be reduced. In addition, the stock market experiences
extreme volatility that often is unrelated to the performance of particular
companies. These market fluctuations may cause our stock price to decline
regardless of our performance.
OUR BUSINESS MAY BE HARMED BY CLASS ACTION LITIGATION DUE TO STOCK PRICE
VOLATILITY.
In the past, securities class action litigation often has been brought
against a company following periods of volatility in the market price of its
securities. Companies in the semiconductor industry and other technology
industries are particularly vulnerable to this kind of litigation due to the
high volatility of their stock prices. Accordingly, we may in the future be the
target of securities litigation. Securities litigation could result in
substantial costs and could divert our management's attention and resources.
FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE.
Of the 25,742,873 shares of our common stock outstanding on December 31,
1999, the 4,485,000 shares sold in our initial public offering on October 6,
1999 are freely tradable. Almost all of the remaining shares of common stock are
subject to lock-up agreements prohibiting their disposition until April 3, 2000,
except that approximately 10% of these shares will be released from the lock-up
agreements on or about February 1, 2000. Sales of a substantial number of these
shares in the public market after the lock-up period ends could cause the market
price of our common stock to decline. In addition, the sale of these shares
could impair our ability to raise capital through the sale of additional stock.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by the
selling stockholders under this prospectus.
DILUTION
As of December 31, 1999, our net tangible book value was approximately
$57.6 million, or $2.24 per share of common stock. Net tangible book value per
share represents the amount of our total tangible assets less total liabilities,
divided by 25,742,873 shares of common stock outstanding. Dilution in net
tangible book value per share represents the difference between the amount per
share paid by purchasers of shares of our common stock in this offering and the
net tangible book value per share of our common stock immediately following this
offering.
We will not receive any proceeds from the sale of the common stock by the
selling stockholders under this prospectus and the shares offered under this
prospectus are already outstanding. Accordingly, the amount of our total
tangible assets, total liabilities and shares of common stock outstanding will
not change as a result of the sale of any of the shares offered under this
prospectus. Therefore, our net tangible book value and net tangible book value
per share immediately following this offering will remain unchanged from the
numbers set forth above, assuming that no additional shares of common stock are
issued after the date of this prospectus.
Assuming that the shares offered under this prospectus are sold at a price
of $80.63, the closing price of our common stock on January 27, 2000, new
purchasers of the shares will experience an immediate dilution of $78.39 per
share. The following table illustrates the per share dilution:
<TABLE>
<S> <C>
Assumed offering price per share............................ $80.63
Net tangible book value per share after this offering....... 2.24
------
Dilution per share to new purchasers........................ $78.39
======
</TABLE>
The above discussion and tables assume no exercise of any stock options or
warrants for common stock outstanding as of December 31, 1999. As of
December 31, 1999, there were options outstanding to purchase a total of
2,762,738 shares of common stock at a weighted average exercise price of $11.24
per share and warrants outstanding to purchase a total of 317,856 shares of
common stock with a weighted average exercise price of $2.08 per share. In
addition, upon satisfaction of a milestone, we are obligated to issue a warrant
for an additional 142,857 shares exercisable at $0.35 per share. If any of these
options or warrants are exercised, there will be further dilution to new
purchasers.
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SELLING STOCKHOLDERS
The following table sets forth certain information regarding the shares
beneficially owned by the selling stockholders named below as of January 27,
2000, the shares that may be offered and sold from time to time by the selling
stockholders pursuant to this prospectus, assuming each selling stockholder
sells all of the shares offered in this prospectus, and the nature of any
position, office or other material relationship which each selling stockholder
has had with Silicon Image or any of its predecessors or affiliates within the
past three years. The selling stockholders named below, together with any
pledgee or donee of any named stockholders, and any person who may purchase
shares offered hereby from any named stockholders in a private transaction in
which they are assigned the stockholders' rights to registration of their
shares, are referred to in this prospectus as the "selling stockholders."
The shares that may be offered and sold pursuant to this prospectus were
acquired by the selling stockholders pursuant to non-plan restricted stock
purchase agreements. Because the selling stockholders may offer from time to
time all or some of their shares under this prospectus, no assurances can be
given as to the actual number of shares that will be sold by any selling
stockholder or that will be held by the selling stockholder after completion of
the sales. Information concerning the selling stockholders may change from time
to time and any changed information will be set forth in supplements to this
prospectus if and when necessary.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission that consider shares to be beneficially owned
by any person who has voting or investment power with respect to the shares.
Common stock subject to options that are currently exercisable or exercisable
within 60 days after January 27, 2000 are considered to be outstanding and to be
beneficially owned by the person holding the options for the purpose of
computing the percentage ownership of a person but are not treated as
outstanding for the purpose of computing the percentage ownership of any other
person. We may update, amend or supplement this prospectus from time to time to
update the disclosure in this section.
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING
SHARES OWNED SHARES OWNED SHARES OWNED
NAME BEFORE OFFERING SHARES OFFERED AFTER OFFERING AFTER OFFERING
- ---- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
David D. Lee(1)............................ 2,108,500 150,000 1,958,500 7.6%
Deog-Kyoon Jeong(2)........................ 1,130,000 150,000 980,000 3.8%
Scott A. Macomber(3)....................... 900,000 250,000 650,000 2.5%
Steve Tirado(4)............................ 472,407 470,175 2,232 *
Jalil Shaikh(5)............................ 244,000 30,000 214,000 *
Daniel K. Atler(6)......................... 231,000 60,000 171,000 *
Parviz Khodi(7)............................ 203,232 82,000 121,232 *
Stanley Meresman(8)........................ 80,000 20,000 60,000 *
Choo-Beng Lee(9)........................... 10,000 10,000 -- *
--------- --------- ---------
TOTALS................................... 5,379,139 1,222,175 4,156,964
========= ========= =========
</TABLE>
- ------------------------
* Less than 1%
(1) David D. Lee has served as Chairman of the Board and Chief Executive Officer
since our inception on January 1, 1995, and in addition served as President
from inception until October 1996 and since June 1999.
(2) Deog-Kyoon Jeong was a founder of Silicon Image and has served as Chief
Technical Adviser in a consulting capacity since October 1995.
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(3) Scott A. Macomber served as Silicon Image's Vice President of Business
Strategy from June 1999 until October 1999. Mr. Macomber joined Silicon
Image in December 1995, as Vice President, Business Development and a member
of the board of directors. Mr. Macomber served as President of Silicon Image
from October 1996 to June 1999 and as a director from December 1995 until
June 1999.
(4) Steve Tirado has served as Silicon Image's Executive Vice President of
Marketing and Business Development since August 1999.
(5) Jalil Shaikh has served as Silicon Image's Vice President of Operations
since September 1996.
(6) Daniel K. Atler has served as Silicon Image's Chief Financial Officer and
Vice President of Finance and Administration since June 1998, and has also
served as Treasurer and Secretary since June 1999.
(7) Parviz Khodi has served as Silicon Image's Vice President of Worldwide Sales
since August 1998. Mr. Khodi joined Silicon Image in July 1998 as Director
of Asia Pacific Sales.
(8) Stanley Meresman has been a consultant to Silicon Image since December 1998.
(9) Choo-Beng Lee has been a consultant to Silicon Image since September 1999.
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PLAN OF DISTRIBUTION
The selling stockholders and their successors, including their transferees,
pledgees or donees or their successors, may sell the common stock offered under
this prospectus directly to purchasers or through underwriters, broker-dealers
or agents, who may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders or the purchasers. These discounts,
concessions or commissions as to any particular underwriter, broker-dealer or
agent may be in excess of those customary in the types of transactions involved.
Neither Silicon Image nor the selling stockholders can presently estimate the
amount of this compensation.
The common stock offered under this prospectus may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at prices related to the prevailing market prices, at varying prices determined
at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions:
- on any national securities exchange or U.S. inter-dealer system of a
registered national securities association on which the common stock may
be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
- through the writing of options, whether the options are listed on an
options exchange or otherwise; or
- through the settlement of short sales.
In connection with the sale of the common stock, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the common stock in the
course of hedging the positions they assume. The selling stockholders may also
sell the common stock short and deliver these securities to close out their
short positions, or loan or pledge the common stock to broker-dealers that in
turn may sell these securities.
The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts and commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. Silicon Image will not receive any of the proceeds from this
offering.
Silicon Image' outstanding common stock is listed for trading on the Nasdaq
National Market.
The selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock may be "underwriters" within the
meaning of Section 2(11) of the Securities Act. Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be underwriting
discounts and commissions under the Securities Act. Selling stockholders who are
"underwriters" within the meaning of Section 2(11) of the Securities Act will be
subject to the prospectus delivery requirements of the Securities Act.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus. A selling stockholder may not sell any
common stock described in this prospectus and may not transfer, devise or gift
these securities by other means not described in this prospectus.
To the extent required, the specific common stock to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to
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the registration statement of which this prospectus is a part. This prospectus
also may be used, with Silicon Image' consent, by donees or pledgees of the
selling stockholders, or by other persons acquiring shares and who wish to offer
and sell shares under circumstances requiring or making desirable its use.
In order to comply with the securities laws of some states, if applicable,
the common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may
not be sold unless they have been registered or qualified for sale or an
exemption from registration or qualification requirements is available and is
complied with.
The selling stockholders may indemnify brokers, dealers, agents or
underwriters that participate in transactions involving sales of the shares
against specific liabilities, including liabilities arising under the Securities
Act and/or Exchange Act. Silicon Image will pay substantially all of the
expenses incident to this offering of the shares by the selling stockholders to
the public other than commissions and discounts of underwriters, brokers,
dealers or agents.
We may suspend the use of this prospectus if we learn of any event that
causes this prospectus to include an untrue statement of a material fact or to
omit to state a material fact required to be stated in the prospectus or
necessary to make the statements in the prospectus not misleading in the light
of the circumstances then existing. If this type of event occurs, a prospectus
supplement or post-effective amendment, if required, will be distributed to each
selling stockholder.
LEGAL MATTERS
Fenwick & West LLP, Palo Alto, California, will provide Silicon Image with
an opinion as to legal matters in connection with the common stock.
EXPERTS
The financial statements incorporated by reference in this prospectus by
reference to the prospectus filed on October 5, 1999 pursuant to
Rule 424(b) under the Securities Act, relating to the registration statement on
Form S-1 (File No. 333-83665), have been so included in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
The following documents that we have filed with the Securities and Exchange
Commission (the "Commission") are incorporated into this prospectus by
reference:
- the Registration Statement on Form S-8 of which this prospectus is a part,
and the exhibits filed with this registration statement and incorporated
into this registration statement by reference;
- our prospectus filed on October 5, 1999 pursuant to Rule 424(b) under the
Securities Act, relating to the registration statement on Form S-1 (File
No. 333-83665), which contains our audited financial statements as of
December 31, 1997 and 1998 and as of June 30, 1999, for each of the years
in the three-year period ended December 31, 1998, and for the six months
ended June 30, 1999;
- our Quarterly Report on Form 10-Q for the quarter ended September 30, 1999
filed with the Commission on November 19, 1999;
- the description of our common stock contained in our Registration
Statement on Form 8-A filed on July 30, 1999 under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including any amendment or report filed for the purpose of updating such
description; and
21
<PAGE>
- all documents subsequently filed by us pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this prospectus and
before the termination of this offering.
To the extent that any statement in this prospectus is inconsistent with any
statement that is incorporated by reference, the statement in this prospectus
shall control. The incorporated statement shall not be deemed, except as
modified or superseded, to constitute a part of this prospectus or the
registration statement.
Because we are subject to the informational requirements of the Exchange
Act, we file reports and other information with the Commission. Reports,
registration statements, proxy and information statements and other information
that we have filed can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain copies of this material from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at rates prescribed by the Commission. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission also maintains a World Wide Web site that
contains reports, proxy and information statements and other information that is
filed electronically with the Commission. This web site can be accessed at
http://www.sec.gov.
We have filed with the Commission a registration statement on Form S-8 under
the Securities Act with respect to the common stock offered under this
prospectus. This prospectus does not contain all of the information in the
registration statement, parts of which we have omitted, as allowed under the
rules and regulations of the Commission. You should refer to the registration
statement for further information with respect to us and our common stock.
Statements contained in this prospectus as to the contents of any contract or
other document are not necessarily complete and, in each instance, we refer you
to the copy of each contract or document filed as an exhibit to the registration
statement. Copies of the registration statement, including exhibits, may be
inspected without charge at the Commission's principal office in Washington,
D.C., and you may obtain copies from this office upon payment of the fees
prescribed by the Commission.
We will furnish without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of the information
that has been incorporated by reference into this prospectus (except exhibits,
unless they are specifically incorporated by reference into this prospectus).
You should direct any requests for copies to Silicon Image, Inc., 1060 E. Arques
Avenue, Sunnyvale, CA 94086, Attention: Daniel K. Atler, Vice President, Finance
and Administration, telephone: (408) 616-4000.
22
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SILICON IMAGE, INC.
-------------
PROSPECTUS
-------------
JANUARY 27, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
For the purposes of this registration statement, the terms "we," "our" and
"us" refer to Silicon Image, Inc., a Delaware corporation.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) The Registrant's prospectus filed on October 6, 1999 pursuant to
Rule 424(b) under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the registration statement on Form S-1 (File
No. 333-83665), which contains audited financial statements of the
Registrant as of December 31, 1997 and 1998 and as of June 30, 1999, for
each of the years in the three-year period ended December 31, 1998, and
for the six months ended June 30, 1999.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999 filed with the Commission on November 19, 1999.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed on July 30, 1999
under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated into this registration statement by reference and to be a
part hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS AND LIMITATION OF LIABILITY.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers under certain circumstances and subject to certain limitations. The
terms of Section 145 of the Delaware General Corporation Law are sufficiently
broad to permit indemnification under certain circumstances for liabilities,
including reimbursement of expenses incurred, arising under the Securities Act
of 1933.
As permitted by the Delaware General Corporation Law, the Registrant's
certificate of incorporation includes a provision that eliminates the personal
liability of its directors for monetary damages for breach of fiduciary duty as
a director, except for liability:
- for any breach of the director's duty of loyalty to the Registrant or its
stockholders;
- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
II-1
<PAGE>
- under section 174 of the Delaware General Corporation Law regarding
unlawful dividends and stock purchases; or
- for any transaction from which the director derived an improper personal
benefit.
As permitted by the Delaware General Corporation Law, the Registrant's
bylaws provide that:
- the Registrant is required to indemnify its directors and officers to the
fullest extent permitted by the Delaware General Corporation Law, subject
to certain very limited exceptions;
- the Registrant is required to advance expenses, as incurred, to its
directors and officers in connection with a legal proceeding to the
fullest extent permitted by the Delaware General Corporation Law, subject
to certain very limited exceptions; and
- the rights conferred in the Bylaws are not exclusive.
In addition, the Registrant has entered into indemnity agreements with each
of its current directors and officers. These agreements provide for the
indemnification of officers and directors for all expenses and liabilities
incurred in connection with any action or proceeding brought against them by
reason of the fact that they are or were agents of the Registrant.
The Registrant intends to obtain directors' and officers' insurance to cover
its directors, officers and some of its employees for certain liabilities,
including public securities matters.
The Underwriting Agreement relating to the Registrant's initial public
offering, effected pursuant to a registration statement on Form S-1 (File
No. 333-83665) provides for indemnification by the underwriters of the
Registrant and its directors and officers for certain liabilities under the
Securities Act of 1933, or otherwise.
Reference is made to the following documents regarding relevant
indemnification provisions described above and elsewhere herein:
1. Form of Underwriting Agreement (incorporated by reference to
Exhibit 1.01 to the Registrant's registration statement on Form S-1 (File
No. 333-83665), declared effective October 5, 1999 (the "Form S-1")).
2. Second Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.03 to the Form S-1).
3. Restated Bylaws of the Registrant (incorporated by reference to
Exhibit 3.05 to the Form S-1).
4. Form of Indemnity Agreement entered into between the Registrant and its
directors and officers (incorporated by reference to Exhibit 10.01 to the
Form S-1).
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The Registrant issued a total of 1,222,175 shares of its common stock to
nine individuals pursuant to restricted stock purchase agreements of the
Registrant. These shares were issued in private transactions that were exempt
from registration under the Securities Act by virtue of Regulation D/
Section 4(2) of the Securities Act.
ITEM 8. EXHIBITS.
<TABLE>
<C> <S>
4.01 Second Amended and Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit 3.03 to
the Form S-1).
4.02 Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.05 to the Form S-1).
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
4.03 Form of Specimen Certificate for the Registrant's common
stock (incorporated by reference to Exhibit 4.01 to the
Form S-1).
4.04 Third Amended and Restated Investors Rights Agreement dated
July 29, 1998 among the Registrant and certain stockholders
named therein (incorporated by reference to Exhibit 4.04 to
the Form S-1).
4.05 Form of Restricted Stock Purchase Agreement and Secured Full
Recourse Promissory Note entered into between the Registrant
and its officers and consultants (incorporated by reference
to Exhibit 10.20 to the Form S-1).
5.01 Opinion of Fenwick & West LLP
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, independent
accountants.
24.01 Power of Attorney (see page 7).
</TABLE>
ITEM 9. UNDERTAKINGS.
The Registrant undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(c) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to the information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (1)(a) and (1)(b) above do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered in the
registration statement, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of those securities.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered in the registration
statement, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of those securities.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions
II-3
<PAGE>
discussed in Item 6 hereof, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission this
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. If a claim for indemnification
against these liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by the director, officer or controlling person in
connection with the securities being registered under this registration
statement, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of this issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant, Silicon
Image, Inc., certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Sunnyvale, State of California, on this
31st day of January, 2000.
<TABLE>
<S> <C> <C>
SILICON IMAGE, INC.
By: /s/ DAVID D. LEE
-----------------------------------------
David D. Lee
CHIEF EXECUTIVE OFFICER
</TABLE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints David D. Lee, Daniel K. Atler and
Andrew S. Rappaport, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement on Form S-8, and to
file the same with all exhibits thereto and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DAVID D. LEE President, Chief Executive January 31, 2000
------------------------------------------- Officer and Chairman of the
David D. Lee Board (Principal Executive
Officer)
/s/ DANIEL K. ATLER Vice President, Finance and January 31, 2000
------------------------------------------- Administration and Chief
Daniel K. Atler Financial Officer
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ SANG-CHUL HAN Director January 31, 2000
-------------------------------------------
Sang-Chul Han
/s/ RONALD V. SCHMIDT Director January 31, 2000
-------------------------------------------
Ronald V. Schmidt
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DAVID A. HODGES Director January 31, 2000
-------------------------------------------
David A. Hodges
/s/ ANDREW S. RAPPAPORT Director January 31, 2000
-------------------------------------------
Andrew S. Rappaport
/s/ HERBERT CHANG Director January 31, 2000
-------------------------------------------
Herbert Chang
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- --------------------- -------------
<C> <S>
4.01 Second Amended and Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit 3.03 to
the Registrant's registration statement on Form S-1 (File
No. 333-83665), declared effective October 5, 1999 (the
"Form S-1")).
4.02 Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.05 to the Form S-1).
4.03 Form of Specimen Certificate for the Registrant's common
stock (incorporated by reference to Exhibit 4.01 to the
Form S-1).
4.04 Third Amended and Restated Investors Rights Agreement dated
July 29, 1998 among the Registrant and certain stockholders
named therein (incorporated by reference to Exhibit 4.04 to
the Form S-1).
4.05 Form of Restricted Stock Purchase Agreement and Secured Full
Recourse Promissory Note entered into between the Registrant
and its officers and consultants (incorporated by reference
to Exhibit 10.20 to the Form S-1).
5.01 Opinion of Fenwick & West LLP
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, independent
accountants.
24.01 Power of Attorney (see page 7).
</TABLE>
<PAGE>
EXHIBIT 5.01
[LETTERHEAD OF FENWICK & WEST LLP]
January 28, 2000
Silicon Image, Inc.
1060 E. Arques Avenue
Sunnyvale, CA 94086
Gentlemen/Ladies:
At your request, we have examined the registration statement on Form S-8
(the "REGISTRATION STATEMENT") to be filed by you with the Securities and
Exchange Commission (the "SEC") on or about January 31, 2000, under the
Securities Act of 1933, as amended, in order to register an aggregate of
1,222,175 shares of your Common Stock (the "STOCK") purchased pursuant to
non-plan restricted stock purchase agreements for resale under the Registration
Statement by the stockholders named in the Form S-3 prospectus associated with
the Registration Statement and in subsequent amendments thereto (the "SELLING
STOCKHOLDERS").
In rendering this opinion, we have examined the following:
(1) your registration statement on Form S-1 (File No. 333-83665), declared
effective by the SEC on October 5, 1999, together with the exhibits filed
therewith;
(2) your quarterly report on Form 10-Q for the quarter ended September 30,
1999;
(3) your registration statement on Form 8-A (File No. 000-26887), filed with
the SEC on July 30, 1999 and effective on October 5, 1999;
(4) the Registration Statement, together with the exhibits filed as a part
thereof and the prospectuses prepared in connection therewith;
(5) the minutes of meetings and actions by written consent of the
stockholders and Board of Directors that are contained in your minute
books and in the minute books of Silicon Image, Inc., a California
corporation (the "PREDECESSOR") that are in our possession and the stock
records for both you and the Predecessor;
(6) your Certificate of Incorporation, as amended (the "CERTIFICATE OF
INCORPORATION"), and bylaws, as amended (the "BYLAWS"), and the Articles
of Incorporation and Bylaws of the Predecessor;
(7) a Management Certificate executed by you, addressed to us and dated of
even date herewith, which contains certain factual and other
representations; and
(8) a certificate from your transfer agent as to the number of outstanding
shares of your common stock as of January 27, 2000.
We have also confirmed both the continued effectiveness of the Company's
registration under the Securities Exchange Act of 1934, as amended, by telephone
call to the SEC and have confirmed your eligibility to use Form S-8.
<PAGE>
Silicon Image, Inc.
January 28, 2000
Page 2
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted
to us as originals, the conformity to originals and completeness of all
documents submitted to us as copies, the legal capacity of all natural persons
executing the same, the lack of any undisclosed termination, modification,
waiver or amendment to any document reviewed by us and the due authorization,
execution and delivery of all documents where due authorization, execution and
delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely upon
our examination of the documents referred to above and have assumed the current
accuracy and completeness of the information obtained from public officials and
records referred to above. We have made no independent investigation or other
attempt to verify the accuracy of any of such information or to determine the
existence or non-existence of any other factual matters; HOWEVER, we are not
aware of any facts that would cause us to believe that the opinion expressed
herein is not accurate.
We are admitted to practice law in the State of California, and we express
no opinion herein with respect to the application or effect of the laws of any
jurisdiction other than the existing laws of the United States of America and
the State of California and the existing Delaware General Corporation Law.
In connection with our opinion expressed below, we have assumed that, at or
prior to the time of the delivery of any shares of Stock, the Registration
Statement will have been declared effective under the Securities Act of 1933, as
amended, that the registration will apply to such shares of Stock and will not
have been modified or rescinded and that there will not have occurred any change
in law affecting the validity or enforceability of such shares of Stock.
Based upon the foregoing, it is our opinion that the 1,222,175 shares of
Stock that may be sold by the Selling Stockholders pursuant to the Registration
Statement, when evidenced by appropriate certificates that have been properly
executed and delivered and when issued and sold in accordance with the
Registration Statement and in the manner referred to in the Form S-3 prospectus
associated with the Registration Statement, are validly issued, fully paid and
non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof.
<TABLE>
<S> <C> <C>
Very truly yours,
FENWICK & WEST LLP
By: /s/ DENNIS DEBROECK
-----------------------------------------
Dennis DeBroeck, Esq.,
A Partner
</TABLE>
<PAGE>
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 14, 1999, except as to Note 11,
which is as of September 9, 1999, relating to the financial statements of
Silicon Image, Inc., which appears in Silicon Image, Inc.'s Registration
Statement on Form S-1 (File No. 333-83665).
/s/ PricewaterhouseCoopers LLP
San Jose, California
January 27, 2000
