Silicon Image Grows Revenue 27% in Fiscal Year 2010

SUNNYVALE, Calif., February 3, 2011 – Silicon Image, Inc. (NASDAQ: SIMG), a leader in advanced, interoperable HD connectivity solutions for consumer electronics, today reported financial results for its fourth quarter and fiscal year ended December 31, 2010.

Revenue for the fourth quarter of 2010 was $52.0 million, compared to $60.5 million for the third quarter of 2010 and $35.6 million for the fourth quarter of 2009. Revenue for the third quarter of 2010 included a benefit of $7.5 million royalty revenue catch-up. Excluding the royalty catch-up, revenue for the third quarter of 2010 would have been $53.0 million. Revenue for the 2010 fiscal year increased 27% to $191.3 million from $150.6 million for 2009.

GAAP net income for the fourth quarter of 2010 was $4.2 million, or $0.05 per diluted share, compared to $9.5 million, or $0.12 per diluted share, for the third quarter of 2010 and a net loss of $66.9 million, or $0.89 per share, for the fourth quarter of 2009. GAAP net income for the 2010 fiscal year was $8.2 million, or $0.10 per diluted share, compared to a net loss of $129.1 million, or $1.72 per share for 2009.

Non-GAAP net income for the fourth quarter of 2010 was $5.3 million, or $0.07 per diluted share, compared to $13.7 million, or $0.18 per diluted share, for the third quarter of 2010 and a non-GAAP net loss of $5.0 million, or $0.07 per share, for the fourth quarter of 2009. Non-GAAP net income for the 2010 fiscal year was $17.3 million, or $0.22 per diluted share, compared to a net loss of $16.3 million, or $0.22 per share, for 2009. Non-GAAP net income (loss) for these periods exclude stock-based compensation expense, amortization of intangible assets, restructuring charges, impairment of goodwill and certain intangible assets and certain professional fees. A reconciliation of GAAP and non-GAAP items is provided in a table following the Condensed Consolidated Statements of Operations.

"During 2010 we focused on improving our operational performance to drive revenue and earnings growth," said Camillo Martino, chief executive officer of Silicon Image, Inc. “Our overall progress positions Silicon Image well for the next stage of growth, including the continued expansion into the mobile market. We will continue to deliver unique, high-value innovations to our customers, in addition to driving standards that enhance the connected HD user experience for all consumer electronics.”

The following are Silicon Image’s financial performance estimates for the first quarter of 2011:

• Revenue: $47 million - $49 million
• Gross margin: approximately 56%
• GAAP operating expenses: approximately $28 million
• Non-GAAP operating expenses: approximately $26 million
• Interest income: approximately $0.5 million
• Diluted shares outstanding: approximately 82 million
• Non-GAAP tax rate: approximately 18%

Use of Non-GAAP Financial Information

Silicon Image presents and discusses gross margin, operating expenses, net income (loss) and basic and diluted net income (loss) per share in accordance with Generally Accepted Accounting Principles (GAAP), and on a non-GAAP basis for informational purposes only. Silicon Image believes that non-GAAP reporting, giving effect to the adjustments shown in the attached reconciliation, provides meaningful information and therefore uses non-GAAP reporting to supplement its GAAP reporting and internally in evaluating operations, managing and monitoring performance, and determining bonus compensation. Further, Silicon Image uses non-GAAP information as certain non-cash charges such as amortization of intangibles, stock based compensation and goodwill impairment do not reflect the cash operating results of the business. Silicon Image has chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of its operating results and to illustrate the results of operations giving effect to such non-GAAP adjustments. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Conference Call

Silicon Image will host an investor conference call today to discuss its fourth quarter and fiscal year 2010 results at 2:00 p.m. Pacific Time and will webcast the event. To access the conference call, dial 800-753-4387 or 212-231-2901. The webcast will be accessible on Silicon Image's investor relations website at http://ir.SiliconImage.com. A replay of the conference call will be available within two hours of the conclusion of the conference call through Tuesday, February 8, 2011. To access the replay, please dial 800-633-8625 or 402-977-9141 and enter pass code 21508716.

About Silicon Image, Inc.

Silicon Image is a leading provider of advanced, interoperable connectivity solutions that enable the reliable distribution and presentation of high-definition (HD) content for consumer electronics, mobile, and PC markets. The company delivers its technology via semiconductor and intellectual property (IP) products that are compliant with global industry standards and also feature industry leading Silicon Image innovations such as InstaPort™. Silicon Image’s products are deployed by the world’s leading electronics manufacturers in devices such as desktop and notebook PCs, DTVs, Blu-Ray Disc™ players, audio-video receivers, as well as mobile phones, tablets and digital cameras. Silicon Image has driven the creation of the highly successful HDMI® and DVI™ industry standards, as well as the latest standards for mobile devices - SPMT™ (Serial Port Memory Technology) and MHL™ (Mobile High-Definition Link). Via its wholly-owned subsidiary, Simplay Labs, Silicon Image offers manufacturers comprehensive standards interoperability and compliance testing services. For more information, visit us at http://www.siliconimage.com/.