UPDATE 1-Silicon Motion cuts Q2 revenue view

* Sees Q2 revenue down 5 pct-10 pct

* Raises gross margin outlook

* Shares down as much as 8 pct

July 9 (Reuters) - Taiwan-based chipmaker Silicon Motion Technology Corp (SIMO.O) cut its second-quarter revenue outlook, hurt by a supply squeeze of NAND flash memory, sending its shares down as much as 8 percent.

"We had anticipated an increase in NAND flash supply from chipmakers in the second quarter as a result of their higher fab utilization rates, but availability of supply to our customers remained limited and this in turn limited their procurement of controllers," Chief Executive Wallace Kou said in a statement.

Silicon Motion makes microcontrollers used in managing NAND flash memory storage products such as flash memory cards and USB flash drives. NAND flash chips store data on cellphones and MP3 players such as Apple Inc's (AAPL.O) iPod.

The company, which designs products that support mobile storage and communication, expects a sequential drop of 5 to 10 percent in revenue, compared with its previous outlook of a sequential growth of 5 to 15 percent.

The company had reported revenue of $21.5 million in the prior quarter.

The company, however, expects its gross margin to be significantly higher than planned due to better product mix.

Shares of the company were down 4 percent at $3.19 in morning trade on Nasdaq. (Reporting by Manasi Phadke in Bangalore; Editing by Anil D'Silva)