Memorychip maker Winbond Electronics Corp on Thursday reported that revenue and earnings fell last quarter amid inventory digestion and near-term weakness in demand, like many of its peers in the industry.

Net profit fell to NT$879 million (US$28.59 million) in the final quarter of last year, down from NT$2.84 billion in the previous quarter, while consolidated sales fell 13.23 percent quarterly to NT$11.87 billion, the company said in a statement.

Despite efforts to adjust production in response to slowing demand, gross margin fell from 38 percent to 34 percent over the period, Winbond said.

Earnings per share (EPS) were NT$0.22 in the quarter, it said.

Specialty DRAM and mobile memory products are Winbond’s biggest revenue source, making up 52 percent of its overall sales last quarter.

While DRAM revenue fell 17 percent quarter-on-quarter, its 25-nanometer 2G DDR3 had started small-volume ramp-up last quarter and is expected to gradually increase its contribution to revenue, Winbond said.

Revenue from flash memory chips dropped 12 percent quarterly, accounting for 48 percent of its total revenue last quarter, it said.

Winbond aims to increase product competitiveness in its flash memory business by developing a 512 megabit medium-high-density product, 1.2-volt serial NOR flash and SLC NAND flash products with serial peripheral interfaces, it said.

By applications, memory chips used in consumer, communications, PC and car and industrial devices accounted for 30 percent, 26 percent, 26 percent and 18 percent respectively of the company’s total revenue last quarter, it said.

Overall, last year’s net profit expanded 34.16 percent year-on-year to NT$7.45 billion, with EPS hitting the highest in 18 years at NT$1.87.

Total revenue rose 7.56 percent annually to NT$51.19 billion, while gross margin improved by 3.11 percentage points to 37.41 percent, the company said.

Winbond’s board of directors on Thursday approved capital expenditure of NT$732 million for equipment purchases and office space.

It plans to spend NT$651 million this year and NT$81 million next year, according to a filing with the Taiwan Stock Exchange.

The expenditure announcement came after Winbond on Oct. 3 last year broke ground at the Kaohsiung Science Park in Lujhu District , within the Southern Taiwan Science Park , where it is building a 12-inch fab designed with a monthly capacity of 28,500 wafers.

To finance the construction, and the purchase of machinery and equipment, Winbond last month secured a seven-year syndicated loan of NT$42 billion from 19 local banks.

By: DocMemory
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