Sat, Feb 07, 2009 - Page 11 News List

Winbond Electronics posts loss of NT$7.37bn for 2008

HOLDING ON: Though it will close a Hsinchu wafer fab for testing in July, a public relations official said the firm has no plans to shift from manufacturing to IC design

By Kevin Chen  /  STAFF REPORTER

Computer memory chipmaker Winbond Electronics Corp (華邦電子) yesterday posted a net loss of NT$7.37 billion (US$218.3 million) for last year but denied the company would walk away from the manufacturing business in favor of chip designing.

“Winbond plans to close an 8-inch wafer fab in Hsinchu for testing in July, but will not shut down our 12-inch fab in Taichung,” Mike Liu (劉重光), a public relations deputy director at Winbond, said by telephone yesterday.

“Winbond does not have plans to shift its focus from manufacturing to IC design at the moment, either,” he said.

The company’s decision to shut down the less advanced 8-inch fab follows a deal announced in 2007 that it would sell the plant to Vanguard International Semiconductor Corp (世界先進).

Hsinchu-based Vanguard, which makes chips used in liquid-crystal-display panels, is a unit of Taiwan Semiconductor Manufacturing Co (台積電).

The 8-inch fab currently has a workforce of between 200 and 300 people, Liu said, adding that Winbond will try to transfer the workers to its 12-inch fab in Taichung, but those who are unable or refuse to relocate will be let go.

Liu’s remark came after a Bloomberg report that cited Winbond vice chairman Chang Ching-chu (章青駒) as saying that the company “may give up its last factory and abandon manufacturing semiconductors.”

Winbond, which said last month it had about NT$950 million in unpaid accounts receivable from bankrupt Qimonda AG, said yesterday that it would book a reserve of NT$560 million for such problematic accounts in the fourth quarter.

Winbond produces dynamic random access memory (DRAM) chips for Qimonda on a contract basis and enjoyed a technological partnership with the German firm.

Winbond said it would continue taking legal action against Qimonda and develop advanced technology from elsewhere to safeguard shareholders’ interests, but admitted its German partner’s recent problems had hurt the firm’s profitability.

During the three months ending Dec. 31, the Hsinchu-based company saw its net losses reach NT$3.44 billion or a loss of NT$0.93 per share, up 286 percent from the previous quarter. It attributed the losses to the global economic downturn that has reduced the demand for PCs and consumer electronics and the difficult pricing environment.

“Triggered by weakening demands of end markets, our major customers are taking steps to cut their inventory levels which resulted in a further cutback of product demands,” the company said in a statement yesterday.

Sales totaled NT$3.78 billion in the fourth quarter, a decline of about 25 percent from NT$5.07 billion in the previous quarter, the company said.

For the whole year, net loss totaled NT$7.37 billion or a loss of NT$2 per share, up 26.7 percent from a year ago. on an accumulated revenue of NT$21.83 billion, it said.

Winbond said the 65 nanometer technology from Qimonda would begin mass production in the first quarter and would help the company move toward the niche DRAM market to meet customer-driven demand.

The company also hopes to speed up the transfer of outsourced branded non-commodity DRAM and NOR Flash to a 300mm wafer fab in a bid to generate cash inflow and expand its market share, it said in the statement.

ADDITIONAL REPORTING BY JERRY LIN

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