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Winbond posts smallest quarterly loss in nine months

Local memory chipmaker Winbond Electronics Corp (華邦電子) yesterday reported its smallest quarterly loss in nine months, riding on a broader recovery in consumer spending on computers and consumer electronics, including flat-panel TVs.

As the growth momentum is expected to carry into the final quarter and early next year, Winbond said it would raise capital spending this year by about 68 percent to NT$5.2 billion (US$160 million) — from its previous estimate of NT$3.1 billion — mainly to support capacity expansion for non-PC chips.

Demand for memory chips used in consumer electronics, networking and mobile phones would be the major driving forces, Chan said.

“We are seeing strong demand and increasing orders ... We have to expand capacity to cope with rapid growth next year,” company president Chan Tung-yi (詹東義) told an investor conference.

During the quarter ending Sept. 30, Winbond narrowed its quarterly loss to NT$983 million, from losses of NT$2.75 billion in the second quarter and NT$891 million a year earlier, a company statement said.

Gross margin improved to minus 2 percent in the third quarter amid rising average selling prices and better cost control, compared with minus 39 percent in the second quarter.

Winbond expects the uptrend in prices to extend into this quarter.

“The visibility is good. We believe the fourth quarter will be a better period than before, though it’s historically a slack season,” Chan said. “Revenues will grow further and gross margin will be better.”

Chan expects revenues from memory chips used in handsets and consumer electronics devices to grow by double-digit percent this quarter from last quarter after securing new orders.

Winbond is diversifying away from the volatile computer chip business and focusing on supplying memory chips and flash memory chips for mobile phones, LCD TVs, networking and other consumer electronics.

Last quarter, computer memory chips made up a smaller share, or 30 percent of Winbond’s total revenues of NT$5.69 billion, compared with 38 percent during the same period last year.

Winbond plans to further broaden its product line next year by starting to supply graphics dynamic random access memory (DRAM) chips in the first quarter.
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