Sat, Apr 27, 2013 - Page 13 News List

Winbond’s losses shrink as chip prices pick up

BRIGHT OUTLOOK:The company has benefited from the market boom in tablets and smartphones, which has fueled demand for mobile DRAM chips

By Amy Su  /  Staff reporter

Despite a sequential decline in sales last quarter, memorychip maker Winbond Electronics Corp (華邦電子) yesterday said net loss in the first quarter improved from the previous quarter as chip prices recovered.

The company was also upbeat about the second-quarter outlook, citing strong chip demand for smartphones and tablets.

Winbond recorded a net loss of NT$337 million (US$11.3 million), or loss per share of NT$0.10, in the January-to-March period, an improvement from a net loss of NT$556 million, or loss per share of NT$0.15, in the October-to-December period last year, the company’s financial statement showed.

“The increase in product prices last quarter helped reduce losses,” company president Chan Tung-yi (詹東義) told investors in Taipei.

A better product mix also contributed to cutting losses, Chan added.

Still, the last quarter marked Winbond’s seventh consecutive quarterly loss since the Hsinchu-based company reported a net profit of NT$269.36 million in the second quarter of 2011.

Consolidated revenue totaled NT$7.68 billion in the first quarter, down 2 percent from the fourth quarter last year, which the company attributed to a slowing trend in the PC sector, as well as model changes and inventory adjustment among its key customers.

Gross margin in the first three months stood at 16 percent, up from the 15 percent recorded three months ago, an indication that pricing pressure has gradually eased, Chan said.

Chan was optimistic about prospects in the second quarter, citing steady momentum for all of the company’s three product sectors — specialty DRAM, mobile DRAM and NOR flash.

The booming market in smartphones and tablets has sparked strong demand for mobile DRAM products, Chan said, adding that market digestion of mobile devices in the second half of this year would influence demand at year’s end.

Despite a weak PC market, Chan expects the rise in networking devices to boost momentum for specialty DRAM products in the second quarter.

In addition, a rising average selling price for PC DRAM products is expected to support prices for specialty DRAM, Chan said.

Shares in Winbond declined 4.05 percent to close at NT$8.53 yesterday. The stock has climbed more than 40 percent this month, Taiwan Stock Exchange data showed.

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