Wed, Oct 28, 2015 - Page 13 News List

Write-off dents Winbond profits

CONTAMINATION:Company president Chang Tung-yi said quality standards saw it write off NT$200 million, without which profitability would have been stable

By Lauly Li  /  Staff reporter

Memorychip maker Winbond Electronics Corp (華邦電子) yesterday reported net income of NT$731 million (US$22.37 million) for last quarter, down 23.98 percent year-on-year and 15.3 percent quarter-on-quarter, attributable mainly to a one-time write-off of flawed wafers caused by a contaminated machine.

Winbond president Chang Tung-yi (詹東義) said the company has strict standards regarding product quality, so it wrote off NT$200 million worth of wafers manufactured by the machine.

“If not for the NT$200 million write-off, our profitability for last quarter would have been stable,” Chan told an investors’ conference in Taipei.

Winbond’s earnings per share were NT$0.18 last quarter, compared with NT$0.25 the previous year and NT$0.22 the previous quarter.

Revenue dropped 4 percent year-on-year to NT$9.53 billion last quarter, but increased 3 percent on a quarterly basis, the firm said.

Chan said sales of Winbond’s specialty DRAM, which accounted for 54 percent of the firm’s total revenue last quarter, increased 8 percent from the previous quarter, driven by increased demand for automotive electronics applications.

“In recent years, we have been working on automotive and industrial applications, which could become an important growth driver next year,” Chan said.

Revenue contribution from the mobile DRAM segment weakened to 10 percent last quarter from 15 percent in the previous quarter, dragged down by soft demand for mobile devices, he said.

Winbond has entered the supply chain of a tier-one smartphone maker this year and the firm expects to receive large orders from the client this quarter, Chan said.

Sales of flash memory, which contributed 36 percent of Winbond’s sales last quarter, rose 8 percent from the previous quarter, fueled by growing orders for networking-related applications, Chan said.

Winbond expects to maintain stable earnings, thanks to the diversification of the firm’s products, clients and markets, despite the current quarter being a slow season for specialty DRAM, Chan said.

Winbond is not worried about rising competition from China, because most of its Chinese peers are focused on manufacturing large-storage memory chips, while Winbond’s products are small to mid-sized, high-quality memory chips, Chan said.

“Winbond will not be affected, because our clients are tier-one manufacturers and the firm has product differentiation from its rivals,” he said.

Separately, Winbond subsidiary Nuvoton Technology Corp (新唐科技) released its financial results for last quarter, posting net income of NT$148 million, or earnings per share of NT$0.71.

The result represented a 68.18 percent increase from the previous year’s NT$88 million, but a 7.5 percent decrease from NT$160 million the previous quarter.

Revenue for last quarter was NT$1.98 billion, up 11 percent year-on-year and 3 percent quarter-on-quarter.

Nuvoton president Sean Tai (戴尚義) attributed the increase to robust demand for the firm’s microcontrollers used in a wide range of applications.

“The strong demand for microcontrollers completely offset the decline in the PC segment,” Tai said.

The contribution from microcontrollers is likely to increase on the back of growing demand, Tai said.

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