Winbond sales rise for 4th straight month

Winbond Electronics Corp (華邦電子) said November sales fell more than half from a year ago, though they rose for the fourth straight month as Taiwan's biggest computer memory-chip maker raised prices and sold more non-memory chips.

Sales in November fell to NT$1.9 billion (US$56 million) from NT$3.96 billion a year ago, the company said in a statement, reflecting a decline in prices during the industry's worse-ever global slump. However, sales rose a tenth from NT$1.7 billion in October amid forecasts of a rebound in sales.

Memory-chip prices have risen by almost half since the beginning of November, after dropping more than three-quarters in the past year. Worldwide, memory-chip makers are seeking to merge to cope with slumping demand. Last week, Micron Technology Inc and Hynix Semiconductor Inc said they were in talks to form a "strategic alliance."

"Continued price gains depend on a recovery in demand and a merger between Micron and Hynix," said Yu Wei-kuo, who manages NT$130 million in stocks at Polaris Investment Trust Co (寶來投信).

Global sales of computer-memory chips are forecast to decline 67 percent this year, as shrinking sales of personal computers and mobile phones and other handheld devices worsened an oversupply of chips, according to Dataquest Inc.

All Taiwan's memory chipmakers posted losses in the third quarter as chip prices slumped to about half the cost of production.

Even as chip prices rose, Winbond devoted less than a third of its capacity to its unprofitable memory chip business in November, although it raised its contract price for those chips, Winbond spokesman Hander Chang said.

The company focused production on semiconductors used to run multimedia electronics such as flat-panel displays. Those sales rose, Winbond said.

Rising chip prices prompted rival Powerchip Semiconductor Corp (力晶半導體) to reconsider an October decision to delay installing equipment at the chipmaker's newest plant until May, said Eric Tang (譚仲民), a vice president at Powerchip. The equipment may be installed as early as in March, he said.

Powerchip's November sales rose almost a fifth from the previous month to NT$536 million.

With its standard memory chip business still unprofitable, Winbond said it plans to double production of so-called double data rate memory chips to about four-fifths of production by March next year.

The high-speed memory chips sell for a profit after prices more than doubled in the past month in anticipation demand will rise after Intel Corp introduces this month the chipset that works with memory chips in its latest Pentium 4 processor.

Chipsets help microprocessors communicate with the rest of a computer. Double data rate chips help speed communication between chips and the processor.

Rival Nanya Technology Corp (南亞科技), the nation's largest maker of double data rate memory chips, said November sales rose more than two-thirds from the previous month to NT$1.1 billion as customers rushed to buy the chips ahead of the Intel release.