Local memory maker Winbond Electronics Corp (華邦電子) yesterday posted a decline in its fourth-quarter financial results from the previous quarter, citing a traditional slow season for the quarter and pressure from falling average selling prices (ASP).
While the Hsinchu-based company reported its smallest quarterly profit during the past five quarters, Winbond stands to be the only local DRAM maker that was profitable in the final quarter of last year.
This is mainly attributable to the fact that the company has continued shifting its focus to special DRAM and NOR flash memory chips, while many of its local peers were left to suffer from weak prices in the volatile commodity DRAM chip market amid a supply glut.
In the period from October to last month, Winbond saw its net income reach NT$30 million (US$1.03 million), plunging 98.42 percent from NT$1.9 billion in the previous three months. Fourth-quarter revenues fell 10 percent to NT$7.74 billion from the previous quarter. On a yearly basis, fourth-quarter profit fell 91.23 percent, but quarterly revenues rose nearly 19 percent.
On Monday, larger rival Nanya Technology Corp (南亞科技) reported a net loss of NT$10.12 billion in the fourth quarter, while Inotera Memories Inc (華亞科技) posted a net loss of NT$4.60 billion for the quarter.
“Fourth-quarter revenues and net income fell due to seasonality factors and ASP drop,” Winbond said yesterday in a statement.
Strong price competition in the NOR flash market led to a gross margin of 12 percent in the fourth quarter, down from the 24 percent seen in the previous quarter.
However, with an increasing focus on special DRAM and flash memory chips that have better margins: “Winbond holds a cautious and positive perspective on 2011 business,” the company said.
About 91 percent of the firm’s sales in the fourth quarter came from specialty DRAM, mobile RAM and NOR flash memory chips, as commodity DRAM’s share has been declining on a quarterly basis, the company said.
By product categories, -specialty DRAM accounted for 35 percent of last quarter’s sales, followed by Mobile RAM’s 29 percent and NOR Flash’s 27 percent. In terms of product performance, mobile RAM outperformed other products on the back of strong demand for cellphone application, the statement said.
The company said it aimed to continue technology migration in mobile RAM to a 65 nanometer (nm) process and start 46nm low-power DRAM development to strengthen competitiveness. It also plans to start mass production of the 46nm specialty DRAM in the second half of the year, hoping that can help offset the impact of chip prices.
For the whole of last year, Winbond reported a net income of NT$3.55 billion, or earnings per share of NT$0.97. In 2009, the company saw a net loss of NT$8.61 billion, or losses per share of NT$2.36. Cumulative revenue from January last year to last month totaled NT$31.86 billion, up 63 percent year-on-year, with a gross margin of 20 percent.
Shares of Winbond rose 2.37 percent yesterday to NT$10.8 ahead of the release of its latest financial results. Over the past 12 months, the stock has climbed 30.12 percent, compared with the TAIEX’s 18.85 percent increase.
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