Local memorychip maker Winbond Electronics Corp (華邦電) yesterday said it had decided to increase its capital expenditure (capex) by 30 percent to NT$13.8 billion (US$458.9 million) for this year, mainly to expand its capacity.
The Hsinchu-based company had planned to increase its effective capacity from 38,000 wafers to 40,000 wafers per month. Now, it plans to raise its effective capacity to 44,000 wafers per month. In addition, as Winbond continues to migrate toward 46-nanometer and 58-nanometer process technologies, the company needs to make a substantial investment in front-end equipment, such as lithography machines.
Last quarter, 46-nanometer DRAM and 58-nanometer Flash memory products accounted for 55 percent of Winbond’s total wafer shipments, compared with the 51 percent seen in the previous quarter, according to a presentation document released on the company’s Web site following a quarterly investors’ conference.
The company told investors that it planned to raise capital spending for this year for the third time. In late April, the company raised its capex budget to NT$10.6 billion from the NT$8.2 billion originally budgeted.
Last year, Winbond spent NT$2.1 billion on new manufacturing facilities.
Looking ahead, Winbond said that consumer demand looks robust in this quarter and next quarter, but that upcoming launches of new models may create a fluctuation in chip demand in the final quarter of the year.
While there seems no significant change in the DRAM supply-demand situation within the next year, Winbond said the trend toward the Internet of Things (IoT) and wearable devices would likely stimulate demand for mid to low-density memory products, according to the document.
That is because increasing memory content per device or box due to increasing functions embedded in electronic devices would boost demand for memory products, Winbond said.
In addition, low density NAND Flash products are set to replace some sockets of high-density NOR Flash products and there is increasing demand for mid and low-density NOR Flash products in IoT applications and wearable devices, it added.
In the second quarter, the company saw its net profit jump nearly two-fold to NT$784 million from the previous quarter’s NT$397 million as favorable market demand boosted chip prices and shipments, particularly in the DRAM, mobile DRAM and Flash memory sectors.
Last quarter’s net profit was the highest seen in the past 15 quarters, with earnings per share of NT$0.19, company data showed.
Consolidated revenue grew 11.32 percent quarter-on-quarter to NT$9.74 billion last quarter from NT$8.75 billion, rising 10.13 percent year-on-year from NT$8.85 billion.
Specialty DRAM chips are Winbond’s biggest revenue source, making up 51 percent of its overall revenue last quarter. They were followed by mobile memory products, with a 13 percent share, and Flash memory products, with 36 percent.
Gross margin improved to 28 percent last quarter from 26 percent in the previous quarter and 23 percent a year ago, company data showed.
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