Memorychip maker Winbond Electronics Corp (華邦電) yesterday said net income last quarter dropped nearly 20 percent from the previous quarter, due to this year’s slow season for the semiconductor industry.
However, the Hsinchu-based company said it still outperformed many of its peers amid softening demand in the PC sector in the first half, due to its more diversified product mix and focus on specialty DRAM.
“In addition, the decline in commodity DRAM prices did not impact our sales significantly last quarter,” Winbond president Chan Tung-yi (詹東義) told investors in Taipei.
In the April-to-June quarter, net income totaled NT$836 million (US$26.4 million), down 19.9 percent quarter-on-quarter, but up 12.2 percent year-on-year.
Earnings per share were NT$0.22 last quarter, compared with NT$0.27 in the first quarter.
The majority of the firm’s sales last quarter came from specialty DRAM, mobile RAM and NOR flash memory chips, while commodity DRAM’s contribution has been on the decline due to PC market weakness.
Chan said the sales performance of the company’s high-density 1Gb code storage flash memory products remained stable.
However, like other semiconductor companies, Winbond faced slower demand from emerging markets last quarter because of the strong US dollar. Along with weak growth momentum in the TV and handset segments, Winbond encountered declines in the average unit price of mobile DRAM and specialty DRAM, affecting its sales and margins.
Last quarter’s gross margin was 32 percent, down from 32.2 percent in the previous quarter, while sales last quarter totaled NT$9.3 billion, a 5 percent decline from NT$9.7 billion in the first quarter.
“The company’s focus now lies in providing leading solutions and striving to maximize profit per wafer, as opposed to total wafer shipment volume,” Chan said.
For this quarter, the company expects a continued downturn in demand due to inventory adjustments, Chan said.
The situation is expected to stabilize in the final quarter of this year, he added.
In addition, NOR flash sales are expected to remain stable in the second half on account of emerging opportunities in the Internet of Things sector, with the firm foreseeing continued growth in the code storage flash market, Chan said.
“We believe that Winbond will bounce back stronger than ever when macroeconomic uncertainties subside,” he said.
Chan said Winbond’s industry position has gradually elevated and the company plans to shift to a 30-nanometer fabrication process in the second half of next year from this year’s mainstream 40-nanometer technology.
However, the company will remain cautious regarding production capacity expansions, he said.
Commenting on the acquisition of US-based fabless semiconductor company Integrated Silicon Solution Inc by a Chinese consortium for US$756 million late last month, Chan said that Winbond’s lead in the specialty DRAM sector will be largely unaffected.
“What holds back Chinese rivals from tapping into the specialty DRAM market is their reluctance to commit to quality,” he said.
Meanwhile, Winbond chief financial officer Jessica Huang (黃求己) said the company’s board yesterday approved a plan to repurchase 80 million common shares, or about 2.17 percent of the company’s outstanding shares, on the open market between Monday and Oct. 2.
“We were considering a number of stock investments with our cash and settled on initiating a capital reduction,” Huang said.
The company plans to spend up to NT$2.8 billion to repurchase its shares at between NT$6.5 and NT$8 per share.
Winbond shares closed 8.93 percent higher yesterday at NT$6.95 in Taipei trading. They have dropped 35.94 percent so far this year.
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