Memorychip maker Winbond Electronics Corp (華邦電) yesterday was optimistic about the company’s growth in the coming months, after posting net profits of NT$462 million (US$14.86 million) last quarter, an 11.33 percent increase from NT$415 million in the first quarter.
However, gross margin decreased to 26 percent from 32 percent in the first quarter, the chipmaker said.
“We have cut production to sync with demand and avoid large inventories,” Winbond president Chan Tung-yi (詹東益) told an investors’ conference in Taipei.
Prices dropped due to volatility caused by trade tensions between the US and China, Chan said.
Price declines in the first half of this year reduced revenue by about NT$500 million, Winbond chief financial officer Jessica Huang (黃求己) said.
The chipmaker posted revenue of NT$22.9 billion in the first two quarters of the year, down from NT$25.64 billion a year earlier, a company financial report showed.
“The market was overly saturated in past few months … but we are seeing improvements,” Chan said.
“We have resumed full production this month,” he said, adding that the worst is over and the market is recovering with demand inching up.
Asked whether the trade dispute between South Korea and Japan would affect the company, Chan said it would have a positive effect on Winbond.
“I believe we are looking at new opportunities here,” he said.
As Winbond has gained a larger market share, the company is focusing on ramping up production of its 25-nanometer (nm) chips, Chan said, adding that it has already increased to 2 percent of overall DRAM production from 1 percent in the first quarter.
“The demand for 46nm chips remains very stable,” he said, adding that the chips made up 69 percent of DRAM production last quarter.
Winbond has budgeted capital expenditure of NT$18.5 billion this year, as it is continuing to invest in its 12-inch fab in Kaohsiung, which is expected to begin shipments in three years, Chan said, adding that the company has secured a NT$42 billion seven-year syndicated loan for the fab.
He said that Winbond has set its sights on the automotive and industrial segment, where “there is a lot of potential.”
The automotive and industrial segment contributed 20 percent of overall revenue in the first half of this year, an increase from 16 percent over the same period last year.
In the first half, Winbond made 30 percent of its revenue from the consumer segment, 29 percent from the communication segment and 21 percent from the computer segment.
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