Memorychip maker Winbond Electronics Corp (華邦電子) yesterday said it is increasing prices to reflect persistent supply constraints, as emerging applications are adding to the effects of the COVID-19 pandemic in driving demand for chips.
Aside from computers, the chipmaker attributed supply constraints this year to new applications, such as Wi-Fi 6, advanced driver assistance systems, video game consoles and new wireless earbuds.
Those applications consume much more storage space, some even double the average, Winbond said.
Without new fabs in production, Winbond can only increase production capacity 1 or 2 percent on the 57,000 wafers its factory produces per month, company president James Chen (陳沛銘) told investors in a virtual conference yesterday.
“Supply is very tight. We have sold out our capacity for deliveries in the second quarter,” Chen said.
“Chip prices, DRAM chips in particular, have long been under reasonable levels in the past. We hope [new] chip prices can reflect the current market situation,” he said.
Winbond expects price hikes to boost its revenue this year with more marked effect from next month or April, Chen said, adding that price increases are to lift its gross margin further this quarter.
The chipmaker’s gross margin climbed to 30 percent in the fourth quarter last year thanks to higher prices and lower manufacturing costs, hitting its highest level in seven quarters.
The disparity between chip supply and demand is to extend into the second half of this year from the final quarter of last year, Chen said.
The supply crunch of NOR flash memory chips used in vehicles is to worsen as the severe winter storm in Texas this week shut down factories for major auto chips suppliers, including Cypress Semiconductor and Infineon Technologies, he said.
Winbond, the world’s biggest supplier of NOR flash memory chips, does not expect to win more orders from its peers any time soon, as it has no spare capacity to fill the void, he added.
Chips used in vehicles and industrial devices contributed 19 percent to Winbond’s memorychip revenue last year, while its communication segment was the biggest contributor with a 33 percent share.
Winbond’s new factory in Kaohsiung is to start operations at the end of next year at the earliest, after moving in new manufacturing equipment in the first half of next year, the chipmaker said.
It yesterday raised capital spending to about NT$12.7 billion (US$448.16 million) for this year, up 60.8 percent from NT$7.9 billion last year.
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