(Taipei News) Winbond Electronic Corporation today announced the results of a board meeting held on January 30, 2002. The Company Board of Directors reviewed the 2001 Financial Report, which has been audited by the Company's CPA. Winbond reports 2001annual revenue of NT $24.132 billion. This reflects a decrease of 50.91 percent, when compared to 2000's annual revenue of NT $49.158 billion. The Company's 2001 total loss, before taxes, is NT$ 8.787 billion. Winbond's total after tax loss is NT $10.658 billion and net loss per share is NT $2.41.
Last year presented a significant challenge for semiconductor companies. Because the global economy moved into a recession in 2001, global semiconductor companies suffered severe losses. In addition, excess production of DRAM caused prices to decline sharply; last year's Company revenue declined by approximately 50 percent year over year.
To recap last year's revenue, the lowest revenue month for Winbond was July, which reported revenue of NT $1.6 billion. December's revenue was NT $2.04 billion, which accounted for the fifth continuous month the Company experienced growth in sales. This trend leads the Company to believe that the worse may be over and business may continue to improve. Since last November, demand for PCs has started to improve and the Company estimates that demand will continue to increase. As a result, Winbond expects the Company's first quarter sales revenue may reflect a change for the better.
Because Winbond's fourth quarter operations saw improvement, sales for that quarter were NT $5.7 billion, an increase of 16 percent when compared to the third quarter. Net cash provided by operating activities also went from negative to positive in the fourth quarter. In the fourth quarter of last year, the Company revised its inventory and pricing policy. The Company implemented stricter policies on provisions for losses caused by the slow moving of inventories and spare parts. In terms of inventory, we re-defined the slow moving items as finished goods with only few shipments within three months and made provisions on them. In addition to this, we made further provisions on the specific products whose current inventories exceed the estimated sales for next six months. As for the spare parts, which were not provisioned as loss before, we also recognized obsolescent loss for those have not been used for 1.5 years. In addition, with regard to the long-term investments, the investees booked at cost have been re-evaluated and recognized necessary permanent devaluation losses according to each individual company's business operation. These changes provide a much more accurate investment profile.
In tandem with this more positive business outlook in the future, Winbond decreased the deferred tax assets and recognized a NT$1 billion tax expense in the fourth quarter. If the future profitability is better than what we expect, then the said deferred tax assets could be recovered and tax benefit will be booked accordingly.Therefore, the fourth quarter operational loss was extended to NT $4.6 billion. Finally, in spite of the allowance taken, the Corporation's cash flow, before tax revenue and operational results by sales still grew in the fourth quarter of 2001, when compared to the third quarter.
Winbond expressed that, even though in 2001 global semiconductor companies all faced the challenges of a weakened economy, the Company took advantage of this period to redouble its efforts, focusing on strategy and preparing for future challenges. The Company's Logic Product Business Group will concentrate on more competitive markets such as: Motherboards, LCD Driver ICs, Smart I/O ICs, wireless communications and consumer IC products. With respect to memory products, Winbond will pursue the strategy it has been working for since last year. Over the next three years, the Company plans to gradually move away from focusing on standard DRAM and switch itĄŚs main memory product focus to Flash memory and niche DRAM products. The commitment to pursue 0.11-trench technology for DRAM production process has already included in the plan. The Company has the capability to complete the process work itself, or pursue the option of working with other companies. Winbond continues to emphasize that it's strategic plans for DRAM will not be affected by any rebound in DRAM price.
This year's outlook for semiconductors has already shown positive signs, pointing to an improved business outlook for 2002. After the experience of last year's downturn, aggressively fulfilling new product line needs, and pursuing new technology production process technology, Winbond has emerged even more focused as a company. The Company is dedicated to providing its customers with the most value-add solutions in the industry now, and in the future.
Spokesperson
Wilson Wen
Vice President of Administrative Center
Tel：03-5792755
News Liaison
Mike Liu
Deputy Director
Tel：03-5792516
Email：ckliu@winbond.com