Winbond Electronics Corporation Announces Financial Results For The First Half of 2003

(Taipei News) Winbond Electronics Corporation, a leading supplier of semiconductor solutions, today announced its financial results for the first half of 2003. Net sales for the 2003 second quarter reached NT $6,228 million, with net loss totaling NT $790 million. Net loss per share was NT $0.18. For the six months ending June 30 2003, the Company's net sales were NT $12,955 million with net loss reported at NT $1,682 million. Net loss per share for the first six months of 2003 was NT $0.39.

Winbond's revenue for the second quarter of 2003 reflected a decrease of 7 percent when compared to that of the first quarter of 2003. This was attributed to the slow season of the PC market which resulted in both a decrease of DRAM product shipments and average sale price. However, when compared to the previous quarter, net loss after tax improved from NT $890 million to NT $790 million. Gross profit for the second quarter of 2003 was NT $605 million and the gross profit margin, as a percentage of revenue, was 10 percent.

The financial report for the second quarter of 2003 reflected a 14 percent decrease in memory business. This was partially offset by an 8 percent increase in Logic business. While 256Mb DDR spot pricing went down by an average of 21 percent, Winbond's overall ASP dipped only 9 percent; owing to a favorable product mix . Non-DRAM Memory revenue was down 22 percent whereby the low-density Flash market suffered a severe oversupply and Winbond subsequently decreased shipments. Logic revenues grew by 8 percent in line with the Company's expectations. Consumer products ramped up for the high season, ending up with an increase of 28 percent. Conversely, PC and peripheral ICs weathered seasonal slowdown, resulting in an 8 percent growth of Logic revenues. The product breakdown, in terms of revenue for the second quarter, was as follows: commodity DRAM 26 percent, Pseudo SRAM and Specialty DRAM 31 percent, Non-DRAM Memory 8 percent, and Logic products 35 percent.

Winbond's long-term strategy of exiting from the volatile commodity DRAM market remains unchanged. In order to secure premium pricing, the Company remains flexible and has the capability to allocate capacity to products with higher ASP per wafer. Specialty DRAM and Pseudo SRAM contributed more than 30 percent of total revenues, exceeding commodity products. Winbond's pseudo SRAM, featuring low power consumption and highly density, has maintained its position as a major product in the high-end handset market. As momentum for demand continues, 9K to 10K wafers per month are expected in the fourth quarter of 2003. Furthermore, specialty DRAM, with 0.13-micron technology, will begin the customer qualification process in the second half of 2003. Mass production is expected to commence in the first quarter of 2004.

With respect to the Company's Logic product business, power control ICs have yielded good results, providing more complete and secure solutions for motherboards. Winbond's TFT- LCD Driver ICs for notebook computers began shipping in April. Moreover, ARM-based microcontrollers are gaining wide acceptance by customers. Overall, the Company's Logic IC business is expected to experience slight growth in the third quarter of 2003. Winbond's DDR-400 may benefit from premium pricing due to it's superior speed performance. In addition, sales of ICs for PC and peripheral products and color handsets with built-in cameras, are expected to address growing market trends and yield increased revenue.

    Wilson Wen
    Vice President of Administrative Center

News Liaison
    Mike Liu
    Deputy Director

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