Winbond Electronics Corporation Announces 2004 Year-End Financial ResultsWinbond showed significant financial improvement in 2004 and holds a conservative attitude towards 2005

(Taipei News) Jan 31, 2004 - Winbond Electronics Corporation today announced the results of today's board meeting. The Company's Board of Directors reviewed and approved the 2004 financial report, which was also formally audited by the Company's CPA. Winbond's 2004 annual revenue was NT $31.215 billion. This reflects an increase of 6 percent, when compared to the Company's 2003 annual revenue of NT $29.549 billion. Winbond's 2004 net income after tax was NT $3.406 billion. Earnings per share was NT $0.81.

The semiconductor industry has been recovered since the second half of 2003. For more than one-year resuscitation, the growth turned to be slow after the second half of 2004. Due to Winbond's effective transformation strategy and success from a better product mix, gross profit in 2004 increased to NT $9.652 billion, and gross margin relatively improved to 31%. Annual operating profit was $3.409 billion, a significant growth when compared to the Company's 2003 operating loss of NT $1.614 billion. Specialty DRAM and PSRAM's contribution to total revenue increased to 55%, while Commodity DRAM's contribution decreased to 10%, reflecting the Company's endeavor to focus on mobile memory products and the success of Winbond's transformation.

Winbond's net sales totaled NT $6.605 billion in the fourth quarter of 2004, a decrease of 12% over the previous quarter. Fourth quarter operating profit was NT $330 million, with net income after tax totaling NT $94 million and earnings per share at NT $0.03. In terms of Memory products, the decrease in PSRAM revenue was mostly due to the acute competition and lower sales volume from customer's continuous adjustments with their inventory. Non-DRAM Memory and Specialty DRAM sales were relatively flat compared to that in the last quarter. In terms of Logic products, uC-based consumers IC sales fell due to seasonal effects, while the demand side of Motherboard I/Os and LCD Driver ICs did not match the expectation, also affecting Q4 revenue.

Winbond implemented explicit management strategy and positive operating reinforcement after its transformation, thus demonstrated significant progress in its financial performance. With regards to process technology advancement, all of the Specialty DRAMs successfully migrated to 0.13um at the end of 2004. In addition, the company successfully launched the 1.3 Megapixel to 2.1 Megapixel handset Digital Still Camera (DSC) Backend ICs with MPEG4 function. The Image Signal Processor (ISP) for 1.3 Megapixel to 3 Megapixel camera handsets has also been in the sampling stage. Winbond also continued to promote the 40-and 64-channel polyphonic ringing tone chips in the market, which has won market recognition.

Looking forward to 2005, by positioning itself as a Mobile Electronics Solution Provider, Winbond commits to deliver various Logic ICs and mobile memory products designed for handset applications to increase revenue. In addition, Winbond expects to see a fast growth in the Driver IC market due to the increasing demand of LCD panels. Shipments in Specialty DRAM in 1Q 2005 are also expected to increase. As a whole, the visibility of semiconductor is vague; Winbond maintains a conservative attitude towards 2005.

    Wilson Wen
    Vice President of Administrative Center

News Liaison
    Mike Liu
    Deputy Director

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