Winbond Electronics Corporation Announced the Financial Results for the Fourth Quarter and Year-End of 2007

(Taipei News) Winbond Electronics Corporation today announced the results of audited financial statements for the fourth quarter of 2007 which has been approved by the Board of Directors in the meeting held on February 1, 2007. Net sales totaled NT $6.82 billion. Net loss after tax was NT$4.141 billion; net loss per share was NT$1.12. The accumulated revenue from January to December of 2007 totaled approximately NT$ 32.104 billion, a decrease of approximately 6.9 percent when compared with NT $34.488 billion over the same period last year. Net loss after tax was NT$ 5.812 billion; net loss per share was NT$1.57.

Although the demands of handset and PC markets grew steadily in 2007, the DRAM price crashed due to the demand-supply imbalance. With the softness in the global semiconductor industry and DRAM price, Winbond’s operating profit was a loss last year.

The over supply and continuously falling average sales price (ASP) in the Commodity DRAM market led the revenue in the fourth quarter dropped. As for other memory products, shipments of Mobile RAM slightly ramped up owing to the increasing customers’ demands. However, price erosion in high density markets like HDD and networking offset the growth of Specialty DRAM. Thanks to the improved product mix, Flash performed steadily and gross margin increased when compared to the third quarter.

In terms of logic products, revenue of the Consumer Logic Products including speech related ICs decreased due to the low season effect. The weakness in Computer Logic product market also hurt the shipments of motherboard I/O. Notebook I/O was still affected by price pressure of domestic competitors. As a whole, revenue of the logic products in the fourth quarter slightly fell compared to the previous quarter.

Facing the fast changing and cost-effective semiconductor market, Winbond continues moving forward with maximum competitiveness by integrating resources and concentrating operating scope. For example, as the 200mm wafer fab was not competitive to produce niche DRAM products anymore, we sold the fab and transferred the capital and personnel to the 300mm wafer fab. To consolidate our competitive advantage, we kept up with the latest technologies through our international partnerships. Besides, the company reorganized the structure into five business groups and adopted a profit-centered model to streamline its operations. Now the Board of Directors further considers forming a new subsidiary designated for the logic product business and keeping Winbond responsible to memory product design and production. With simplifying its business model, Winbond will definitely grasp the market tendency.

Looking forward to the first quarter of 2008, the handset and PC markets are going to the traditional low season. The company will strategically adjust the product mix to deal with market changes. Having streamlined business model, improved operation efficiency, and enhanced manufacturing technologies, Winbond is still a competitive branded company in the industry now, and in the future. 

    Wilson Wen
    Vice President of Administrative Center

News Liaison
    Mike Liu
    Deputy Director

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