Winbond Electronics Corporation Announced the Financial Results for the Fourth Quarter and Year-End of 2008

Taipei, Taiwan, R.O.C., February 6, 2009--Winbond Electronics Corporation today announced the financial results for the fourth quarter of 2008. Net sales totaled NT $3.778 billion, a decrease of approximately 25 percent when compared with NT $5.066 billion of the third quarter in 2008. Net loss after tax was NT$3.438 billion. Net loss per share was NT$0.93. The accumulated revenue from January to December of 2008 totaled approximately NT$ 21.828 billion. Net loss after tax was NT$ 7.365 billion. Net loss per share was NT$2.

As the economic downturn continuously hits PC and Consumer market demands, revenue and gross profit decreased QoQ. Besides, regarding to Qimonda's insolvency filing in Germany, Winbond reserved NTD 560 million as allowances for doubtful accounts in the fourth quarter of 2008 as a result of its conservative financial principles, which also hurt the profitability.

Under the difficult pricing environment, revenue of memory IC manufacturing declined QoQ. Triggered by weakening demands of end markets, our major customers are taking steps to cut their inventory levels which resulted in a further cut back of product demands. In the Specialty DRAM segment, shipments reduced QoQ; however, gross margin kept improving driven by efforts to shrink technology. Mobile RAM performed steadily in the fourth quarter. NOR Flash shipments also drop when compared to the third quarter due to the slowdown of PC markets.

As of January 31, 2009, the unpaid accounts receivable for DRAM wafers shipped to Qimonda were about NTD 950 million. Although NTD 560 million reserved as allowances for doubtful accounts in the financial results of the fourth quarter impacted Winbond’s profitability, neither Winbond’s determination nor legal position to claim against Qimonda would be wavered. Winbond will adopt a strategy of direct selling or any achievable way to sell Commodity DRAM. In addition, the 65nm Buried Wordline DRAM technology which successfully migrated and entered the mass production stage in the first quarter of 2009 is competitive for own branded products till 2012. Winbond will not rule out any possibility to develop advanced technology as well. The rights and shareholders’ interests will be protected as utmost as possible by Winbond.

Looking forward to 2009, Winbond will adopt cautious approach to riding out finical storm. Thanks to the mass production in the first quarter of 2009 scheduled as planned, the 65nm Buried Wordline DRAM technology will be took advantages to develop low power consumption Mobile Memory. The Company will continue moving forward with optimum competitiveness in the niche memory market by gaining advantages of faster cycle time, lower production cost, and better time to yield to meet the customer-driven demands. Besides, in the future, Winbond will speed up the transfer of outsourced branded non-commodity DRAM and NOR Flash to 300mm wafer fab, to generate cash inflow and expand the market shares. The flexible adjustment of production capacity will also contribute to minimize the impact from the price fluctuation and drive better profitability. 

    Wilson Wen
    Executive Vice President of Memory IC Manufacturing Business Group 

News Liaison
    Mike Liu
    Deputy Director

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