Highlights

Winbond has experienced a robust increase in orders since July, aiming for a revenue milestone of NT$100 billion next year, driven by a structural DDR4 shortage. The company plans new expansions to address this demand. A strategic shift towards AI applications underscores the changes in the global memory supply landscape.

Sentiment Analysis

• Positive sentiment towards Winbond's strategic growth and improvements, seen as a forward-thinking response to market shifts.
• The structural DDR4 shortage is a challenge, but it also represents a growth opportunity.
• However, cautious sentiment exists about future economic conditions and global supply chain dynamics.

Article Text

Winbond Electronics held its annual family day event where CEO Peiming Chen highlighted their substantial increase in orders starting in July. This uptick is driven by new and existing customers seeking long-term partnerships, marking a significant shift attributed to the DDR4 structural shortage. The company aims to reach a revenue target of NT$100 billion next year, positioning it as Taiwan's seventh semiconductor firm to achieve such a milestone.

Chen pointed out the structural supply gap with DDR4 as memory suppliers focus on AI applications. Winbond and Nanya are now leading suppliers in this landscape. Planned expansions in Kaohsiung and Taichung are set to address this demand, with capital expenditures potentially exceeding NT$10 billion.

DDR4 lacks ECC compensation mechanisms and cannot be produced below 12nm technology nodes, creating a bottleneck as companies move forward with more advanced nodes. Winbond's current capacity in Kaohsiung is approximately 15,000 wafers monthly, with a maximum capacity of 27,000 wafers focusing on DDR3 and DDR4.

Regarding NOR Flash, Winbond retains its global leadership, seeing increased shipments in Q3 from automotive, PC, and networking applications. As capacities upgrade from 256MB to 512MB, usage doubles due to reduced wafer yields. This demand surge has led to price hikes in Q3, expected to continue in Q4.

Winbond is also advancing in AI edge computing with its Cube architecture, expecting significant orders from 2026 and ramp-up in 2027, which could become a major business focus.

Chairman Yu-Jun Chiao reflects on a challenging year shaping up positively. Though memory market dynamics rely on AI trends, DDR4's price increase is somewhat reactive to AI's influence on production capacity. While AI boosts Taiwan's semiconductor sector, economic prosperity isn't uniform, necessitating careful expansion planning.

In response to the geopolitical and supply chain shifts between the US and China, Chiao states that while Winbond will not establish facilities in the US, it will concentrate on low-capital projects like design, sales, and application development to capitalize on market trends flexibly.

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