Winbond Electronics Corp., one of the leading memory chip suppliers in Taiwan, has decided to cut production by more than 30 percent in its complex located in the Central Taiwan Science Park (CTSP) in the fourth quarter of this year amid falling global demand.
Over the weekend, Winbond Chairman Arthur Yu-Cheng Chiao (焦佑鈞) confirmed that the global market had showed signs of weakening in demand for memory chips, including DRAMs, which are used commonly in PCs and servers, as the war in Ukraine had contributed to pushing up inflation, which led to an aggressive rate hike cycle among the major central banks that has dampened consumers’ willingness to spend.
In the past two years, Chiao said, consumers had rushed to buy electronics products in a booming stay-at-home economy amid COVID-19, but now this buying had faded as many people tended to go travelling due to eased border controls in the post-pandemic era.
With inventory adjustments expected to continue into mid-2023 due to weakening global demand, Chiao said Winbond would lower production in its complex located in the CTSP in Taichung by 30 percent to 40 percent during the October-December period, while another plant located in Kaohsiung, southern Taiwan, would maintain full production with some of its workers in the CTSP facility to be dispatched to the Kaohsiung site to help.
Production in Kaohsiung
Chiao said the production capacity in the first phase of the Kaohsiung plant is expected to hit 10,000 units a month in the first quarter of next year, using its 25S technology, an equivalent of the 20-nanometer process in the DRAM industry, but the company had decided to postpone the equipment installation of the second phase by six months to the second half of next year.
The second phase is expected to roll out an additional 10,000 units a month in 2024 using its D20 technology, which is also an equivalent of the 20nm process, Chiao said.
While he was cautious about market demand in the first half of next year, Chiao said demand is expected to improve in the second half.
Rival Nanya Technology
Last month, rival Nanya Technology announced it would cut its capital expenditure budget by more than 20 percent to NT$22 billion for 2022, with spending for manufacturing to be lowered by about 40 percent in the wake of a slowdown.
For 2023, Nanya Technology will slash spending for manufacturing by an additional more than 20 percent from a year earlier, citing market uncertainty.
In October, Winbond posted NT$6.23 billion (US$199 million) in consolidated sales, a new low in 26 months, down by 15.31 percent from a month earlier, while Nanya Technology’s consolidated sales dipped to NT$2.78 billion, the lowest in more than nine years, down by 13.23 percent from a month earlier.
In September, U.S.-based DRAM giant Micron Technology Inc. announced it would lower capex by more than 30 percent for the fiscal year of 2023, while South Korea’s SK Hynix Inc. also moved to cut its spending by more than half for 2023.
Source: Focus Taiwan News Channel