Winbond to cut production by 30% in Taichung

Memorychip maker Winbond Electronics Corp is to cut production by more than 30 percent at its Central Taiwan Science Park complex in Taichung in the fourth quarter of this year amid falling global demand.

The global market has shown signs of weakening demand for memory chips, including DRAM, which is used commonly in PCs and servers, Winbond chairman Arthur Chiao said on Saturday.

Aggressive interest rate hikes among global central banks along with inflation are dampening consumers’ willingness to spend on PCs and consumer electronics, Chiao said.

Consumers in the past two years had rushed to buy electronics in a booming stay-at-home economy during the COVID-19 pandemic, but the trend is fading as many people begin to travel again, he said.

With inventory adjustments expected to continue into the middle of next year, Winbond expects to report a 30 to 40 percent reduction in output at its Taichung science park complex from October to December, Chiao said.

Another Winbond plant, in Kaohsiung, is to maintain full production, with some workers in the Taichung facility to be relocated to Kaohsiung, he said.

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 Winbond’s 25S technology, an equivalent to the 20-nanometer process in the DRAM industry, Chiao said.

However, the company is postponing equipment installation for the second phase to the second half of next year, he said.

The second phase is expected to roll out an additional 10,000 units a month in 2024 using the firm’s D20 technology, another equivalent to the 20 nanometer process, Chiao said.

Chiao said he is cautious about market demand in the first half of next year, but he expects demand to improve significantly in the second half.

Rival Nanya Technology Corp last month announced that it would cut capital expenditure by more than 20 percent to NT$22 billion (US$707.03 million) this year, with spending for manufacturing to be lowered by about 40 percent in the wake of a slowdown.

Nanya next year plans to cut spending for manufacturing by an additional 20 percent or more, citing market uncertainty.

Winbond posted NT$6.23 billion in consolidated sales last month, down 15.31 percent from a month earlier and a 26-month low.

Nanya Technology’s consolidated sales dipped 13.23 percent month-on-month to NT$2.78 billion, the lowest in more than nine years. Taipei Times