Hefei Changxin DRAM will be mass-produced by the end of the year

Memory manufacturer Winbond Electronics held its regular shareholders meeting on the 14th. In response to rumors that Hefei Changxin Memory has designed its own DRAM products and is expected to go into mass production by the end of the year, Chairman Jiao Youjun said that he does not think there is a threat because Winbond focuses on cultivating small niche markets, but the mainland company's ambition is a national strategy, so there should not be much competition between them.

       In addition, the market believes that Infineon's announcement of the acquisition of Cypress will help Winbond expand its market share in NOR Flash. Jiao Youjun revealed that he is indifferent to whether Infineon will reduce its external procurement volume. He believes that competition is the norm and that the company's operating strategy cannot be changed just because of one person joining or leaving. It must be faced with a normal mind.

      Jiao Youjun added that Infineon's acquisition of Cypress is mainly to expand the market share of microcontrollers (MCUs), and other strategic layouts are unclear, "but if you ask me to think for him," network resource security is very important in the future. To protect all electronic system users from hackers, if we can put our NOR Flash in their systems, it will be a good cooperation. He also emphasized that Winbond's NOR Flash has a global market share of 35%, ranking first in the world.

     Winbond Electronics' shareholders' meeting today approved the distribution of a cash dividend of NT$1 per share (same unit below). What's special is that the company also amended its articles of association to change the profit distribution to once every six months, which seems to echo TSMC's practice. Jiao Youjun said that this is not mandatory and will be distributed once every six months "if possible", which gives the board of directors and shareholders more flexibility, and the actual distribution method will depend on the situation each year.

      Winbond is building a new 12-inch plant in Kaohsiung, which is expected to be completed by the end of next year and start mass production in 2021, with a planned production capacity of 27,000 pieces. General Manager Zhan Dongyi said that the new plant is a major milestone for the company, and the company will mainly develop 20-nanometer processes in the future. Jiao Youjun said that after the financial department evaluated the best combination of equipment, it was considered that mass production in 2021 is a very suitable time point, and it will be expanded according to the growth pace of customers, and is optimistic about the long-term market growth.

      As for the Zhongke plant, Zhan Dongyi said that many new products were developed last year, which was an important achievement of innovation, and the production capacity has increased from 44,000 pieces to 52,000 pieces; Jiao Youjun added that the market conditions are gradually improving, and the utilization rate was less than 80% in the first quarter of this year, and it has rebounded to 85% in the second quarter.

      Looking ahead to this year, Zhan Dongyi pointed out that Winbond's inventory on the production line has returned to normal. Although prices continue to fall, there are good signs of recovery in order demand and the number of shipped particles, which has driven continued growth in revenue in April and May. He is also optimistic about the continued increase in terminal demand as a driving force for operations in the second half of the year.

      Winbond's consolidated revenue for the whole year last year was 51.19 billion yuan, an increase of 8% year-on-year, a record high. Among them, memory products accounted for 80% of the revenue, and logic products accounted for 20%. The gross profit margin was 37%, an increase of 3 percentage points over the previous year. The consolidated net profit after tax was 7.73 billion yuan, a significant increase of 33% year-on-year, and the earnings per share were 1.87 yuan.