Winbond Electronics posted a third-quarter profit of NT$2.94 billion ($95 million), reversing four consecutive quarters of losses, as the Taiwanese chipmaker benefits from tightening supplies of older memory standards.
The memory market faces structural shortages that could persist through 2027, Chief Executive Officer Chen Pei-ming said at an investor conference Tuesday. Samsung Electronics, SK Hynix and Micron Technology have abandoned DDR4 and DDR3 production as they shift manufacturing capacity toward advanced DDR5 memory and high-bandwidth chips for artificial intelligence applications.
The supply squeeze stems from a technical mismatch: newer manufacturing processes below 14 nanometers require error-correction code functionality that older JEDEC memory standards don’t support, Chen explained. Once production equipment shifts to DDR5, reverting proves economically unfeasible.
Memory prices have surged more than 170% year-over-year, with customers approaching Winbond about long-term supply contracts. The company expects DRAM revenue, shipments and pricing to grow this quarter.
Flash memory sales rose 4.2% sequentially in the third quarter, reflecting price increases of 4% to 6% as production bottlenecks ease. Winbond’s 20-nanometer process now accounts for 37% of total shipments, with DDR4 output doubling last quarter.
