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Winbond Chairman: Memory Shortage and Price Hikes to Persist Until Second Half of Next Year

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • The chairman of memory chip manufacturer Winbond Electronics predicts a global shortage of memory chips will continue until the second half of next year, driven by the burgeoning AI industry.
  • He noted that AI development is progressing faster than expected, leading to a structural and comprehensive shortage across DRAM, NAND Flash, and NOR Flash, with expansion efforts hampered by a lack of cleanroom facilities.
  • Winbond is actively expanding production and planning a new factory in Kaohsiung, aiming to raise funds through a GDR issuance, while the company's president anticipates the shortage could extend to 2028.

The global memory chip shortage, fueled by the rapid rise of artificial intelligence, is expected to persist until at least the second half of next year, according to Winbond Electronics Chairman C.C. Chien.

AI is just beginning to develop and is expected to gradually expand its development until 2050. Taiwan has seized the AI opportunity and the electronics industry has benefited greatly. Currently, the memory industry is in a state of comprehensive shortage.

— C.C. ChienWinbond Electronics Chairman C.C. Chien on the impact of AI on the memory chip industry.

Chien stated that AI's development has surpassed his expectations, creating a structural and comprehensive shortage across DRAM, NAND Flash, and NOR Flash. He highlighted that expanding production capacity is proving difficult, particularly due to a scarcity of cleanroom facilities.

The memory industry has entered a cyclical period of structural and comprehensive shortage, and the state of supply not meeting demand is expected to continue until the second half of next year.

— C.C. ChienWinbond Electronics Chairman C.C. Chien on the duration of the memory chip shortage.

To address the growing demand, Winbond is accelerating its expansion plans. The company will introduce new production capacity by the end of this year and is designing a second factory in Kaohsiung, slated for construction next year and production around 2029. To fund these initiatives, Winbond plans to issue up to 200 million GDRs in the second half of the year.

Memory has become a 'strategic material' in the AI era.

— Tony ChenWinbond Electronics President Tony Chen on the importance of memory in the AI era.

Winbond President Tony Chen emphasized that memory has become a "strategic material" in the AI era. He noted that system-on-chip designs for servers and personal computers must now prioritize memory selection and supply assurance. Given industry expansion timelines and customer demand, Chen believes the memory shortage could extend to 2028. He also reported that Winbond's second-quarter revenue and profits are expected to grow, with gross margins showing a significant improvement due to price increases exceeding expectations for DRAM, NAND Flash, and NOR Flash.

From the expansion schedules of peers and customer demand, the memory shortage may continue until 2028.

— Tony ChenWinbond Electronics President Tony Chen on the potential long-term duration of the memory chip shortage.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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