November 9, 2001 – Taipei, Taiwan – Winbond Electronics Corp. said it would gradually move out of IC production and shift to IC design.

The DRAM chipmaker’s announcement at an institutional investor briefing appeared to seal the fate of Winbond’s planned T$120 billion 300mm wafer plant, and signaled a difficult transition for a company already swamped in red ink, reported Reuters.

“There are a lot of DRAM makers that want to get out of the business. More companies will have bad news to announce before this is over,” said Rick Hsu, an IC analyst with Nomura Securities based in Taipei.

All Taiwan DRAM makers lost money in the 1H01 as the average price of a 128 megabit DRAM, the industry standard, plunged some 80% to around $1.10, while each costs $2.50 to $3.00 to make.

Winbond had already begun a shift out of DRAM production and now gets only 40% of revenues from the notoriously volatile product, down from 55% last year.