On November 3, Winbond Electronics held its Q3 earnings call. Helped by rising prices and volumes for customized memory chips and high-capacity Flash, Q3 revenue jumped 278.2% year-over-year and net profit surged 1,103.5%. Despite strong results and the GM saying memory shortages will last through 2028, memory-cycle-peak concerns persisted, and Winbond shares closed limit-down at NT$146.
Q3 consolidated revenue was NT$82.331 billion**, up **37.6% quarter-over-quarter** and **278.2% year-over-year**; after-tax net profit attributable to parent was **NT$35.422 billion, up 45.7% QoQ and 1,103.5% YoY; quarterly EPS was NT$7.58**, far above Q2's **NT$5.4 and prior-year NT$0.65**. **First-three-quarter EPS reached NT$15.32. Q3 gross profit was NT$58.101 billion**, with **gross margin rising to 70.6%**, up about **5 points QoQ** and **24 points YoY**; operating income was **NT$43.784 billion, up 51.1% QoQ, at a 53.2% operating margin.
Memory was the core engine. Q3 memory revenue was NT$74.284 billion**, up **43.7% QoQ** and **425.6% YoY**, with **segment gross margin of 73.9%**, **operating margin of 59.8%**, and **utilization near 100%**. Quarterly **free cash flow was NT$29.920 billion, with cash and equivalents rising to NT$84.856 billion.
By product line, customized memory was 58% of consolidated revenue, Flash 32%, and Logic IC 9%. CMS revenue rose 50% QoQ and 600% YoY. As the world's top three memory makers exit traditional DRAM, Winbond has become one of the few stable suppliers of DDR3 and DDR4, with long-term contracts and close ties to automotive and industrial customers, while advancing 20nm and 16nm. On tight supply, CMS blended ASP in USD jumped nearly 60% in Q3, with 20nm the main growth driver and 16nm ramping. Flash revenue rose 34.0% QoQ and 200% YoY; with 24nm conversion and mix optimization, Winbond holds 60–70% global share in 512Mb+ high-density NOR Flash. A latest AI server architecture needs over 600 units of 512Mb Flash, and Enterprise SSD shipments are expected to gain momentum from 2027.
By end application, computing revenue rose 66% QoQ, communications 55%, automotive and industrial 36%, and consumer 35%. Networking rose 50% QoQ to 31% of total revenue, driven by switch, router, and server demand.
On outlook, GM Chen Pei-ming acknowledged seasonal correction in consumer electronics, with PC and consumer customers weakening after stocking in the first three quarters, but AI demand remains strong, creating an AI vs. non-AI market split. He expects Q4 DRAM contract prices to rise further, though less than in Q3; 2027 memory supply-demand will be tighter than 2026, with 2028 still tight, especially for DDR3 and DDR4. Winbond will keep targeting niche markets like DDR3, DDR4, and LPDDR4, with Q4 CMS prices expected to rise modestly, and 16nm exceeding 40% of CMS business from H2 2027. The company forecasts global server NOR Flash demand reaching 240 million units in 2027, a 33% CAGR from 2025 to 2028, with 512Mb high-capacity products at 65% of demand. On customer strategy, Chen stressed prioritizing long-term partners and long-term agreement signers over the highest price or largest demand.
On capacity, the Kaohsiung Module A plant will fill to 24,000 wafers/month by year-end; Module B breaks ground December 29, with cleanroom planning 50,000–60,000 wafers/month, fully adopting 16nm, targeting small-volume shipments in H2 2029 and full capacity in 2030, with long-term supply agreement talks progressing. Customized high-bandwidth memory CUBE is on track for mass production in 2027. On M&A, Winbond announced in September an all-cash $1.12 billion acquisition of Infineon's NOR Flash and F-RAM business**, now under **antitrust review**, expected to close in **H2 2027**, after which the target will operate independently as **Spansion**. On **capex**, first-three-quarter capex was **NT$23.4 billion, with 2026 full-year estimated at NT$39.5 billion**, **95% for production equipment**. The board also approved a **NT$73.163 billion capex budget to expand the Kaohsiung 12-inch fab and buy core equipment, starting November 2026.
ICgoodFind Summary: Winbond's Q3 net profit up 1,103.5% with gross margin above 70% reflects DDR3 and DDR4 becoming scarce supply after major makers exited, with CMS ASP up nearly 60% in a quarter. But the limit-down stock shows memory-cycle-peak worries outweighing current results. Whether the GM's "tight through 2028" call holds depends on niche DRAM long-term contracts and the actual pace of 16nm capacity ramp.
