Winbond Earnings Call: Q2 Profits Hit Record High with EPS of NT$5.4, Memory Gross Margin Surpasses 70%

Winbond Electronics (2344-TW) held its earnings conference today (6th). Benefiting from a substantial rise in memory prices, improved product mix, and sustained full capacity utilization, the company saw simultaneous growth in Q2 revenue, gross margin, and profitability. Quarterly net profit attributable to owners of the parent reached NT$24.317 billion, up 140.4% quarter-on-quarter and turning profitable year-on-year, setting a new historical high. Earnings per share (EPS) reached NT$5.4, with cumulative H1 EPS at NT$7.65.

Winbond’s consolidated revenue for Q2 was NT$59.843 billion, up 56.4% quarter-on-quarter and 184.7% year-on-year. Gross margin stood at 66.2%, up 12.8 percentage points quarter-on-quarter and 43.5 percentage points year-on-year. Operating margin was 48.4%, up 15.6 percentage points quarter-on-quarter and turned positive year-on-year. Net profit attributable to owners of the parent was NT$24.317 billion, turning profitable year-on-year and reaching a record high. EPS reached NT$5.4.

Excluding logic IC businesses such as Nuvoton, Winbond’s core memory business generated approximately NT$51.7 billion in Q2 revenue, up 72.8% quarter-on-quarter and 303.1% year-on-year. Gross margin for the memory segment reached 70.3%, up 13.9 percentage points quarter-on-quarter and 58.2 percentage points year-on-year. Operating margin was 56.9%, up 14.4 percentage points quarter-on-quarter and turned positive year-on-year. Capacity utilization reached 100%.

General Manager Chen Pei-ming noted that CMS revenue grew 78% quarter-on-quarter in Q2. Despite a roughly 10% sequential decline in bit shipments, the blended average selling price increased over 100% quarter-on-quarter, highlighting that price increases and supply strategy were key drivers behind DRAM revenue growth.

On the Flash side, Q2 revenue rose 65% quarter-on-quarter, with bit shipments increasing by approximately 15%–16%, primarily driven by a higher shipment mix of SLC NAND. The average selling price of SLC NAND increased by over 40% quarter-on-quarter, while NOR Flash prices remained largely flat.

By application, communications products performed the strongest, with Q2 revenue up 82% quarter-on-quarter, mainly driven by growing demand for DRAM and high-capacity NOR Flash in home routers, gateways, server switches, and network infrastructure.

Revenue from computer and server applications also approached nearly 90% quarter-on-quarter growth, primarily fueled by increasing demand for high-capacity NOR Flash in AI server racks. Product capacities typically start at 512Mb and include 1Gb and 2Gb products.