Winbond Remains Cautious, Eyes Toshiba's Drastic Streamlining
August 31, 2001 (TAIPEI) -- Toshiba Corp.'s drastic slash of nearly 10 percent of its staff on Aug. 27 astonished global investors.
Winbond Electronics Corp., as a long time close technology-transfer partner of Toshiba, has been watching for "alarms" signaling the possibility of a relationship change with Toshiba, and keeping a close eye on related developments.
Toshiba's action of consolidating its DRAM production section to reduce huge losses, arising from the global DRAM price collapse, has been widely expected to threaten the DRAM processing cooperation with Winbond, one of Taiwan's leading DRAM producers.
Winbond, though remaining calm in appearance, is anxious to quickly judge the impact of Toshiba's move in the relationship between them as Toshiba shifts to engage in strategic relationship with Germany's Infineon AG in the DRAM production field.
In Toshiba's "01 action plan" announced Aug. 27, the company considered spinning off its DRAM department, which plans to merge with Infineon's memory section.
Since Winbond is now developing the new generation 0.11-micro wafer processing technique for 512MB products with Toshiba, Winbond is extremely concerned about the fortune of their cooperation.
At present, according to Winbond, it has been notified by Toshiba that related technology cooperation relationships will carry over to the newly formed company that will originate from the DRAM departments of Toshiba and Infineon. However, Winbond remains unclear about whether it will sign a new contract with Infineon for the cooperation.
Toshiba is rumored to have been considering such a move in early August, as its DRAM section continued to register huge losses. In the consolidation plan announcement, however, the company only confirmed that it will cut 20,000 jobs in Japan through attrition, spin-offs and voluntary early retirement, as the electronics giant expects a big operating loss in semiconductors for the year.
The move is expected to lead to a cut of DRAM production in Japan, but not its overseas DRAM production capacities or the original equipment manufacturing production projects.
According to Toshiba's consolidation plan, the company will focus on the research and development of flash and discrete products. As far as logic chips are concerned, it will continue to seek suitable OEM strategic partners for mass production to cut its cost.
For Winbond, until recently, orders of 9 million units of 64Mb DRAMs from Toshiba, slated to be produced in September and October, remain unchanged.
Some industry observers even forecast that Toshiba might lift its OEM DRAM orders from the current 30 percent of its demand to a high of 50 percent in the near term. However, judging from Toshiba's active moves to arrange DRAM OEM production in the Philippines and Shanghai, Winbond begin to worry that it will lose orders from Toshiba in low-end OEM DRAM products in the long run.
Winbond Electronics earlier announced sharply lower first-half revenue, because DRAM prices and flash memories have fallen at least 50 percent in the first half this year, sending most of the manufacturers into deficits from surpluses, and forcing some of them to phase out of the business.
Related link: Toshiba's release
Related story:
Taiwan's Chipmakers Won't Cut Production in Wake of Toshiba's Move
(Commcercial Times, Taiwan) |
