Winbond Electronics Corporation



4 Creation Road III, Science-Based Industrial Park
Hsinchu
Taiwan
Telephone: +886 3 577 0066
Fax: +886 2 2798 4382
Web site: http://www.winbond.com.tw

Public Company
Incorporated:
1987
Employees: 3,800
Sales: TWD 31.21 billion ($980.02 billion) (2004)
Stock Exchanges: Taiwan
Ticker Symbol: 2344
NAIC: 334413 Semiconductor and Related Device Manufacturing; 334412 Printed Circuit Board Manufacturing; 334111 Electronic Computer Manufacturing; 334210 Telephone Apparatus Manufacturing; 334220 Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing; 334310 Audio and Video Equipment Manufacturing

Winbond Electronics Corporation is one of Taiwan's leading developers and manufacturers of integrated semiconductor devices (ICs). The company operates primarily through two divisions: the Logic IC Business Group and the Memory IC Business Group. The latter represents the largest part of Winbond's business, with products including DRAMs, Flash Memory, and Pseudo SRAMs. Memory products accounted for nearly 70 percent of the group's sales of more than TWD 31 billion ($980 million) in 2004. The company's Logic IC group develops and manufactures IC products for various markets, such as consumer electronics (mobile camera phone chips, gaming consoles, mobile and wireless multimedia components, etc.), as well as ICs for TFT-LCD screens, computer mother-boards, and the like. Logic Products represented nearly 29 percent of Winbond's revenues in 2004. Asia, and especially the dominant Taiwanese electronics market, remains Winbond's primary market, accounting for more than 92 percent of the group's revenues. Winbond is also present in the United States and Europe, which accounted for just 4.75 percent and 3 percent of the group's 2004 sales, respectively. The company operates three fabs in Taiwan; the company expected to open a new fab by the end of 2005, which was expected to reach full production by 2006. Winbond is listed on the Taiwan Stock Exchange.

ERSO Offshoot in the 1980s

Taiwan targeted the electronics market as early as the mid-1960s, importing technology from the United States and Europe, with an early emphasis on the CMOS market. By the late 1970s, Taiwan had emerged as an important center for the world electronics market. Although the country had initially imported technology through a series of technology transfer agreements, it also established its own research and development expertise. This effort occurred in large part under the auspices of the Taiwanese government's Electronics Research Organization (ERSO), controlled by the Industrial Technology Research Institute (ITRI).

ERSO/ITRI served as a seedbed for much of Taiwan's electronics and semiconductor industry. In addition to providing financial and technical support for the industry, ERSO and ITRI also provided significant infrastructure support. Such was the case in 1980 with the construction of the Hsinchu Science-based Industrial Park. ERSO also created a number of important players in the market, such as Taiwan Semiconductor Manufacturing Corporation (TSMC) and United Microelectronics Corporation (UMC) both in the early 1980s.

Dr. Ding-yuan Yang was one of the founding members of ERSO, leading the group of engineers trained at RCA in the late 1970s. Back in Taiwan, Yang became responsible for setting up ERSO's demonstration laboratory, before becoming chief of the institution's computer development group. There, Yang led ERSO's entry into the specialized chipset market.

The growth of Taiwan's electronics market, and the success of TSMC, UMC, and other ERSO spinoffs, led Yang, and seven other engineers at ERSO, to decide to enter the private sphere as well. In 1987, Yang lined up an investor, Walsin Lihwa Corporation, and established Winbond Electronics Corporation. Unlike TSMC and UMC, the new company was not directly controlled by ERSO. Nonetheless, Winbond enjoyed strong support from ERSO, including the use of ERSO's original Hsinchu laboratory and the transfer of an additional team of 40 engineers. ERSO also sent Yang to study Business Administration at Stanford University. Of importance, Yang's relationship with ERSO and ITRI (he was later to be named as head of planning and marketing for ITRI) also enabled Winbond to start up its operations based on a license for ERSO's CMOS chip technology.

By the end of 1987, Winbond had established its first fab and had launched production of its first IC products. The company quickly expanded into building chipsets based on Intel's 286, then 386, and later, 486 microprocessors, becoming a major player in that all-important IC segment. By 1988, the company also had launched production of wafers. This enabled Winbond to expand into various specialty chipset markets, such as for video display controllers, as well as voice and other early multimedia ICs in 1989, and then add its first integrated circuit for the newly established LCD market in 1990.

Winbond began building its international sales market at that time as well. In 1990, the company established subsidiaries in the United States and in Hong Kong. Winbond also continued to develop its technology, emerging as one of the Asian IC indus-try's top innovators into the mid-1990s. Among the company's achievements during this time was the development (with ERSO) of the ISDN U-transceiver and, in partnership with Symphony, the one-micron CMOS 386 and 486 chipset families, both in 1991. By then, the company had entered the memory market, developing its first high-speed SRAM chips.

Technology Acquisitions in the 1990s

Into the mid-1990s, Winbond continued to step up its technology, achieving 0.8 micron production in 1992, then 0.6 micron in 1993. In 1994 the company became the first in Asia to develop a single-chip design MPEG video decoder IC. In that year, as well, Winbond launched production of 0.5 micron SRAMs. This effort was supported by the completion of the company's new Fab 2 in 1995. Also in that year, Winbond went public, listing on the Taiwan Stock Exchange.

The public offering enabled Winbond to begin planning a new phase of growth. The company entered a licensing agreement with Toshiba Corporation to design and produce a series of DRAM and high-speed SRAM chips for the Japanese electronics giant. Winbond also began construction of its third fab. Completed in May 1996, Fab 3 was subsequently destroyed by fire later that same year. Forced to rebuild, the company's next fab, Fab 4, launched pilot production—of Toshiba technology-based 64M DRAMs—by the end of 1997.

In the meantime, Winbond had continued to step up its technology, launching 0.4 micron IC production in 1998. By May of that year, the company had successfully completed a pilot run of 0.25 micron DRAMs as well. The company also launched a new part of its growth strategy in 1998, when it made its first acquisition, of California's Information Storage Devices. That company specialized in IC-based voice recording and playback devices. It also marked the début of Winbond's drive to add technology through acquisition.

Winbond's next acquisitions came in 1999, when it bought up Bright Micro Electronics, as well as Cirrus Logic's Thin Film Transistor operations, both located in the United States. Together with Information Storage Devices, the new acquisitions were merged into Winbond's U.S. subsidiary. Also that year, the company licensed new TFT-LCD driver and IC technology from Vivid Semiconductor.

The company then teamed up with Toshiba and Fujitsu to develop new 0.13 micron DRAM processing technology. The partnership also included an agreement for the joint development of a future 0.11 micron technology. In the meantime, Winbond continued to expand its facilities, opening a new Fab Automation & Facility Engineering Center in June 2000, followed by the completion of the group's Fab 5, and its first computer-integrated manufacturing system.

Company Perspectives:

The company's vision is to be the most successful "Mobile Electronics Solutions" provider in the world. To increase productivity and the fun in life for all people.

Key Dates:

1987:
Dr. Ding-yuan Yang, a founding member of Taiwan's ERSO, leaves the company to found Winbond Electronics Corporation and begins construction of Fab 1.
1989:
The company establishes its first foreign office in Hong Kong.
1990:
The company establishes a subsidiary in the United States.
1992:
Production is launched at Fab 2.
1994:
The company releases the first Asian-built single-chip MPEG video decoder.
1995:
The company's public offering is made on the Taiwan Stock Exchange.
1998:
The company acquires Information Storage Systems of California as part of a drive to acquire new technologies.
2001:
The company opens subsidiaries in Japan and Shanghai, China; 46 percent of NexFlash Technology Inc., based in California, is acquired.
2002:
The company signs a technology partnership agreement with Infineon Technologies AG.
2004:
The Infineon partnership is expanded and construction of a new 12-inch fab is launched.
2005:
The company acquires full control of NexFlash Technology.

Winbond added to its international sales and marketing force with the creation of two new subsidiaries in 2001, in Japan and in Shanghai, China. The new subsidiaries also expanded the group's research and development operations. The company next formed a partnership with Japan's Sharp Corporation for the development of new ACT1 Flash memory technology.

Memory Focus in the 2000s

By the mid-2000s, Winbond had begun to refocus itself on the memory market. By the middle of the decade, memory products formed nearly 70 percent of the company's sales. Most of the company's memory sales came from the DRAM category, supported by the establishment of a new Technology R&D Group in 2003. The new division consisted of a Memory Technology Center, dedicated to developing new DRAM technologies, and an Emerging Technology Center and a Novel Device Structure Center.

After Toshiba announced its decision to exit the DRAM market in the early 2000s, Winbond was forced to seek a new technology partner. The company found its new partner soon after it signed a first technology transfer agreement with Germany's Infineon Technology AG. After the successful development of a 0.11 micron process, the two companies signed a new agreement in 2004 to develop a 0.09 micron technology.

In support of this, Winbond launched construction of a new 12-inch fab at the end of 2004. Construction of the new facility was expected to be completed by the end of 2005. After completion of initial pilot production, the company hoped to launch full-scale production at the fab by 2006.

In the meantime, Winbond continued its shift toward a focus on the memory market. In 2001, the company had invested in the United States' NexFlash Technologies, based in Silicon Valley and specialized in the development of high-density flash memory technology. In June 2005, Winbond acquired full control of NexFlash, providing a complement to the company's own focus on low-density flash memory products. Winbond expected to remain a central player in the global IC market into the new century.

Principal Subsidiaries

Baystar Holding Ltd.; Goldbond LLC; Marketplace Management Ltd.; Mobile Magic Design Corporation; Newfound Asian Corporation; NexFlash Technologies, Inc. (52.35%); Peaceful River Corporation; Pigeon Creek Holding Co., Ltd.; Winbond Electronics Corporation America; Winbond Electronics Corporation Japan; Winbond Electronics (H.K.) Ltd.; Winbond Electronics (Shanghai) Ltd.; Winbond Int'l Corporation; Win Investment Corporation.

Principal Competitors

Taiwan Semiconductor Manufacturing Corporation; United Microelectronics Corporation.

Further Reading

Carroll, Mark, and David Lammers, "Winbond Rides MPEG Wave," Electronic Engineering Times, April 10, 1995, p. 29.

Clendenin, Mike, "Life After Toshiba," Electronic Engineering Times, December 26, 2001, p. 4.

Fuller, Douglas B., et al., "Leading, Following or Cooked Goose? Innovation Successes and Failures in Taiwan's Electronics Industry," Industry and Innovation, June 2003, p. 179.

Manners, David, "Blossoming into a Market Leader," Electronics Weekly, October 28, 1992, p. 17.

Murphy, Tom, "Full Stream Ahead for Taiwan Foundries: Only Winbond Derails Chipmaking Production," Electronic Business Asia, January 2002, p. 12.

"Winbond Electronics Corp. (Expansion)," Solid State Technology, November 2004, p. S16.

"Winbond Electronics Corp. (to Build a New Wafer Plant in Taiwan)," Solid State Technology, August 2003, p. 20.

"Winbond Stakes Out Europe," Electronic Buyers' News, November 27, 2000, p. 28.

—M.L. Cohen



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