AI-driven demand for storage continues to expand, prompting Winbond Electronics to move ahead of schedule — customers are already reserving production capacity three years in advance.
The global niche memory IDM leader has announced an early start to its expansion plans for the Luzhu plant in Kaohsiung, Taiwan, consolidating the originally phased Phase 2 and Phase 3 projects into a single Module B facility for simultaneous development. According to industry reports, the cleanroom construction is slated to begin in 2027, with equipment installation expected as early as the start of 2029.
Industry insiders point out that Agentic AI is driving sustained growth in memory capacity and advanced packaging demand, with related growth trends expected to persist for an extended period. This is the direct reason behind Winbond Electronics' decision to accelerate the Module B initiative. Some customers have already begun negotiating capacity allocations for 2029 and 2030.
Quarterly Performance: Volume and Price Surge, Gross Margin Hits Record
Winbond Electronics reported consolidated revenue of NT$59.843 billion for the second quarter, up 56.4% quarter-over-quarter and 184.7% year-over-year.
Price increases are the core growth driver: DRAM prices rose approximately 100% during the quarter, while Flash prices climbed about 43%. Gross margin subsequently improved to 66.2%, with earnings per share (EPS) reaching NT$5.40.
Entering the third quarter, the upward momentum continues. According to industry sources, niche DRAM and SLC NAND are both experiencing supply shortages, with prices expected to rise approximately 50% quarter-over-quarter. NOR Flash prices are projected to increase around 30% quarter-over-quarter, fueled by aggressive stocking by major cloud service provider (CSP) customers.
While fourth-quarter price gains are expected to narrow to between 2% and 5%, analysts believe that Winbond Electronics will maintain sequential revenue and profit growth, supported by increased DRAM capacity and higher shipment volumes.
Module B: Product Portfolio Fully Aligned with AI
The product roadmap for Winbond Electronics' Module B facility in Kaohsiung covers Standard DRAM, CUBE DRAM, Wafer-on-Wafer (WoW), and Silicon Capacitors (Si-Cap), with support for 14nm and future 12nm DRAM processes. Plans also include the introduction of EUV equipment at a later stage.
The strategic logic is clear: AI is pushing memory toward higher density and more advanced packaging, requiring Winbond Electronics to secure process technology and capacity in advance to avoid falling behind when customer demand materializes.
Equipment deployment will proceed in phases based on customer forecasts and long-term agreements (LTAs) rather than ramping to full capacity at once, allowing the company to manage capital expenditure pacing effectively.
Si-Cap: The Third Growth Curve
Silicon capacitors (Si-Cap) deserve special attention within this expansion plan.
Industry observers view Si-Cap as a potential third growth engine for Winbond Electronics, complementing its existing Logic and Memory businesses. The company has invested approximately NT$4 billion to establish a dedicated Si-Cap production line.
Currently, mass-produced products achieve a capacitance density of roughly 3,300 nF/mm², while the latest samples have reached approximately 5,400 nF/mm². These components primarily target AI advanced packaging and AI power management applications. Reports suggest mass production could begin as early as the end of the first quarter of 2027.
The rationale behind Si-Cap is straightforward: AI chips demand exceptional power stability, and silicon capacitors provide higher-density power decoupling at the packaging level, making them an indispensable component in advanced packaging. By positioning itself early, Winbond Electronics aims to secure a foothold in this emerging demand segment.