WinWay Technology, a provider of IC test interface solutions, has seen strong demand for high-end AI and HPC-related chips and expects flat or slight revenue growth this year.
The recent hype generated by ChatGPT chatbot has again directed much attention on the development of artificial intelligence (AI). The use of high-end HPC chips in AI applications has boosted the confidence of WinWay and others that provide HPC IC test interface solutions despite the economic headwinds, the sources said.
They will strive to keep sales stable in 2023, and expect high growths to come in 2024-2025, the sources said.
WinWay vice president Jason Chen noted that demand will remain weak in the entry-level to midrange consumer electronics end market segments in 2023, but HPC IC test interface solutions will continue to see growth. WinWay has many first-tier HPC chip vendors among its clients, said Chen.
In 2023, demand for system-level-test (SLT) interfaces supporting AI and HPC chips -- such as coaxial sockets -- will remain strong. WinWay has a low proportion of orders from the handset segment, which means the company is less affected by the fluctuations in the economy.
WinWay's coaxial socket product line accounts for about 37% of company sales, and thanks to HPC and chatbot applications, high-speed/high frequency technology will continue to be the focus of future development. Market observers expect coaxial sockets to account for as much as 50% of WinWay's sales in 2023.
Chen said first-tier IC design houses have not slowed down their pace of R&D. In 2022, clients used 7nm and below nodes to make 60-70% their products, and the proportion may rise in 2023.
Fab costs for using 7nm manufacturing nodes may become more acceptable for chip vendors and in the next two years, and 7nm node and even 5nm may become mainstream.
SLT for high-end chips requires much more IC sockets. It may take a few second to process a chip on automated test equipment, but SLT may need more than 10 minutes, requiring much more IC sockets, industry sources said.
Previously WinWay had to outsource some business as a result of in-house capacity shortage amid strong demand. But the current market downturn has prompted WinWay to stop most of the outsourcing. Its new plant in Kaohsiung, southern Taiwan will be completed in May or June 2023, which means the company will have more in-house capacity, with production cost expected to decline by more than 10%.
High-end chip testing has also driven demand for burn-in test interfaces, the sources said. Although the gross margin of burn-in test interfaces is not as high as that of coaxial sockets, there is strong momentum for the segment in terms of volume.
For burn-in test interfaces, WinWay is expected to team up with KYEC who has substantial burn-in oven capacity, the sources said. KYEC has been a major player in the burn-in oven segment, with top vendors being among its US CPU and power semiconductor devices clients.
WinWay reported NT$5.12 billion (US$168.67 million) in revenue for 2022, rising 77.4% year-on-year. Its gross profit margin came to 45.33% for the year, with net profit arriving at NT$1.1 billion. The revenue and profit were both the highest ever for the company.
WinWay's January 2023 revenue grew 35.57% year-on-year to reach NT$426 million, also the highest ever for the same month.
Article translated by Rodney Chan
