Winbond Chairman: Memory Prices Have Peaked, AI Buildout Funded Through 2028

Winbond Electronics chairman Arthur Chiao said memory price increases have hit their limit and gross margins of 70%-80% at memory makers should not climb higher, because excessive prices hurt consumers and suppress phone and PC demand.

Chiao, speaking to reporters at a Winbond family day event, said AI data center construction planned by major cloud service providers for 2027 and 2028 is largely secured. Funding, land, power and infrastructure are almost all in place, he said. TechNews reported his comments on Nov. 7.

How firm is the AI data center pipeline?

Chiao said his talks with cloud customers show money for 2027 and 2028 is ready, whether from free cash flow or capital markets. For 2027 specifically, land development permits, power supply and plant construction are finished. Projects have moved into server installation. Neither a funding gap nor permit changes should slow them, he said.

Beyond that horizon, certainty drops sharply. Chiao expects funding limits to be the main cause of the next memory downturn, beginning in 2029. It remains unclear whether enough land, power and buildings will exist to sustain today's level of investment, he said. Cloud customers have not given clear plans past 2029. He plans to ask them directly during customer visits in 2027.

Why does Winbond want prices to stop rising?

Chiao rejected the idea that memory makers' margins could rise further. Asked whether the 70%-80% gross margins he cited could expand, he answered: "I don't think so." The ultimate limit, he said, is consumers running out of money.

"Memory prices and profits should not go any further at this stage," DigiTimes quoted him as saying. He warned that a market where memory thrives while other industries struggle is bad for consumers and the wider economy. MLQ.ai reported on Nov. 7 that memory makers are earning margins near 80% as AI servers absorb supply, pushing costs onto Apple and PC makers.

When does the cycle turn?

Chiao's bigger worry is that the downturn comes too late, not too early. He predicted two years ago that the current upcycle, which he dates from July 2025, would last two years. That puts its end around June 2027.

If strong conditions instead run into 2028 or 2029, companies will keep building fabs and could then face a correction lasting four years, which he said would hurt the industry far more than a normal downturn. His stance is more cautious than SK Hynix's forecast that AI memory demand will exceed supply through 2030.

What is Winbond itself building?

Winbond continues to add capacity despite the warning. Chiao said DRAM demand for 2027 and 2028 is fairly certain. The company's expansion, started in the second half of 2025, should add output in 2027. Growth will slow in 2028 as cleanroom space fills.

The company recently approved NT$73.1 billion for the second phase of its Kaohsiung fab. That phase is expected to contribute output in 2030. Chiao said it is meant for the next upcycle, not the current one.

On U.S. policy after the midterm elections, Chiao said a 3%-5% hit to AI data center construction would not be worrying. A 30%-50% hit would be. Nobody can yet say which outcome will materialize, he said.

Chiao's framing leaves the industry with a narrow window: two funded years of data center demand, a price ceiling he says is already reached, and a capacity race that turns destructive if the cycle overstays its predicted end around mid-2027.