Shanghai, China [2005-10-28]
Shanghai, China - October 28, 2005. Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company") today announced its consolidated results of operations for the three months ended September 30, 2005. Sales increased 10.9% in the third quarter of 2005 to $310.0 million from $279.5 million in the prior quarter. The Company reported an increase in capacity to 143,188 8-inch equivalent wafers per month and an increase in utilization rate to 92% in the third quarter of 2005 compared to 82% in the second quarter of 2005. Gross margins were 8.2% in the third quarter of 2005 compared to 2.3% in the second quarter of 2005. Net loss decreased to $26.1 million in the third quarter of 2005 compared to a net loss of $40.4 million in the second quarter of 2005.
"As we continued to focus on the execution of our business plan we saw strong orders from our customers across leading edge and mainstream technology nodes during the third quarter," said Dr. Richard Chang, President and Chief Executive Officer of SMIC. "We increased the contribution from our high-end processes deriving more than 90% of our revenues from 0.18um and below technology for the first time.
Our business continues to generate strong cash flows from operations with approximately $500 million year to date. At the end of third quarter, we had over $577 million of cash on hand and available credit facilities of over $700 million, which will enable us to continue investing in advanced technology development and equipment to serve our customers.
During this quarter, we have added one of the top five fabless customers in the world to our customer base and have engaged with another top five fabless company. We are expanding our presence in the computer application segment and hope to extend our partnership with these leading semiconductor companies to more advanced technology nodes. We've taped out 25 new products, with over one third of the new tape out products coming from Mainland Chinese customers and one third of those at the 0.13um technology node. As we continue to focus on the Mainland Chinese IC industry, we have successfully manufactured the world's first working 0.13um TD-SCDMA chip for Chongqing Chongyou Information Technology Co., Ltd.
I am pleased to report that our research and development team has made progress in the execution of our 90nm technology roadmap. Our qualification lot yields have exceeded the targets set by our customer and are comparable to the industry average. We expect to commence pilot production by the end of the fourth quarter and commercial production shortly thereafter. We will also use our 90nm logic process with the technology licensed from Saifun Semiconductors to manufacture a 2-gigabit NAND flash product. We have also entered into a definitive agreement with Elpida to migrate our customer's capacity from 100nm to the 90nm process at Fab 4 in Beijing.
Further down the technology roadmap, we have recently entered into an agreement with a customer to co-develop our 65nm process to deliver engineering samples by the end of 2006.
Our testing and assembly project in Chengdu is on schedule to begin pilot production during the fourth quarter, which will allow us to offer in-house turn-key manufacturing services in China. In addition, with the shortage of assembly house capacity for memory and flip-chip logic products, we are eager to commence commercial production to serve our customers.
We will continue to focus on our business fundamentals and are committed to delivering shareholder value to our investor community."
Conference call / Webcast announcement details
Date: October 28, 2005
Time: 8:00 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-224-4324 or HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2005 third quarter announcement will be available at http://www.smics.com under the "Investor Relations" section. An archived version of the webcast, along with a soft copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.
About SMIC
SMIC (NYSE: SMI, SEHK: 0981.HK) is one of the leading semiconductor foundries in the world, providing integrated circuit manufacturing at 0.35-micron to 0.11-micron and finer line technologies to customers worldwide. Established in 2000, SMIC has four 8-inch wafer fabrication facilities in volume production in Shanghai and Tianjin. In the first quarter of 2005, SMIC commenced commercial production at its 12-inch wafer fabrication facility in Beijing. SMIC also maintains customer service and marketing offices in the U.S., Europe, and Japan, and a representative office in Hong Kong. As part of its dedication towards providing high-quality services, SMIC has achieved ISO9001, ISO/TS16949, OHSAS18001, TL9000, BS7799 and ISO14001 certifications. For additional information, please visit http://www.smics.com.
Safe Harbor Statements
(Under the Private Securities Litigation Reform Act of 1995)
This press release contains, in addition to historical information, "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements about SMIC's anticipated product development, product introduction and future performance, such as statements regarding future investment in ramping up capacity at SMIC's Tianjin fab, the achievement of commercial or pilot production for SMIC's projects and the increase in revenue from these projects, as well as the statements under "4Q05 Outlook" below, are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of SMIC's senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements, including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, intense competition, timely wafer acceptance by SMIC's customers, timely and successful introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity and financial stability in end markets.
Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its annual report on Form 20-F filed with the SEC on June 28, 2005, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, and its registration statement on Form A-1 as filed with the Stock Exchange of Hong Kong (SEHK) on March 8, 2004, and such other documents that SMIC may file with the SEC or SEHK from time to time, including on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release.
Except as required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Investor Contacts:
Jimmy Lai
Investor Relations Department
Tel: 86-21-5080-2000, ext. 16088
Fax: 86-21-5080-3619
Calvin Lau
Investor Relations Department
Tel: 86-21-5080-2000, ext. 16693
Fax: 86-21-5080-3619
SMIC Q3 earnings release
Shanghai, China - October 28, 2005. Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company") today announced its consolidated results of operations for the three months ended September 30, 2005. Sales increased 10.9% in the third quarter of 2005 to $310.0 million from $279.5 million in the prior quarter. The Company reported an increase in capacity to 143,188 8-inch equivalent wafers per month and an increase in utilization rate to 92% in the third quarter of 2005 compared to 82% in the second quarter of 2005. Gross margins were 8.2% in the third quarter of 2005 compared to 2.3% in the second quarter of 2005. Net loss decreased to $26.1 million in the third quarter of 2005 compared to a net loss of $40.4 million in the second quarter of 2005.
"As we continued to focus on the execution of our business plan we saw strong orders from our customers across leading edge and mainstream technology nodes during the third quarter," said Dr. Richard Chang, President and Chief Executive Officer of SMIC. "We increased the contribution from our high-end processes deriving more than 90% of our revenues from 0.18um and below technology for the first time.
Our business continues to generate strong cash flows from operations with approximately $500 million year to date. At the end of third quarter, we had over $577 million of cash on hand and available credit facilities of over $700 million, which will enable us to continue investing in advanced technology development and equipment to serve our customers.
During this quarter, we have added one of the top five fabless customers in the world to our customer base and have engaged with another top five fabless company. We are expanding our presence in the computer application segment and hope to extend our partnership with these leading semiconductor companies to more advanced technology nodes. We've taped out 25 new products, with over one third of the new tape out products coming from Mainland Chinese customers and one third of those at the 0.13um technology node. As we continue to focus on the Mainland Chinese IC industry, we have successfully manufactured the world's first working 0.13um TD-SCDMA chip for Chongqing Chongyou Information Technology Co., Ltd.
I am pleased to report that our research and development team has made progress in the execution of our 90nm technology roadmap. Our qualification lot yields have exceeded the targets set by our customer and are comparable to the industry average. We expect to commence pilot production by the end of the fourth quarter and commercial production shortly thereafter. We will also use our 90nm logic process with the technology licensed from Saifun Semiconductors to manufacture a 2-gigabit NAND flash product. We have also entered into a definitive agreement with Elpida to migrate our customer's capacity from 100nm to the 90nm process at Fab 4 in Beijing.
Further down the technology roadmap, we have recently entered into an agreement with a customer to co-develop our 65nm process to deliver engineering samples by the end of 2006.
Our testing and assembly project in Chengdu is on schedule to begin pilot production during the fourth quarter, which will allow us to offer in-house turn-key manufacturing services in China. In addition, with the shortage of assembly house capacity for memory and flip-chip logic products, we are eager to commence commercial production to serve our customers.
We will continue to focus on our business fundamentals and are committed to delivering shareholder value to our investor community."
Conference call / Webcast announcement details
Date: October 28, 2005
Time: 8:00 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-224-4324 or HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2005 third quarter announcement will be available at http://www.smics.com under the "Investor Relations" section. An archived version of the webcast, along with a soft copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.
About SMIC
SMIC (NYSE: SMI, SEHK: 0981.HK) is one of the leading semiconductor foundries in the world, providing integrated circuit manufacturing at 0.35-micron to 0.11-micron and finer line technologies to customers worldwide. Established in 2000, SMIC has four 8-inch wafer fabrication facilities in volume production in Shanghai and Tianjin. In the first quarter of 2005, SMIC commenced commercial production at its 12-inch wafer fabrication facility in Beijing. SMIC also maintains customer service and marketing offices in the U.S., Europe, and Japan, and a representative office in Hong Kong. As part of its dedication towards providing high-quality services, SMIC has achieved ISO9001, ISO/TS16949, OHSAS18001, TL9000, BS7799 and ISO14001 certifications. For additional information, please visit http://www.smics.com.
Safe Harbor Statements
(Under the Private Securities Litigation Reform Act of 1995)
This press release contains, in addition to historical information, "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements about SMIC's anticipated product development, product introduction and future performance, such as statements regarding future investment in ramping up capacity at SMIC's Tianjin fab, the achievement of commercial or pilot production for SMIC's projects and the increase in revenue from these projects, as well as the statements under "4Q05 Outlook" below, are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of SMIC's senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements, including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, intense competition, timely wafer acceptance by SMIC's customers, timely and successful introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity and financial stability in end markets.
Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its annual report on Form 20-F filed with the SEC on June 28, 2005, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, and its registration statement on Form A-1 as filed with the Stock Exchange of Hong Kong (SEHK) on March 8, 2004, and such other documents that SMIC may file with the SEC or SEHK from time to time, including on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release.
Except as required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Investor Contacts:
Jimmy Lai
Investor Relations Department
Tel: 86-21-5080-2000, ext. 16088
Fax: 86-21-5080-3619
Calvin Lau
Investor Relations Department
Tel: 86-21-5080-2000, ext. 16693
Fax: 86-21-5080-3619
SMIC Q3 earnings release
