Shanghai [2009-04-30]
All currency figures stated in this report are in US Dollars unless stated otherwise.
The financial statement amounts in this report are determined in accordance with US GAAP.
Shanghai, China ?C April 29, 2009. Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) (“SMIC” or the “Company”), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended March 31, 2009.
First Quarter 2009 Highlights:
§ Overall revenue decreased to $146.5 million in 1Q09, down by 46.2% QoQ from 4Q08 due to a 47.8% decrease in wafer shipments.
§ Gross margin was -88.3% in 1Q09 compared to -27.4% in 4Q08 due to a significant decline in wafer shipment and fab utilization.
§ The Company recorded a net loss of $178.4 million in 1Q09, compared to a net loss of $139.5 million in 4Q08.
§ Despite a sharp reduction in fab utilization, the Company generated $78 million of net cash from operating activities in 1Q09.
§ The Company has lined up new credit facilities totalling approximately $240 million.
§ Simplified ASP increased to $869 in 1Q09, up 3.1% QoQ from $843 in 4Q08 and up 8.9% YoY from $798 in 1Q08.
Second Quarter 2009 Guidance:
The following statements are forward looking statements which are based on current expectation and which involve risks and uncertainties, some of which are set forth under “Safe Harbor Statements” below.
§ Revenue is expected to increase 58% to 62%.
§ Operating expenses excluding foreign exchange difference are expected to range from $79 million to $83 million.
§ Capital expenditures are expected to range from $38 million to $43 million.
§ Depreciation and amortization are expected to range from $203 million to $206 million
Commenting on the quarterly results, Dr. Richard Chang, Chief Executive Officer of SMIC, remarked, “In the first quarter our revenue exceeded our previous guidance by 7.5%, and our quarterly ASP increased 8.9% year-over-year. Among the total wafer revenue, logic products contributed 96.9%. We also witnessed significant month-over-month increases on wafer orders and fab movements since Chinese New Year. The strong order recovery was driven in part by the replenishment of depleted inventory and also from increased demand in Chinese domestic consumption on wireless LAN, mobile phones, digital displays and other consumer electronics. Global customers continue to utilize SMIC’s strategic position to capture the China market, which has experienced faster recovery since the beginning of this year due to various domestic stimulus programs sponsored by the Chinese government. We expect our second quarter 2009 utilization rate to double compared to the first quarter.
From the advanced technology front, our 45nm low-power technology qualification progress is on-track and has shown qualification chip yield improvement. We completed licensed technology transfer from IBM on high-performance bulk-CMOS technology last quarter and process qualification is in progress in our Shanghai 300mm facility. Numerous customers are engaged in our lead-customer partnership and design-in activities, in parallel with SMIC’s silicon verification with IBM’s proven 45nm technologies. Furthermore, 65nm customer low-power product qualification is in its final stage. We are positioned to move into volume production in the third quarter of 2009.
In the first quarter, we have received strong orders reflecting recovering demand from 90nm and 130nm technology nodes. Furthermore, we see promising new tape-out activities in the first quarter, averaging more than one tape-out per day. We continue to forge more strategic alliances to better serve our customers; such as with Dolphin Integration for its ultra-low power digital-to-analog audio converters for the Portable Media Player market, and with FlipChip International for next-generation 300mm flip chip bumping and wafer level packaging. We remain committed to collaborating with global partners to enhance our product portfolio and service scope.
In the first quarter of 2009, we generated $78 million net cash from operating activities despite the challenging market conditions. In March 2009, we signed a memorandum on strategic cooperation with China Export-Import Bank (“China EXIM Bank”), under which China EXIM Bank intends to provide total credit facilities up to RMB 3 billion (US$438 million) to SMIC. As phase one of this cooperation, China EXIM Bank has already approved a $140 million 2-year credit facility to us. During the first quarter of 2009, the Company has lined up new credit facilities totalling approximately $240 million, which includes the $140 million credit facility referred to above. This has significantly strengthened our financial position.
Into the second quarter of 2009, we are encouraged by the increasing orders received. We anticipate approximately 60% quarter-over-quarter increase in revenue in the second quarter of 2009. We are hopeful that the worst is behind us, and we are working hard on all fronts to strengthen our operational and financial performance as the overall market continues to recover.”
About SMIC
Semiconductor Manufacturing International Corporation (“SMIC”; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in Mainland China, providing integrated circuit (IC) foundry and technology services at 0.35um to 45nm. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and three 200mm wafer fabs in its Shanghai mega-fab, two 300mm wafer fabs in its Beijing mega-fab, a 200mm wafer fab in Tianjin, a 200mm fab under construction in Shenzhen, and an in-house assembly and testing facility in Chengdu. SMIC also has customer service and marketing offices in the U.S., Europe, and Japan, and a representative office in Hong Kong. In addition, SMIC manages and operates a 200mm wafer fab in Chengdu owned by Cension Semiconductor Manufacturing Corporation and a 300mm wafer fab in Wuhan owned by Wuhan Xinxin Semiconductor Manufacturing Corporation.
For more information, please visit www.smics.com
Investor Contact:
En-Ling Feng
+86-21-3861-0000 ext.16275
Enling_Feng@smics.com
All currency figures stated in this report are in US Dollars unless stated otherwise.
The financial statement amounts in this report are determined in accordance with US GAAP.
Shanghai, China ?C April 29, 2009. Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) (“SMIC” or the “Company”), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended March 31, 2009.
First Quarter 2009 Highlights:
§ Overall revenue decreased to $146.5 million in 1Q09, down by 46.2% QoQ from 4Q08 due to a 47.8% decrease in wafer shipments.
§ Gross margin was -88.3% in 1Q09 compared to -27.4% in 4Q08 due to a significant decline in wafer shipment and fab utilization.
§ The Company recorded a net loss of $178.4 million in 1Q09, compared to a net loss of $139.5 million in 4Q08.
§ Despite a sharp reduction in fab utilization, the Company generated $78 million of net cash from operating activities in 1Q09.
§ The Company has lined up new credit facilities totalling approximately $240 million.
§ Simplified ASP increased to $869 in 1Q09, up 3.1% QoQ from $843 in 4Q08 and up 8.9% YoY from $798 in 1Q08.
Second Quarter 2009 Guidance:
The following statements are forward looking statements which are based on current expectation and which involve risks and uncertainties, some of which are set forth under “Safe Harbor Statements” below.
§ Revenue is expected to increase 58% to 62%.
§ Operating expenses excluding foreign exchange difference are expected to range from $79 million to $83 million.
§ Capital expenditures are expected to range from $38 million to $43 million.
§ Depreciation and amortization are expected to range from $203 million to $206 million
Commenting on the quarterly results, Dr. Richard Chang, Chief Executive Officer of SMIC, remarked, “In the first quarter our revenue exceeded our previous guidance by 7.5%, and our quarterly ASP increased 8.9% year-over-year. Among the total wafer revenue, logic products contributed 96.9%. We also witnessed significant month-over-month increases on wafer orders and fab movements since Chinese New Year. The strong order recovery was driven in part by the replenishment of depleted inventory and also from increased demand in Chinese domestic consumption on wireless LAN, mobile phones, digital displays and other consumer electronics. Global customers continue to utilize SMIC’s strategic position to capture the China market, which has experienced faster recovery since the beginning of this year due to various domestic stimulus programs sponsored by the Chinese government. We expect our second quarter 2009 utilization rate to double compared to the first quarter.
From the advanced technology front, our 45nm low-power technology qualification progress is on-track and has shown qualification chip yield improvement. We completed licensed technology transfer from IBM on high-performance bulk-CMOS technology last quarter and process qualification is in progress in our Shanghai 300mm facility. Numerous customers are engaged in our lead-customer partnership and design-in activities, in parallel with SMIC’s silicon verification with IBM’s proven 45nm technologies. Furthermore, 65nm customer low-power product qualification is in its final stage. We are positioned to move into volume production in the third quarter of 2009.
In the first quarter, we have received strong orders reflecting recovering demand from 90nm and 130nm technology nodes. Furthermore, we see promising new tape-out activities in the first quarter, averaging more than one tape-out per day. We continue to forge more strategic alliances to better serve our customers; such as with Dolphin Integration for its ultra-low power digital-to-analog audio converters for the Portable Media Player market, and with FlipChip International for next-generation 300mm flip chip bumping and wafer level packaging. We remain committed to collaborating with global partners to enhance our product portfolio and service scope.
In the first quarter of 2009, we generated $78 million net cash from operating activities despite the challenging market conditions. In March 2009, we signed a memorandum on strategic cooperation with China Export-Import Bank (“China EXIM Bank”), under which China EXIM Bank intends to provide total credit facilities up to RMB 3 billion (US$438 million) to SMIC. As phase one of this cooperation, China EXIM Bank has already approved a $140 million 2-year credit facility to us. During the first quarter of 2009, the Company has lined up new credit facilities totalling approximately $240 million, which includes the $140 million credit facility referred to above. This has significantly strengthened our financial position.
Into the second quarter of 2009, we are encouraged by the increasing orders received. We anticipate approximately 60% quarter-over-quarter increase in revenue in the second quarter of 2009. We are hopeful that the worst is behind us, and we are working hard on all fronts to strengthen our operational and financial performance as the overall market continues to recover.”
About SMIC
Semiconductor Manufacturing International Corporation (“SMIC”; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in Mainland China, providing integrated circuit (IC) foundry and technology services at 0.35um to 45nm. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and three 200mm wafer fabs in its Shanghai mega-fab, two 300mm wafer fabs in its Beijing mega-fab, a 200mm wafer fab in Tianjin, a 200mm fab under construction in Shenzhen, and an in-house assembly and testing facility in Chengdu. SMIC also has customer service and marketing offices in the U.S., Europe, and Japan, and a representative office in Hong Kong. In addition, SMIC manages and operates a 200mm wafer fab in Chengdu owned by Cension Semiconductor Manufacturing Corporation and a 300mm wafer fab in Wuhan owned by Wuhan Xinxin Semiconductor Manufacturing Corporation.
For more information, please visit www.smics.com
Investor Contact:
En-Ling Feng
+86-21-3861-0000 ext.16275
Enling_Feng@smics.com
