SMIC Reports 2007 First Quarter Results

* Net income of $8.8 million in 1Q07, compared to a net loss of $9.6 million in 1Q06 and net income of $0.1 million in the previous quarter.

SHANGHAI, China, April 26 /Xinhua-PRNewswire-FirstCall/ -- Semiconductor Manufacturing International Corporation (NYSE: SMI) ("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, 2007. Sales increased 1.2% in the first quarter of 2007 to $388.3 million from $383.8 million in the fourth quarter of 2006. The Company reported a decrease in capacity to 177,150 8-inch equivalent wafers per month and a utilization rate of 86.2% in the first quarter of 2007. Gross margins were 9.5% in the first quarter of 2007 compared to 5.1% in the fourth quarter of 2006. Net income of $8.8 million in the first quarter of 2007, compared to a net loss of $9.6 million in the first quarter of 2006 and a net income of $0.1 million in the fourth quarter of 2006.

"SMIC posted quarterly revenues of $388.3 million dollars during the first quarter of 2007," said Dr. Richard Chang, Chief Executive Officer of SMIC. "Gross profit increased to $36.9 million in 1Q07 up 89.2% QoQ from $19.5 million in 4Q06. Management fees from the Wuhan and Chengdu managed projects contributed to the revenue while demonstrating our ability to continue to grow our business".

Despite operating in a difficult business environment, SMIC was able to grow its revenues through several channels this quarter. We have seen several orders come back from major customers. During the quarter, we have seen significant growth in orders from the Chinese local design companies, which accounts for 12.8% of the revenue in 1Q07 as compared to 8.8% in 4Q06. We expect continued growth in the business from the Chinese local design companies for the rest of this year.

We will continue to focus on sustainable profitability and strategically identify opportunities to enhance shareholder value in the company. We are currently on track with our technology roadmap with 65nm technology development making good progress.

In the second quarter of 2007, we believe the steady development of advanced technology nodes for leading customers along with additional logic orders and revenue from our peripheral businesses positions SMIC for continual growth in 2007."

    Conference Call / Webcast Announcement

     Date: April 27, 2007
     Time: 10:00 a.m. Shanghai time
     Dial-in numbers and pass code: U.S. 1-617-597-5342 or HK 852-3002-1672
     (Pass code: SMIC).

A live webcast of the 2007 first quarter announcement will be available at 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) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in Mainland China, providing integrated circuit (IC) manufacturing service at 0.35mm to 90nm and finer line technologies. Headquartered in Shanghai, China, SMIC operates three 200mm fabs in Shanghai and one in Tianjin, and one 300mm fab in Beijing, the first of its kind in Mainland China. SMIC has customer service and marketing offices in the U.S., Italy, and Japan as well as a representative office in Hong Kong. For additional information, please visit .

Safe Harbor Statements

(Under the Private Securities Litigation Reform Act of 1995)

This press release may contain, 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 concerning SMIC's plans to develop its capabilities, build its China customer base and expand its capacity, anticipated decreases in depreciation expenses, the percentage of total wafer revenue expected to come from 90nm sales, SMIC's ability to grow and improve profitability in 2007, and statements under "Capex Summary" and "Second Quarter 2007 Guidance" 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 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 20-F, as amended, filed with the SEC on June 29, 2006, 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.

Material Litigation

Overview of TSMC Litigation:

Beginning in December 2003 through August 2004, the Company became subject to several lawsuits brought by Taiwan Semiconductor Manufacturing Company, Limited ("TSMC") relating to alleged infringement of certain patents and misappropriation of alleged trade secrets relating to methods for conducting semiconductor fab operations and manufacturing integrated circuits.

On January 31, 2005, the Company entered into a settlement agreement, without admission of liability, which provided for the dismissal of all pending legal actions without prejudice between the two companies (the "Settlement Agreement"). The terms of the Settlement Agreement also included:

    -- The Company and TSMC agreed to cross-license each other's patent
       portfolio for all semiconductor device products, effective from
       January 2005 through December 2010.

    -- TSMC covenanted not to sue the Company for trade secret
       misappropriation as alleged in TSMC's legal actions as it related to
       .15um and larger processes subject to certain conditions ("TSMC
       Covenant").  The TSMC Covenant did not cover .13um and smaller
       technologies after 6 months following execution of the Settlement
       Agreement (July, 31, 2005).  Excluding the .13um and smaller
       technologies, the TSMC Covenant remains in effect indefinitely,
       terminable upon a breach by the Company.

    -- The Company is required to deposit certain Company materials relating
       to .13um and smaller technologies into an escrow account until December
       31, 2006 or under certain circumstances for a longer period of time.

    -- The Company agreed to pay TSMC an aggregate  of  $175  million  in
              installments  of  $30  million  for  each  of  the  first  five  years  and  $25
              million  in  the  sixth  year.

        Accounting  under  the  Settlement  Agreement:

1 | 2 | 3 | 4  Next Page »


Review Article Be the first to review this article

Downstream : Solutuions for Post processing PCB Designs

Featured Video
Currently No Featured Jobs
Upcoming Events
CDNLive Japan 2018 at The Yokohama Bay Hotel Tokyu Yokohama Japan - Jul 20, 2018
MAPPS 2018 Summer Conference at The Belmond Charleston Place Charleston SC - Jul 22 - 25, 2018
International Test Conference India 2018 at Bangalore India - Jul 22 - 24, 2018
SRTC-2018 at The Leela Ambience Gurugram NEW DELHI India - Jul 25 - 26, 2018
DownStream: Solutions for Post Processing PCB Designs
TrueCircuits: IoTPLL

Internet Business Systems © 2018 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise