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.
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 December 31, 2009.
Fourth Quarter 2009 Highlights: -- Revenue up by 3.0% to $333.1 million in 4Q09 from $323.4 million in 3Q09 and up by 22.2% compared to 4Q08. -- Wafer revenue from Greater China region grew to 38.1% of total revenue in 4Q09. -- Gross margins improved to 10.6% in 4Q09 compared to 0.8% in 3Q09 primarily due to an increase in wafer shipments and fab utilization. -- Net cash flow from operations has increased substantially to $89.8 million in 4Q09 from $73.0 million in 3Q09. -- Charges in 4Q09 totaling $438.8 million recognized under operating and non-operating expense in 4Q09 of which $299.7 million is related to the settlement of litigation and $139.1 million is related to long-lived asset impairment. -- Loss attributable to holders of ordinary shares grew to US$482.3 million in 4Q09, compared to loss of US$69.3 million in 3Q09. -- Fully diluted EPS was ($1.0779) per ADS.
First Quarter 2010 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 range from flat to 2% increase. -- Operating expenses excluding foreign exchange differences are expected to range from $84 million to $88 million. -- Capital expenditures expected to range from $95 million to $100 million.
Commenting on the quarterly results, Dr. David N.K. Wang, Chief Executive Officer of SMIC remarked, "2010 looks to be a good year for the semiconductor industry. We believe it will also be an important step on our journey toward sustained profitability.
"Overall, revenue growth was in-line with expectations for fourth quarter of 2009, and the percentage of gross margin increased 10 fold over the previous quarter. This was due to an increase in our average selling price per wafer, total wafer shipments, and factory utilization. I am also pleased to announce that our Greater China sales, as a percentage of total revenue, continued to grow, and reached 38% of total revenue for the quarter. Of that, Mainland China sales reached 21% of total revenue, growing 7% quarter-over-quarter, and 23.6% year-over-year. Finally I was glad to see that in Q4 2009, revenue from advanced technology nodes of 0.13 micron and below grew by 12.9% quarter-over-quarter."
Conference Call / Webcast Announcement Date: February 10, 2010 Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-614-3672 / 1-800-260-8140 or HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2009 fourth quarter announcement will be available at http://www.smics.com under the "Investor Relations" section. An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.
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 . 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 concerning our belief that 2010 will be a good year for the semiconductor industry and an important step on our journey toward sustained profitability, and statements under "First Quarter 2010 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, the downturn in the global economy and the impact on China's economy, intense competition, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to capture growth opportunities in China, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, orders or judgments from pending litigation, 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 filed with the SEC on June 22, 2009, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited ("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.
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 30, 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 "2005 Settlement Agreement").
On August 25, 2006, TSMC filed a lawsuit against the Company and certain
subsidiaries (SMIC (Shanghai), SMIC (Beijing) and SMIC Americas) in the
Superior Court of the State of California, County of Alameda , for alleged
breach of the 2005 Settlement Agreement, alleged breach of promissory notes
related to the 2005 Settlement Agreement and alleged trade secret
misappropriation by the Company. The Company filed suit against TSMC in
Beijing in November 2006 , claiming unfair competition and commercial