MILPITAS, Calif.—(BUSINESS WIRE)—Jan. 26, 2006— Chartered Semiconductor Manufacturing (Nasdaq: CHRT)(SGX-ST:CHARTERED):
-- Chartered revenues of $367.2 million in 4Q 2005, up 92.7
percent from 4Q 2004 and up 26.6 percent sequentially.
Revenues including Chartered's share of SMP of $399.4 million,
up 95.1 percent from 4Q 2004 and up 26.2 percent sequentially.
-- Net income of $26.5 million in 4Q 2005, compared to net loss
of $26.8 million in 4Q 2004, and a net loss of $34.5 million
in the previous quarter.
Chartered Semiconductor Manufacturing
CHRT)(SGX-ST:CHARTERED), one of the world's top dedicated
semiconductor foundries, today announced its results for fourth
quarter and year ended December 31, 2005.
"In fourth quarter, we posted record revenues at the Chartered
level as well as record revenues including our share of SMP, as we
capitalized on the growth in our leading-edge technologies and
favorable market conditions. Although 2005 started out disappointing
with the overhang of inventory correction in the semiconductor supply
chain and demand softness in certain end markets negatively impacting
our bottom line, our fundamentals were improving leading us to achieve
several key milestones by the end of the year. Revenues from the
90-nanometer (nm) technology node exceeded the $100 million mark in
fourth quarter 2005, contributing 28 percent of our total business
base revenues in just its second quarter of ramp. We were also able to
achieve our target to bring down our breakeven utilization to 75
percent in the fourth quarter, setting the path toward a sustainable
profitability model," said Chia Song Hwee, president & CEO of
Summary of Fourth Quarter 2005 Performance
-- Revenues were $367.2 million in fourth quarter 2005, up 92.7
percent from $190.6 million in fourth quarter 2004. Revenues
including Chartered's share of SMP were $399.4 million, up
95.1 percent from $204.7 million in the year-ago quarter, with
the largest dollar increase coming from the consumer sector,
followed by the computer and communications sectors.
Sequentially, revenues were up 26.6 percent compared to $290.1
million in third quarter 2005. Revenues including Chartered's
share of SMP were up 26.2 percent from $316.5 million in third
quarter 2005 primarily due to significant growth in the
consumer sector followed by the computer sector, partially
offset by a decline in the communications sector.
-- Gross profit was $88.0 million, or 24.0 percent of revenues,
up from a profit of $0.8 million, or 0.4 percent of revenues
in the year-ago quarter, primarily due to significantly higher
revenues. Gross profit was up 137.7 percent sequentially from
$37.0 million, or 12.8 percent of revenues in third quarter
2005, primarily due to higher revenues.
-- Research and development (R&D) expenses were $35.4 million, an
increase of 24.4 percent from the year-ago quarter, primarily
due to increased design services activities and higher
development activities related to the advanced 65nm technology
node, partially offset by the completed 0.13-micron technology
-- Pre-production fab start-up cost was nil in fourth quarter
2005 as Fab 7 started commercial production during second
quarter 2005. Pre-production fab start-up cost was $9.9
million in fourth quarter 2004.
-- Sales and marketing expenses were $10.2 million, up 13.8
percent compared to $8.9 million in the year-ago quarter,
primarily due to higher expenses related to the Electronic
Design Automation (EDA) offerings. Compared to the previous
quarter, sales and marketing expenses were down 10.7 percent
from $11.4 million, primarily due to lower financial support
for customer prototyping activities.
-- General and administrative (G&A) expenses were $9.7 million,
an increase of 20.6 percent compared to $8.0 million in the
year-ago quarter, primarily due to higher payroll-related
expenses and the effect of employee leave clearance in fourth
-- Other operating expense was nil in fourth quarter 2005
compared to an income of $10.0 million in the year-ago
quarter, which included a gain of $10.4 million resulting from
an equipment disposition with CSMC Technologies Corporation.
-- Equity in income (loss) of Chartered's minority-owned
joint-venture fab, SMP (Fab 5), was an income of $10.5 million
compared to a loss of $10.4 million in the year-ago quarter
and an income of $4.2 million in the previous quarter,
primarily due to higher revenues.
-- Other income was $1.9 million compared to $24.8 million in the
year-ago quarter. Other income in fourth quarter 2004 included
the recognition of a gain of $14.3 million related to the
Technology Transfer and License Agreement (TTLA) and the
Operational Assistance Agreement (OAA) with CSMC Technologies
Corporation and a training grant income of $8.4 million.
-- Net interest expense was $16.1 million, compared to a net
interest expense of $1.2 million in the year-ago quarter,
primarily due to higher interest expense resulting from higher
interest rates and higher outstanding debt and lower interest
capitalization associated with the ramp of Fab 7, partially
offset by higher interest income.
-- None of the losses in Chartered's consolidated joint-venture
fab, Chartered Silicon Partners (CSP or Fab 6), were allocated
to the minority interest in fourth quarter 2005. CSP's
financial position continued to be in capital deficit in
fourth quarter 2005; therefore, Chartered continued to
recognize 100 percent of the joint venture's results, which
was a loss of $16.3 million in the quarter. CSP's loss
decreased in fourth quarter 2005 compared to the previous
quarter primarily due to higher revenues and to a lesser
extent lower depreciation. At the end of fourth quarter 2005,
CSP's capital deficit was $395.2 million.
-- Net income was $26.5 million, or 7.2 percent of revenues,
compared to a net loss of $26.8 million, or negative 14.1
percent of revenues, in the year-ago quarter and a net loss of
$34.5 million or negative 11.9 percent of revenues in the