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.
(Logo: www.newscom.com/cgi-bin/prnh/20090727/SMICLOGO ) Second Quarter 2009 Highlights: -- Revenue up by 82.5% to $267.4 million from $146.5 million in 1Q09 and down by 22.0% compared to 2Q08. Specifically, advanced logic sales from 0.13 micron and 90 nanometer nodes have significantly increased by 135.3% quarter-over-quarter in the second quarter of 2009. -- Gross margins improved to -4.8% in 2Q09 compared to -88.3% in 1Q09 due to a significant increase in wafer shipments and fab utilization. -- Loss attributable to holders of ordinary shares of $98.1 million in 2Q09, compared to a loss of $178.3 million in 1Q09. -- Fully diluted EPS was ($0.2196) per ADS. Third 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 14% to 18% QoQ. -- Operating expenses excluding foreign exchange difference are expected to range from $90 million to $93 million. -- Capital expenditures expected to range from $60 million to $65 million. -- Depreciation and amortization expected to be around $199 million to $201 million.
Commenting on the quarterly results, Dr. Richard Chang, Chief Executive Officer of SMIC, remarked, "In the second quarter of 2009, we witnessed strong business recovery on all fronts. Total revenue increased 82.5% quarter-over-quarter, exceeding our originally stated guidance. Our utilization rate increased to 75% in the second quarter as our logic shipments increased by 102% quarter-over-quarter. Advanced logic revenue for 0.13-micron and below grew by more than 135% from the first quarter of 2009, increasing to 41% as a portion of total revenue from 32% in the first quarter. This significant recovery was driven largely by our customers' strong performances in the communications and consumer segments. Our book-to-bill ratio has been greater than one in the past five consecutive months and new tape outs in the second quarter reached a record high for the last six quarters and are up 58.5% from the first quarter of 2009, preliminarily indicating a sustained recovery.
"Second quarter recovery was fueled by recovered customer demand across all regions and robust end demand in Asian markets. Regionally, our Greater China revenue in the second quarter increased by 87.4%, and North America revenue increased by 85.3% quarter-over-quarter. We also saw a healthy increase in our Europe sales this quarter.
"In terms of advanced technology development, we have already commenced risk production on our 65nm low-power process in the beginning of the third quarter. In addition, our 45nm low-power technology qualification process is on schedule with products from multiple customers under development, and we plan to pass full-scale technology qualification by the fourth quarter of 2009. Moreover, we have achieved successful completion of our first 45nm high performance GP yield lot, enabling us to further serve our customers with competitive advanced technology. Moving forward, we are confident that our continual efforts to strengthen our technology and overall product mix will lead us to a better position for profitability.
"We have maintained a positive EBITDA margin throughout this global economic cyclical downturn. We have also continued to exercise tight control over capital expenditures and enhance our financial position. For the six-month period ended June 30, 2009, we have spent in total $44.9 million on capital expenditures while for the same period, we have generated $121.3 million net cash from operations. Our $190 million annual capital expenditure budget is unchanged. With tight discipline over capital expenditures, we forecast that total depreciation and amortization expense will decline around 13% year-on-year in 2010.
"As our customer orders remain strong, we see current momentum for recovery to continue in the third quarter with double-digit revenue growth over the second quarter of 2009. We remain vigilant on our cost controls and continue to focus on enhancing our product portfolio, and commit to strengthening our operational and financial performances on all fronts as we strive toward our goal of achieving profitability."
Conference Call / Webcast Announcement Date: July 29, 2009 Time: 8:00 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 second 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 (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) 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 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 concerning whether a sustained recovery in the economy has begun, SMIC's plan to pass full-scale technology qualification for our 45nm low-power process by the fourth quarter of 2009, SMIC's ability to strengthen our technology and overall product mix, SMIC's expectations regarding the amount of its capital expenditures in 2009, SMIC's forecasted decline in total depreciation and amortization expense year-on-year in 2010, current momentum for continued recovery in the third quarter with double-digit revenue growth, and statements under "Depreciation and Amortization", "Capex Summary" and "Third Quarter 2009 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 strengthen its technology and overall product mix, 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.