SMIC Reports 2017 First Quarter Results

SHANGHAI, May 10, 2017 — (PRNewswire) —  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, 2017.

First Quarter 2017 Highlights

  • Revenue was $793.1 million in 1Q17, a decrease of 2.7% QoQ from $814.8 million in 4Q16 and an increase of 25.0% YoY from $634.3 million in 1Q16.
  • Gross profit was $220.8 million in 1Q17, compared to $246.0 million in 4Q16 and $153.8 million in 1Q16.
  • Gross margin was 27.8% in 1Q17, compared to 30.2% in 4Q16 and 24.2% in 1Q16.
  • Net profit for the period attributable to SMIC was $69.8 million in 1Q17, as compared to $104.0 million in 4Q16 and $61.4 million in 1Q16.

Second Quarter 2017 Guidance: 

The following statements are forward looking statements based on current expectations and involved risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below. The Company expects:

  • Revenue to decline by 3% to 6% QoQ.
  • Gross margin to range from 25% to 27%.
  • Non-GAAP operating expenses, excluding the effect of employee bonus accrual, government funding and gain from the disposal of living quarters, to range from $178 million to $184 million.
  • Non-controlling interests of our majority-owned subsidiaries to range from positive $6 million to positive $8 million (losses to be borne by non-controlling interests).

Dr. Haijun Zhao, SMIC's Chief Executive Officer, commented, "Our team delivered a good quarter with year-on-year growth, improved operating income, and strong EBITDA in Q1 2017. Revenue grew 25.0% year over year, representing a sequential decline of 2.7%. Operating profit grew 17.0% YoY and 57.9% QoQ. EBITDA was a record high of $312.4 million, an increase of 42.8% YoY and 13.9% QoQ and representing an EBITDA margin of 39.4%.

In the first half of 2017, we are confronting the challenges of customer changes in market positioning, seasonal inventory adjustments, and overall muted handset market growth in China; however, we have actively pursued new incremental revenue from a variety of customers and markets to mitigate the impact of such headwinds. We believe we are in a great position, both strategically and financially to weather this cyclical downturn and are positioned to benefit from some exciting future trends, including automotive, industrial, internet of things, and others.

Our 28nm is ramping up and reached 5.0% of wafer revenue in Q1, representing a growth of 39.0% QoQ. We continue to work with our customers on 28nm new tape outs for a diverse set of applications. 55nm wafer revenue sequentially grew 29.1% YoY and 9.1% QoQ. We continue to ramp 28nm, 55nm and numerous products on 8-inch; and from a device-perspective, we are pursuing growth in areas in which we are seeing meaningful demand such as NOR flash, RF/connectivity, Power IC, and others."

For the complete version of SMIC's 2017 First Quarter results including financial tables, please see: http://www.smics.com/eng/investors/ir_filings.php

Conference Call / Webcast Announcement

Date: May 11, 2017
Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code:

China

+86 400-620-8038

(Pass code: SMIC)

Hong Kong

+852 3018-6771

(Pass code: SMIC)

Taiwan

+886 2-2650-7825

(Pass code: SMIC)

United States, New York

+1 845-675-0437

(Pass code: SMIC)

The call will be webcast live with audio at http://www.smics.com/eng/investors/ir_presentations.php or http://edge.media-server.com/m/p/z3d2exzc.

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.

SMIC has filed with the U.S. Securities and Exchange Commission its annual report on Form 20-F for the year ended December 31, 2016. The annual report is available on our website at www.smics.com. In addition, all SMIC ADR holders have the ability, upon request, to receive a hard copy of our complete audited financials free of charge.

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. SMIC provides integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 28 nanometer. Headquartered in Shanghai, China, SMIC has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm fab in Shanghai; a 300mm fab and a majority-owned 300mm fab for advanced nodes in Beijing; 200mm fabs in Tianjin and Shenzhen; and a majority-owned joint-venture 300mm bumping facility in Jiangyin; additionally, in Italy SMIC has a majority-owned 200mm fab. SMIC also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.

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 under "Second Quarter 2017 Guidance", "CapEx Summary" and the statements contained in the quotes of our CEO are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project," "target" 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 in the semiconductor industry, SMIC's reliance on a small number of customers, 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, financial stability in end markets, orders or judgments from pending litigation, intensive intellectual property litigation in semiconductor industry, general economic conditions and fluctuations in currency exchange rates.


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