HONG KONG, March 26 /PRNewswire-Asia/ -- Advanced Semiconductor Manufacturing Corporation Limited ("ASMC" or "the Company", HKEx: 3355), a leading foundry focusing primarily on the manufacturing of analog semiconductors and higher bipolar content-based mixed-signal semiconductors, announced its annual results for the year ended 31 December 2008.
Results Overview
For the year ended 31 December
2008 2007
RMB million RMB million
Revenue 932.6 1,183.1
Gross profit (22.4) (18.6)
Profit/ (loss) before income
tax (237.2) (832.2)
Net profit/ (loss) (237.1) (840.2)
Earnings/ (loss) per share (15.45)cents (54.76)cents
-- The Company's results were impacted by sharp declines in orders from
customers as a result of the global economic downturn
-- ASMC has implemented a number of key measures to maximize cost
efficiency across its operations to counter sluggish market conditions
-- Taking advantage of the Chinese government's plan to support the
domestic IT industry, ASMC is refocusing on increasing its share in
China's market
Operations Review
In 2008, the Company experienced unprecedented adverse market conditions which led to sharp declines in the demand for semiconductors as a result of the global economic downturn. Some of ASMC's customers have cut their orders aggressively and the Company's financial results were adversely affected.
In response to the worsening market situation, ASMC has implemented a number of measures to maximize cost efficiency across its operations. The Company has also strengthened its management team with the appointments of Mr. Zhou Weiping as the new President and CEO, and Dr. Wang Qingyu as Vice President of Operations. Under the leadership of the new management team, ASMC has moved forward a three-week shutdown of its internal operation for normal annual maintenance and reduced its workforce by 396 people to further enhance its overall cost efficiency.
Results Summary
Revenue for the year ended 31 December 2008 was RMB932.6 million, a decrease of 21.2% from RMB1,183.1 million in 2007. The decrease was due to weakened demand from customers which led to a lower overall utilization rate of 57% in 2008 compared to 66% in 2007. Its throughput of 8-inch equivalent wafers decreased by 19.3% to 383,301 pieces in 2008 from 474,686 pieces in 2007, while the 8-inch equivalent wafer shipment declined by 14.4% to 400,505 pieces.
Thanks to a range of effective cost control measures, the Company was able to narrow its net loss to RMB237.1 million for the year ended 31 December 2008 from a net loss of RMB840.2 million in 2007. Gross profit was negative RMB22.4 million in 2008 compared to negative RMB18.6 million in 2007, which was mainly attributable to a significant decrease in sales of both 6-inch and 8-inch wafers resulting from sharp falls in end-market demand.
In order to more accurately reflect the current status and fair value of the Company's 8-inch fabrication facilities ("the Assets"), and better help the Company's management to create a more competitive business model, the Company reviewed the carrying value of its 8-inch wafer assets in accordance with International Accounting Standard in its final accounts for the year ended 31 December 2008. Based on projections of anticipated future cash flow generated by the Assets, and of the cash flow estimates by the historical results of the Assets, an impairment charge of around RMB 145.1 million was recognized for the year ended 31 December 2008.
Future plans
To enhance its performance and position its business for long term growth, ASMC will strive to improve its overall efficiency and competitiveness by further implementing stringent cost control initiatives, and optimizing its production and operations activities. The measures include further reducing production costs and staff costs by streamlining and enhancing human resources structure and distribution system, as well as effective control of materials procurement and inventory.
To secure its core and critical business, ASMC will seek to create win-win partnerships with its customers by providing quality and customized manufacturing solutions to its customers, as well as jointly develop new business by deepening its strategic alliance with existing customers. Through the implementation of its international IDMs' fab-lite strategy, ASMC will be able to better capture technology transfer and qualification of high
value-added products opportunities.
Mr. Zhou Weiping, President and Chief Executive Officer of ASMC said, "Given the depressed state of the global economy and weakened end-market demand for semiconductors, 2009 is expected to be another challenging year for the Company. We will closely monitor the operating environment and adjust our business strategy accordingly. We are also refocusing our efforts on developing the domestic market to take advantage of the Chinese government's stated policy of supporting the domestic IT industry. ASMC is already one of the leaders in China's market and we hope to extend that lead further in the coming years."
"Our 6" wafer capacity expansion project with NXP has completed, providing us with sufficient production capacity to meet customer demand when there is a recovery in the market. Coupled with our stringent cost control measures, we believe ASMC will be able to enhance its competitiveness and attain sustainable growth once the global economy emerges from the current recession, "concluded Mr. Zhou.
About ASMC
ASMC was initially incorporated in October 1988 as a Sino-foreign equity joint venture, established exclusively to supply analog semiconductors to the Philips Group. On March 2nd, 2004, ASMC re-registered as a foreign invested joint stock company. On April 7th, 2006, ASMC was listed on the Main Board of The Stock Exchange of Hong Kong Limited.
ASMC operates two wafer fabrication facilities in Shanghai. One of them manufactures 5-inch and 6-inch wafers and the other 8-inch wafers. Major customers of ASMC include some of the world's leading integrated device manufacturers ("IDMs") and fabless semiconductor companies.
For further enquiries, please contact:
ASMC Media Relations
Jimmy Xiao
Tel: +86-21-6485-1900X 2387
Email: jimmy_xiao@asmc.com.cn
Hill and Knowlton Asia Ltd.
Rico Ngai
Tel: +852-2894-6204
Email: rico.ngai@hillandknowlton.com.hk
Crystal Yip
Tel: +852-2894-6211
Email: crystal.yip@hillandknowlton.com.hk
