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.
SHANGHAI, China, Oct. 29 /Xinhua-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 September 30, 2008.
Third Quarter 2008 Highlights:
-- Overall revenue increased to $375.9 million in 3Q08, up 9.6% from 2Q08.
Specifically, advanced logic sales from 0.13 micron and 90 nanometer
technology nodes have increased by 23.3% in 3Q08 quarter-on-quarter.
-- Simplified average selling price ("ASP") increased by 2.1% from $853 in
2Q08 to $871 in 3Q08.
-- Gross margin improved to 7.2% in 3Q08 compared to 6.1% in 2Q08.
-- The Company reduced net loss to $30.3 million in 3Q08 as compared to
the net loss of $45.6 million in 2Q08.
Commenting on the quarterly results, Dr. Richard Chang, Chief Executive Officer of SMIC remarked, "In terms of the third quarter performance, I am pleased to see a 9.6% quarter-over-quarter increase in the total revenue. The revenue growth is primarily due to higher logic demand as well as higher ASP from change in product mix. Our total logic wafer shipments in the third quarter increased 9.9% quarter-over-quarter and logic sales accounted for 87.4% of our total revenue in the third quarter. In terms of customers, revenue contribution from fabless customers increased by 10.5%
quarter-over-quarter and 16.2% year-over-year. In terms of applications, we have experienced stronger sales in the communications sector, resulting in a 13.9% quarter-over-quarter increase in third quarter. In addition, sales in consumer applications also increased by 10.9% in the third quarter. DRAM as a percentage of our total revenue continued to decline to 2.4% in the third quarter. As a result of the depreciation and amortization expense of $198 million, we recorded a net loss of $30.3 million. Depreciation and amortization expense as a percentage of revenue decreased by 5% against the previous quarter. Moreover, starting 2009, the depreciation expense of our Shanghai 200mm facilities will drop to almost half within two years, which will further improve our bottom line. Our EBITDA margin improved from 42.5% in the second quarter to 45.5% in the third quarter.
During the third quarter, we continued to make progress in our key strategic initiatives. First, the conversion of DRAM capacity into logic is still on track with estimated completion by the end of this year. We expect that, once completed, our Beijing 300mm logic capacity at 2008 year-end will have increased more than 50% since the beginning of 2008.
In terms of our advanced technology node development, I am pleased to announce that SMIC has received all needed export licenses to enter into 32nm research and development in both logic and flash, starting January 1, 2009. In terms of our 65nm technology development, more than 20 products have already taped-out and are qualifying in different stages. Our 45nm collaboration with IBM is on schedule in accordance to plan, and we expect to qualify the technology and begin risk production in the second half of 2009.
We are pleased to see our Chinese customers making strong progress and advancing their technology nodes. Our China shipment quantity grew 28% in the third quarter, and our greater China revenue contributed to 31% of our overall revenue in the third quarter. As we have announced previously, as a result of technology collaboration with us, one of our Chinese customers successfully introduced the demodulator chip for China's high-definition TV application. This was the first and the most comprehensive chip solution on the Chinese DTV market. In addition, another Chinese customer introduced mobile TV solutions based on the China Multimedia Mobile Broadcasting (CMMB) standard. CMMB was initiated by the Chinese government and now covers 37 cities. China has also recently begun building the infrastructure for the fully commercialized use of the TD-SCDMA network. Chinese customers are working together with SMIC to produce TD-SCDMA chips. TD-SCDMA has been under pilot testing and currently covers 10 cities in China, and is expected to expand to another 28 cities in the near future. Moving forward, we intend to continue to strengthen our geographical focus in domestic China by collaborating with local fabless design houses.
Under the current business environment, we are working hard to tightly control costs and intend to hold back any capacity expansion until we have clear visibility of end-customer demand."
Conference Call / Webcast Announcement
Date: October 30, 2008
Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-597-5342 or HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2008 third 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.
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, providing integrated circuit (IC) manufacturing service at 0.35um to 65nm and finer line technologies. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) under pilot production 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 and a 300mm 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 estimated completion of our conversion of DRAM capacity into logic by the end of this year, percentage increase in our Beijing 300-mm logic capacity by the end of 2008, the expected timing for qualifying our technology and risk production in connection with our 45nm collaboration with IBM, the expected expansion of
TD-SCDMA to another 28 cities in the near future, future collaborations with local fabless design houses, our intention to hold back on capacity expansion, our expectation for fourth quarter 2008 revenue, and statements under "Capex Summary" and "Fourth Quarter 2008 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 current global financial crisis, intense competition, 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, 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, as amended, filed with the SEC on June 27, 2008, 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 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.
Material Litigation
Recent TSMC Legal Developments:
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 Settlement Agreement, alleged breach of promissory notes and alleged trade secret misappropriation by the Company. TSMC seeks, among other things, damages, injunctive relief, attorneys' fees, and the acceleration of the remaining payments outstanding under the Settlement Agreement.
In the present litigation, TSMC alleges that the Company has incorporated TSMC trade secrets in the manufacture of the Company's 0.13 micron or smaller process products. TSMC further alleges that as a result of this claimed breach, TSMC's patent license is terminated and the covenant not to sue is no longer in effect with respect to the Company's larger process products.
The Company has vigorously denied all allegations of misappropriation. The Court has made no finding that TSMC's claims are valid, nor has it set a trial date.
On September 13, 2006, the Company announced that in addition to filing a response strongly denying the allegations of TSMC in the United States lawsuit, it filed on September 12, 2006, a cross- complaint against TSMC seeking, among other things, damages for TSMC's breach of contract and breach of implied covenant of good faith and fair dealing.
On November 16, 2006, the High Court in Beijing, the People's Republic of China, accepted the filing of a complaint by the Company and its wholly-owned subsidiaries, SMIC (Shanghai) and SMIC (Beijing), regarding the unfair competition arising from the breach of bona fide (i.e. integrity, good faith) principle and commercial defamation by TSMC ("PRC Complaint"). In the PRC Complaint, the Company is seeking, among other things, an injunction to stop TSMC's infringing acts, public apology from TSMC to the Company and compensation from TSMC to the Company, including profits gained by TSMC from their infringing acts.
TSMC filed with the California court in January 2007 a motion seeking to enjoin the PRC action. In February 2007, TSMC filed with the Beijing High Court a jurisdictional objection, challenging the competency of the Beijing High Court's jurisdiction over the PRC action.
In March 2007, the California Court denied TSMC's motion to enjoin the PRC action. TSMC appealed this ruling to California Court of Appeal. On March 26, 2008, the Court of Appeal, in a written opinion, denied TSMC's appeal.
In July 2007, the Beijing High Court denied TSMC's jurisdictional objection and issued a court order holding that the Beijing High Court shall have proper jurisdiction to try the PRC action. TSMC appealed this order to the Supreme Court of the People's Republic of China. On January 7, 2008, the Supreme Court heard TSMC's appeal. On June 13, 2008, the Supreme Court denied TSMC's appeal and affirmed the jurisdiction of the Beijing High Court.
On August 14, 2007, the Company filed an amended cross-complaint against TSMC seeking, among other things, damages for TSMC's breach of contract and breach of patent license agreement. TSMC thereafter denied the allegations of the Company's amended cross-complaint and subsequently filed additional claims that the Company breached the Settlement Agreement by filing an action in the Beijing High Court. The Company has denied these additional claims by TSMC.
On August 15-17, 2007, the California Court held a preliminary injunction hearing on TSMC's motion to enjoin use of certain process recipes in certain of the Company's 0.13 micron logic process flows. On September 7, 2007, the Court denied TSMC's preliminary injunction motion, thereby leaving unaffected the Company's development and sales. However, the court required the Company to provide 10 days' advance notice to TSMC if the Company plans to disclose logic technology to non-SMIC entities under certain circumstances, to allow TSMC to object to the planned disclosure.
On March 11, 2008, TSMC filed an application for a right to attach order in the California Court. By its application, TSMC sought an order securing an amount equal to the remaining balance on the promissory notes issued by the Company in connection with the Settlement Agreement. The Company opposed the application. A hearing was held on April 3, 2008. On June 24, 2008, the Court denied TSMC's application.
In May 2008, TSMC filed a motion in the California Court for summary adjudication against the Company on several of the Company's cross claims. The Company opposed the motion and on July 25, 2008, the Court granted in part and denied in part TSMC's motion.
On June 23, 2008, the Company filed with California court a
cross-complaint against TSMC seeking, among other things, damages for TSMC's unlawful misappropriation of trade secrets from SMIC to improve its competitive position against SMIC.
On July 10, 2008, the California Court held and granted part of a preliminary injunction hearing on TSMC's motion to enjoin disclosure of information on certain process recipes in the Company's 0.30 micron logic process flows to 3rd parties.
Under the provisions of SFAS 144, the Company is required to make a determination as to whether or not this pending litigation represents an event that requires a further analysis of whether the patent license portfolio has been impaired. We believe that the lawsuit is at a preliminary stage and we are still evaluating whether or not the litigation represents such an event. The Company expects further information to become available to us which will aid us in making a determination. The outcome of any impairment analysis performed under SFAS 144 might result in a material impact to our financial position and results of operations. Because the case is in its preliminary stages, the Company is unable to evaluate the likelihood of an unfavorable outcome or to estimate the amount or range of potential loss.
Summary of Third Quarter 2008 Operating Results
Amounts in US$ thousands, except for EPS and operating data
3Q08 2Q08 QoQ 3Q07 YoY
Revenue 375,945 342,919 9.6 % 391,398 -3.9 %
Cost of sales 348,721 322,077 8.3 % 349,148 -0.1 %
Gross profit 27,224 20,842 30.6 % 42,250 -35.6 %
Operating expenses 40,451 60,750 -33.4 % 62,435 -35.2 %
Loss from operations (13,227) (39,908) -66.9 % (20,185) -34.5 %
Other income expenses, net (15,631) (5,193) 201.0 % (4,342) 260.0 %
Income tax expenses (4,499) (2,046) 119.9 % (966) 365.7 %
Net loss after
income taxes (33,357) (47,147) -29.2 % (25,493) 30.8 %
Minority interest 3,094 1,603 93.0 % 859 260.2 %
Loss from equity investment (26) (85) -69.4 % (919) -97.2 %
Loss attributable to
holders of
ordinary shares (30,289) (45,629) -33.6 % (25,553) 18.5 %
Gross margin 7.2 % 6.1 % 10.8 %
Operating margin -3.5 % -11.6 % -5.2 %
Net loss per ordinary share
- basic(1) (0.0016) (0.0025) (0.0014)
Net loss per ADS - basic (0.0814) (0.1227) (0.0690)
Net loss per ordinary share
- diluted(1) (0.0016) (0.0025) (0.0014)
Net loss per ADS - diluted (0.0814) (0.1227) (0.0690)
Wafers shipped (in 8"
wafers)(2) 431,660 402,114 7.3 % 458,466 -5.8 %
Capacity utilization 90.5 % 92.2 % 94.1 %
Note:
(1) Based on weighted average ordinary shares of 18,612 million (basic)
and 18,612 million (diluted) in 3Q08, 18,589 million (basic) and
18,589 million (diluted) in 2Q08 and 18,523 million (basic) and 18,523
million (diluted) in 3Q07
(2) Including copper interconnects
-- Overall revenue increased to $375.9 million in 3Q08, up 9.6% QoQ from
$342.9 million in 2Q08 due to an increase in logic sales from 0.13
micron technology nodes and below; and down 3.9% YoY from $391.4
million in 3Q07.
-- Simplified ASP increased by 2.1% from $853 in 2Q08 to $871 in 3Q08.
-- Cost of sales increased to $348.7 million in 3Q08, up 8.3% QoQ from
$322.1 million in 2Q08 due to the increase in wafer shipments.
-- Gross profit increased to $27.2 million in 3Q08, up 30.6% QoQ from
$20.8 million in 2Q08 and down 35.6% YoY from $42.3 million in 3Q07.
-- Gross margins increased to 7.2% in 3Q08 from 6.1% in 2Q08.
-- Total operating expenses decreased to $40.5 million in 3Q08 from $60.8
million, a decrease of 33.4% QoQ primarily due to a decrease in both
research & development expenses and general administrative expenses.
-- R&D expenses decreased to $17.8 million in 3Q08, down 52.7% from $37.7
million, primarily due to an increase in government subsidies received
in 3Q08.
-- G&A expenses decreased to $10.8 million in 3Q08 from $13.3 million in
2Q08 primarily due to a decrease in legal expenses.
-- Selling & marketing expenses increased to $5.6 million in 3Q08, up
28.1% QoQ from $4.4 million in 2Q08, primarily due to certain tax
expenses in connection with the selling activities.
Analysis of Revenues
Sales Analysis
By Application 3Q08 2Q08 3Q07
Computer 5.4 % 7.9 % 22.7 %
Communications 53.0 % 51.1 % 50.0 %
Consumer 32.8 % 32.4 % 18.3 %
Others 8.8 % 8.6 % 9.0 %
By Service Type 3Q08 2Q08 3Q07
Logic(3) 87.4 % 85.7 % 66.8 %
DRAM 2.3 % 3.6 % 23.6 %
Management services 2.4 % 2.6 % 3.1 %
Mask making, testing, others 7.9 % 8.1 % 6.5 %
By Customer Type 3Q08 2Q08 3Q07
Fabless semiconductor companies 55.1 % 54.6 % 45.5 %
Integrated device manufacturers (IDM) 26.1 % 25.7 % 40.0 %
System companies and others 18.8 % 19.7 % 14.5 %
By Geography 3Q08 2Q08 3Q07
North America 58.6 % 55.1 % 44.7 %
Asia Pacific (ex. Japan) 34.6 % 34.7 % 26.4 %
Japan 2.1 % 3.6 % 10.1 %
Europe 4.7 % 6.6 % 18.8 %
Wafer Revenue Analysis
By Technology (Logic, DRAM
& copper interconnect only) 3Q08 2Q08 3Q07
0.09um 19.4 % 18.4 % 26.7 %
0.13um 25.1 % 22.9 % 28.6 %
0.15um 2.0 % 2.1 % 2.0 %
0.18um 33.9 % 37.7 % 28.8 %
0.25um 0.5 % 0.6 % 1.0 %
0.35um 19.1 % 18.3 % 12.9 %
By Technology (Logic Only)(1) 3Q08 2Q08 3Q07
0.09um 19.4 % 16.4 % 13.7 %
0.13um (2) 23.2 % 21.8 % 22.7 %
0.15um 2.0 % 2.2 % 2.7 %
0.18um 35.0 % 39.6 % 41.0 %
0.25um 0.5 % 0.6 % 1.4 %
0.35um 19.9 % 19.4 % 18.5 %
Note:
(1) Excluding 0.13um copper interconnects
(2) Represents revenues generated from manufacturing full flow wafers
(3) Including 0.13um copper interconnects
Capacity*
Fab / (Wafer Size) 3Q08 2Q08
Shanghai Mega Fab (8") 88,000 86,000
Beijing Mega Fab (12") 36,000 40,500
Tianjin Fab (8") 30,000 28,000
Total monthly wafer fabrication capacity 154,000 154,500
Note:
* Wafers per month at the end of the period in 8" wafers
Shipment and Utilization
8" equivalent wafers 3Q08 2Q08 3Q07
Wafer shipments including
copper interconnects 431,660 402,114 458,466
Utilization rate(1) 90.5 % 92.2 % 94.1 %
Note:
(1) Capacity utilization based on total wafer out divided by estimated
capacity
-- Wafer shipments increased 7.3% QoQ to 431,660 units of 8-inch
equivalent wafers in 3Q08 from 402,114 units of 8-inch equivalent
wafers in 2Q08, and down 5.8% YoY from 458,466 8-inch equivalent wafers
in 3Q07.
-- Logic shipments increased by 9.9% QoQ to 396,169 units of 8-inch
equivalent wafers in 3Q08 from 2Q08 and up 32.1% YoY from 3Q07.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands 3Q08 2Q08 QoQ 3Q07 YoY
Cost of sales 348,721 322,077 8.3 % 349,148 -0.1 %
Depreciation 165,641 153,783 7.7 % 151,720 9.2 %
Other manufacturing costs 176,329 160,938 9.6 % 189,069 -6.7 %
Deferred cost amortization 5,886 5,886 5,886
Share-based compensation 865 1,470 -41.2 % 2,473 -65.0 %
Gross Profit 27,224 20,842 30.6 % 42,250 -35.6 %
Gross Margin 7.2 % 6.1 % 10.8 %
-- Cost of sales increased to $348.7 million in 3Q08, up 8.3% QoQ from
$322.1 million in 2Q08.
-- Gross profit increased to $27.2 million in 3Q08, up 30.6% QoQ from
$20.8 million in 2Q08 and down 35.6% YoY from $42.3 million in 3Q07.
-- Gross margins increased to 7.2% in 3Q08 from 6.1% in 2Q08.
Operating Expense Analysis
Amounts in US$ thousands 3Q08 2Q08 QoQ 3Q07 YoY
Total operating expenses 40,451 60,750 -33.4% 62,435 -35.2%
Research and development 17,838 37,684 -52.7% 25,906 -31.1%
General and administrative 10,761 13,328 -19.3% 23,836 -54.9%
Selling and marketing 5,578 4,356 28.1% 4,901 13.8%
Amortization of intangible assets 6,906 6,899 0.1% 7,751 -10.9%
(Income) Loss from disposal of
properties (632)(1,517) -- 41 --
-- Total operating expenses decreased to $40.5 million in 3Q08 from $60.8
million, a decrease of 33.4% QoQ primarily due to a decrease in both
research & development expenses and general administrative expenses.
-- R&D expenses decreased to $17.8 million in 3Q08, down 52.7% from $37.7
million primarily due to an increase in government subsidies received
in 3Q08.
-- G&A expenses decreased to $10.8 million in 3Q08 from $13.3 million in
2Q08 due to a decrease in legal expenses.
-- Selling & marketing expenses increased to $5.6 million in 3Q08, up
28.1% QoQ from $4.4 million in 2Q08, primarily due to certain tax
expenses in connection with the selling activities.
Other Income (Expenses)
Amounts in US$ 3Q08 2Q08 QoQ 3Q07 YoY
thousands
Other expenses (15,631) (5,193) 201.0 % (4,342) 260.0 %
Interest income 2,542 4,059 -37.4 % 2,819 -9.8 %
Interest expense (11,088) (15,279) -27.4 % (14,791) -25.0 %
Other, net (7,085) 6,027 -- 7,629 --
-- Interest expense decreased in 3Q08 as compared to 2Q08 due to a lower
average loan balance as well as an increase in the capitalized interest.
-- The increase in Other, net is due primarily to a a foreign exchange
loss of $7.0 million related to non-operating activities recorded in
3Q08 as compared to a gain of $2.5 million in 2Q08. Combined with the
foreign exchange gain from operating activities, the company recorded
total foreign exchange loss of $4.6 million in 3Q08 as compared to a
gain of $7.8 million in 2Q08.
Liquidity
Amounts in US$ thousands 3Q08 2Q08
Cash and cash equivalents 392,881 480,265
Restricted cash 3,000 91,130
Short term investments 50,646 32,326
Accounts receivable 285,874 262,418
Inventory 233,022 252,394
Others 72,272 64,767
Total current assets 1,037,695 1,183,300
Accounts payable 301,712 345,801
Short-term borrowings 212,600 242,908
Current portion of long-term debt 340,355 341,630
Others 177,736 159,958
Total current liabilities 1,032,403 1,090,297
Cash Ratio 0.3x 0.5x
Quick Ratio 0.7x 0.8x
Current Ratio 1.0x 1.1x
Capital Structure
Amounts in US$ thousands 3Q08 2Q08
Cash and cash equivalents 392,881 480,265
Restricted cash 3,000 91,130
Short-term investment 50,646 32,326
Current portion of promissory note 29,493 29,242
Promissory note 37,762 37,441
Short-term borrowings 212,600 242,908
Current portion of long-term debt 340,355 341,630
Long-term debt 692,131 695,292
Total debt 1,245,086 1,279,830
Shareholders' equity 2,721,561 2,749,470
Total debt to equity ratio 45.7 % 46.5 %
Cash Flow
Amounts in US$ thousands 3Q08 2Q08
Net cash from operating activities 110,119 147,211
Net cash from investing activities (162,773) (320,120)
Net cash from financing activities (34,668) 146,927
Net change in cash (87,384) (26,055)
Capex Summary
-- Capital expenditures for 3Q08 were $242 million.
-- Total capital expenditures for 2008 are expected to be around $790
million. The capital expenditure is incurred primarily for the
expansion of 8-inch fab capacity, the conversion of the Beijing fab
from DRAM to logic production and R&D activities.
-- We plan to hold back any capacity expansion in 2009 until we have more
visibility of end-customer demands. Currently, the planned capex for
2009 is around $200 million.
Fourth Quarter 2008 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" above.
-- Revenues expected to decline 25% to 29% from 3Q08.
-- Operating expense as a percentage of revenue expected to be around the
mid-teens.
-- Capital expenditure expected to be approximately $165 million to $195
million.
Recent Highlights and Announcements
-- SMIC Reiterates 2008 Third Quarter Revenue Guidance [2008-9-28]
-- SMIC S2/FAB 8 passes the ISO 27001 Information Security Management
System Certification [2008-9-26]
-- SMIC 2008 Technology Symposium held in Shanghai [2008-9-19]
-- Announcement of Unaudited Interim Results for the Six Months Ended
June 30, 2008 [2008-9-19]
-- Spansion Extends SMIC Agreement to Include 43nm MirrorBit ORNAND2
Technology [2008-8-21]
-- SMIC President and CEO Dr. Richard Chang to Run Anchor Leg of Beijing
Economic and Technical Development Area Portion of Olympic Torch Relay
[2008-8-8]
-- Telepath Collaborated with Infineon and SMIC to Successfully Enable
Diverse Mobile TV Devices for the 2008 Summer Olympic Games [2008-8-4]
-- SMIC Reports Results for the Three Months Ended June 30, 2008
[2008-7-28]
Please visit SMIC's website at http://www.smics.com/website/enVersion/Press_Center/pressRelease.jsp
for further details regarding the recent announcements.
Semiconductor Manufacturing International Corporation
BALANCE SHEET
(In US dollars)
As of the end of
Sep 30, 2008 Jun 30, 2008
(unaudited) (unaudited)
Assets
Current assets
Cash and cash equivalents $392,881,020 $480,265,390
Restricted Cash 3,000,000 91,129,665
Short term investments 50,645,536 32,325,653
Accounts receivable, net of
Allowances of $4,697,378
and $4,491,881 at September
30, 2008 and June 30, 2008
respectively 285,873,827 262,418,476
Inventories 233,022,657 252,393,858
Prepaid expense and other current
assets 52,768,850 43,757,844
Receivable for sale of plant and
equipment and other fixed assets 19,503,560 19,503,560
Assets held for sale - 1,505,287
Total current assets 1,037,695,450 1,183,299,733
Land use rights, net 74,437,989 56,973,227
Plant and equipment, net 3,106,399,766 3,073,939,856
Acquired intangible assets, net 212,611,259 219,542,603
Deferred cost 52,977,956 58,864,395
Equity investment 11,444,506 9,570,309
Other long-term prepayments 2,379,500 2,431,307
Deferred tax assets 43,971,049 44,482,712
Total Assets $4,541,917,475 $4,649,104,142
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $301,711,981 $345,801,391
Accrued expenses and other current
liabilities 147,725,420 130,233,266
Short-term borrowings 212,600,414 242,907,613
Current portion of promissory note 29,492,873 29,242,001
Current portion of long-term debt 340,355,129 341,630,053
Income tax payable 517,682 482,264
Total current liabilities 1,032,403,499 1,090,296,588
Long-term liabilities:
Promissory note 37,762,091 37,440,879
Long-term debt 692,131,401 695,291,528
Long-term payables relating to
license agreements 28,037,163 43,488,864
Deferred tax liabilities 621,029 621,029
Total long-term liabilities 758,551,684 776,842,300
Total liabilities $1,790,955,183 $1,867,138,888
Minority interest $29,401,201 $32,495,675
Stockholders' equity:
Ordinary shares，$0.0004 par value,
50,000,000,000 shares authorized,
shares issued and outstanding
18,619,884,481 and 18,592,920,335
at September 30, 2008 and June
30, 2008, respectively 7,447,954 7,437,168
Additional paid-in capital 3,323,364,177 3,320,932,081
Accumulated other comprehensive
loss (199,305) (137,073)
Accumulated deficit (609,051,735) (578,762,598)
Total stockholders' equity 2,721,561,091 2,749,469,578
Total liabilities and
stockholders' equity $4,541,917,475 $4,649,104,142
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars)
For the three months ended
Sep 30, 2008 Jun 30, 2008
(unaudited) (unaudited)
Sales $375,944,833 $342,919,148
Cost of sales 348,720,498 322,076,702
Gross profit 27,224,335 20,842,446
Operating expenses:
Research and development 17,838,076 37,684,073
General and administrative 10,760,722 13,328,153
Selling and marketing 5,578,365 4,356,161
Amortization of acquired intangible
assets 6,906,344 6,898,279
Income from sale of plant and
equipment and other fixed assets (632,029) (1,516,754)
Total operating expenses 40,451,478 60,749,912
Loss from operations (13,227,143) (39,907,466)
Other income (expenses):
Interest income 2,541,743 4,058,901
Interest expense (11,087,893) (15,279,685)
Foreign currency exchange (loss)
gain (7,022,913) 2,478,287
Other income, net (62,216) 3,549,159
Total other expenses, net (15,631,279) (5,193,338)
Net loss before income tax, minority
interest and loss from equity
investment (28,858,422) (45,100,804)
Income tax expense (4,499,387) (2,046,464)
Minority interest 3,094,474 1,602,964
Loss from equity investment (25,803) (85,122)
Net loss ($30,289,138) ($45,629,426)
Net loss per share, basic (0.0016) (0.0025)
Net loss per ADS, basic (0.0814) (0.1227)
Net loss per share, diluted (0.0016) (0.0025)
Net loss per ADS, diluted (0.0814) (0.1227)
Ordinary shares used in calculating
basic loss per ordinary share 18,612,441,880 18,59,202,067
Ordinary shares used in calculating
diluted loss per ordinary share 18,612,441,880 18,589,202,067
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars)
For the three months ended
Sep 30, 2008 Jun 30, 2008
(unaudited) (unaudited)
Operating activities
Net loss ($30,289,138) ($45,629,426)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Minority interest (3,094,474) (1,602,964)
Deferred tax 511,663 (6,223,931)
Gain on disposal of plant and
equipment (632,029) (1,516,754)
Depreciation and amortization 188,387,781 187,912,371
Amortization of acquired intangible
assets 6,931,344 6,898,279
Share-based compensation 2,368,706 3,293,295
Non cash interest expense on
promissory notes 1,522,485 1,839,073
Loss from equity investment 25,803 85,122
Changes in operating assets and
liabilities:
Accounts receivable, net (23,455,351) 21,513,042
Inventories 19,371,201 (36,234,839)
Prepaid expense and other current
assets (9,608,778) (6,011,332)
Accounts payable (57,377,721) 33,225,078
Accrued expenses and other current
liabilities 15,422,174 (10,301,330)
Income tax payable 35,418 (34,187)
Net cash provided by operating
activities 110,119,084 147,211,497
Investing activities:
Purchase of plant and equipment (220,937,580) (204,346,529)
Proceeds from disposal of plant and
equipment 3,920,056 9,157
Proceeds received from sale of
assets held for sale 1,004,594 642,452
Purchases of acquired intangible
assets (14,670,000) (22,443,824)
Purchase of short-term investments (154,185,792) (94,846,471)
Purchase of equity investment (1,900,000) -
Sale of short-term investments 135,865,909 91,994,718
Change in restricted cash 88,129,665 (91,129,665)
Net cash used in investing
activities (162,773,148) (320,120,162)
Financing activities:
Proceeds from short-term borrowing 84,680,413 208,437,613
Proceeds from long-term debt - 227,024,023
Repayment of promissory notes - (15,000,000)
Repayment of long-term debt (4,435,051) (170,780,962)
Repayment of short-term debt (114,987,613) (103,000,000)
Proceeds from exercise of employee
stock options 74,176 246,496
Net cash (used in) provided by
financing activities (34,668,075) 146,927,170
Effect of exchange rate changes (62,231) (73,428)
Net Decrease in cash and cash
equivalents (87,384,370) (26,054,923)
Cash and cash equivalents, beginning
of period 480,265,390 506,320,313
Cash and cash equivalents, end of
period 392,881,020 480,265,390
