Growth Momentum in 2Q Sales with 52.8% Q-o-Q Surge
Continued to Achieve Profitable Results Amid Challenging Environment
HONG KONG, Aug. 7, 2013 /PRNewswire/ -- Advanced Semiconductor Manufacturing Corporation Limited ("ASMC" or "the Company", HKEX stock code: 3355), a leading foundry primarily focused on the manufacture of analog semiconductors and higher bipolar content-based mixed-signal semiconductors, announced its results for the six months ended 30 June 2013.
Results Highlight
Results Summary
Signs of weak recovery emerged in advanced economies, and China's economy expanded at its slowest pace in 23 years during 1H 2013. Despite the unfavorable market conditions, the Company managed to register a profitable position with net income amounting to RMB3.5 million in 1H 2013.
As affected by adverse factors such as an inventory correction in the semiconductor supply chain, the traditional slow season and a prolonged annual maintenance shutdown, sales in 1H 2013 declined by 18.2% year-on-year to RMB366.9 million. Nevertheless, sales in 2Q 2013 picked up momentum and surged by 52.8% Q-o-Q to RMB221.7 million, while net income amounted to RMB29.7 million in the same period, mainly attributable to the substantial increase in sales of both 6-inch and 8-inch waters and, to a lesser extent, to sales of 5-inch wafers.
Gross margin stood at 13.9% compared to the corresponding period of last year thanks to the Company's considerable efforts in cost reduction, which enabling the Company to reduce its controllable costs such as parts and chemicals, and to lower depreciation charges as a result of certain assets being fully depreciated via a series of cost control initiatives.
Operations Review
Confronting the headwinds arising from an inventory correction in the semiconductor supply chain and a prolonged annual maintenance shutdown, along with the unfavorable impact of the traditional slow season in the first half of 2013, the Company adhered to its principle of focusing on "promoting transformative development and creating a bright future", and also placed much emphasis on improving its management capabilities, operational efficiency and sustainability.
The Company capitalized on a window of opportunity to improve its capacity and productivity by spending its CAPEX on production facilities and equipment enhancement associated with 6-inch and 8-inch wafers with the aim of preparing for opportunities that will arise as the economy recovers. Furthermore, the Company intensified its efforts to focus on new product development activities, particularly in the domestic market during the reporting period in the hopes of providing more diversity in its product offerings.
The Company maintained a healthy financial position during the period under review. As at 30 June 2013, it held RMB369.4 million in cash and cash equivalents with a current ratio of 3.32. The debt-to-equity ratio of the Company was 23%.
Market Outlook and Future Plans
Looking into the second half of 2013, the global semiconductor market is likely to see slower growth given the persistence of challenging macro and market conditions. Indeed, slow consumer spending and low consumer confidence overshadows the outlook on the semiconductor industry. To confront the challenging operating environment, the Company took a number of strict cost control measures during the first half of 2013 and managed to keep its footing in the second quarter of 2013, thereby laying a solid foundation for the full year's operating performance.
As part of its efforts to sustain its growth and development, the Company will accelerate the adjustment of its product structure to tap the evolving demand of its customers in the domestic market. In addition, the Company will propel its shift towards an innovative business model with an emphasis on strengthening its ability to sales and marketing, design service and technology, and will continue to seek strategic alliances with key players in the semiconductor supply chain.
Dr. Jeffrey Wang, Executive Director and President of ASMC said, "Leveraging our concerted efforts in sales and marketing in China by fostering cooperation with major players in the domestic industry chain, the revenue contribution from Asia Pacific has increased gradually since 2012. We will continue to pursue further expansion and boost sales in the Greater China region, which will become one of our key growth drivers in the future. Moving forward, the Company will endeavor to further enhance its management, improve its overall competitiveness. The Company believes that its ongoing growth plan and strategies will reinvigorate its efforts to become the most respectable and dedicated analog foundry both at home and abroad."
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 which 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 and fabless semiconductor companies.
