-- 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. 30 /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, 2007.
(Logo: http://www.prnasia.com/sa/200611101605-min.jpg )
Third Quarter 2007 Highlights:
-- Revenue up by 6.1% over 3Q06 to $391.4 million and up by 4.4% from
$374.8 million in 2Q07.
-- Gross margins were 10.8% in 3Q07 compared to 10.3% in 2Q07.
-- Net loss of $25.6 million in 3Q07 due to severe price declines in
the DRAM market, compared to a net loss of $2.1 million in 2Q07.
-- Fully diluted EPS was ($0.0690) per ADS.
Commenting on the quarterly results, Dr. Richard Chang, Chief Executive Officer of SMIC remarked,
SMIC saw continued growth in our foundry business in the third
quarter of 2007 and recorded revenue growth on a year-on-year and a
quarter-on-quarter basis. Our logic and non-DRAM related business
continued to grow as revenue increased 12.1% over the second quarter to
$299.0 million. Revenues at 90-nanometer increased to 26.7%, up from
22.0% in second quarter of 2007. Gross margins increased slightly to
10.8% in 3Q07 from 10.3% in 2Q07 primarily due to higher utilization and a
higher proportion of logic shipments. Operationally, wafer shipments
increased year over year by 10.7%, while capacity utilization increased
to 94.1%, up from 84.3% in the third quarter of 2006.
Despite the strength of our non-DRAM foundry services, our business
was impacted by ongoing severe price declines in the DRAM market. DRAM
revenues were reduced to 23.6% of total revenues, compared to 28.9%
reported in the second quarter of 2007. We reported a quarterly loss
of $25.6 million which includes an additional loss provision for DRAM
inventories of about $10 million. We expect revenues from DRAM as a
proportion of our total revenue to decrease in the next two quarters.
As a part of our long-term strategy to lower capital expenditures
while increasing production capacity, we are currently managing fabs
owned and financed by local governments. The 200-millimeter Chengdu fab
is progressing smoothly. Pilot production began in the second quarter,
and we expect to start mass production by the end of the year. For the
300-millimeter Wuhan fab, we still plan to start the equipment move-in
during the fourth quarter of 2007.
Our technology roadmap is well on track, with our 65-nanometer
technology development making steady progress. Commercial production
of 2Gb NAND flash started in September, 2007, and we are developing an
8Gb NAND flash product. We were also pleased to announce recently that
we have entered into a strategic agreement with Spansion, in which
Spansion will transfer its 65nm flash technology to SMIC. This move will
allow SMIC to enter selected segments of the flash memory market with a
license to manufacture and sell 90nm and 65nm and potentially future
Spansion MirrorBit(R) Quad products.
We are committed to our strategy and are confident that prudent
development of advanced technology nodes in China for leading customers
will position SMIC for solid, long-term growth.
Conference Call / Webcast Announcement
Date: October 31, 2007
Time: 8:00 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 2007 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 90nm 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, 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 under construction 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 our expectation that revenues from DRAM as a proportion of our total revenue will decrease in the next two quarters, SMIC’s ability to grow and improve profitability, and statements under "Capex Summary" and "Fourth Quarter 2007 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, 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, 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 29, 2007, especially in the "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" sections, and its registration statement on Form A-1 as filed with the Stock Exchange of Hong Kong (SEHK) on March 8, 2004, 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 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. Moreover, TSMC has not yet proven any trade secret misappropriation by the Company. At present, the claims rest as unproven allegations, denied by the Company.
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, SMIC 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 has appealed this ruling to California Court of 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 has appealed this order to the Supreme Court of the People’s Republic of China.
On August 14, 2007, the Company filed an amended cross-complaint against TSMC seeking, among other things, damages for TSMC’s breach of contract.
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, the Court denied TSMC’s preliminary injunction motion, thereby leaving unaffected the Company’s development and sales. Instead, the court only 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.
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 very early 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 early 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 2007 Operating Results
Amounts in US$ thousands, except for EPS and operating data
3Q07 2Q07 QoQ 3Q06(3) YoY
Revenue 391,398 374,829 4.4% 368,926 6.1%
Cost of sales 349,148 336,339 3.8% 342,046 2.1%
Gross profit 42,250 38,490 9.8% 26,880 57.2%
Operating expenses 62,435 47,113 32.5% 40,317 54.9%
Loss from operations (20,185) (8,623) 134.1% (13,437) 50.2%
Other income
(expenses), net (4,342) 6,085 -- (21,819) -80.1%
Income tax (expenses)
benefit (966) 1,621 -- 3,047 --
Net loss after
income taxes (25,493) (917) 2680.0% (32,209) -20.9%
Minority interest 859 (137) -- (2,674) --
Share of loss of
affiliate company (919) (1,001) -8.2% (1,097) -16.2%
Net loss (25,553) (2,054) 1144.1% (35,980) -29.0%
Gross margin 10.8% 10.3% 7.3%
Operating margin -5.2% -2.3% -3.6%
Net loss per ordinary
share -- basic(1) (0.0014) (0.0001) (0.0020)
Net loss per ADS --
basic (0.0690) (0.0056) (0.0980)
Net loss per ordinary
share -- diluted(1) (0.0014) (0.0001) (0.0020)
Net loss per ADS -
diluted (0.0690) (0.0056) (0.0980)
Wafers shipped (in 8"
wafers)(2) 458,466 443,445 3.4% 413,985 10.7%
Capacity utilization 94.1% 88.9% -- 84.3% --
Note:
(1) Based on weighted average ordinary shares of 18,523 million
(basic) and 18,523 million (diluted) in 3Q07, 18,477 million
(basic) and 18,477 million (diluted) in 2Q07 and 18,356 million
(basic) and 18,356 million (diluted) in 3Q06
(2) Including copper interconnects
(3) As restated
-- Revenue increased to $391.4 million in 3Q07, up 4.4% QoQ from
$374.8 million in 2Q07 and up 6.1% YoY from $368.9 million in 3Q06.
As compared to 2Q07, logic revenue increased by 13.0% while DRAM
revenue fell by 14.6% in 3Q07.
-- Cost of sales increased to $349.1 million in 3Q07, up 3.8% QoQ from
$336.3 million in 2Q07, primarily due to an increase in loss
provision for DRAM inventories as of the end of 3Q07 resulting from
the ongoing severe price declines in the DRAM market.
-- Gross profit increased to $42.3 million in 3Q07, up 9.8% QoQ from
$38.5 million in 2Q07 and up 57.2% YoY from $26.9 million in 3Q06.
-- Gross margins increased to 10.8% in 3Q07 from 10.3% in 2Q07 primarily
because of the positive impact from higher utilization and higher
logic shipments which were partially offset by price decline for DRAM
products.
-- Total operating expenses increased to $62.4 million in 3Q07 from
$47.1 million, an increase of 32.5% QoQ, primarily due to increased
R&D and G&A expenses.
-- R&D expenses increased to $25.9 million in 3Q07, up 11.7% from $23.2
million due to costs relating to the new 12-inch project in Shanghai
and 65nm R&D activities.
-- G&A expenses increased to $23.8 million in 3Q07 from $14.7 million
in 2Q07. G&A expenses excluding foreign exchange loss remained flat
at $18.1 million. The foreign exchange loss from operating activities
in 3Q07 was $5.7 million as compared to a gain of $4.8 million in 2Q07.
However, combining the foreign exchange gain from non-operating
activities, which was recorded in other income, a total gain of $2.0
million was recorded in 3Q07 as compared to a gain of $3.3 million
in 2Q07.
-- Selling & marketing expenses increased to $4.9 million in 3Q07, up
15.8% QoQ from $4.2 million in 2Q07.
Analysis of Revenues
Sales Analysis
By Application 3Q07 2Q07 3Q06
Computer 22.7% 25.2% 33.0%
Communications 50.0% 40.7% 37.1%
Consumer 18.3% 24.3% 25.2%
Others 9.0% 9.8% 4.7%
By Service Type 3Q07 2Q07 3Q06
Logic(3) 66.8% 61.8% 65.4%
DRAM 23.6% 28.9% 30.1%
Management Services 3.1% 3.2% 0.4%
Mask Making, testing, others 6.5% 6.1% 4.1%
By Customer Type 3Q07 2Q07 3Q06
Fabless semiconductor companies 45.5% 43.8% 36.9%
Integrated device manufacturers (IDM) 40.0% 42.3% 50.4%
System companies and others 14.5% 13.9% 12.7%
By Geography 3Q07 2Q07 3Q06
North America 44.7% 39.6% 38.6%
Asia Pacific (ex. Japan) 26.4% 29.1% 25.4%
Japan 10.1% 8.9% 7.5%
Europe 18.8% 22.4% 28.5%
Wafer Revenue Analysis
By Technology (logic, DRAM & copper
interconnect only) 3Q07 2Q07 3Q06
0.09mm 26.7% 22.0% 4.9%
0.13mm 28.6% 33.0% 41.2%
0.15mm 2.0% 1.2% 7.2%
0.18mm 28.8% 30.8% 36.1%
0.25mm 1.0% 0.7% 2.6%
0.35mm 12.9% 12.3% 8.0%
By Technology (Logic Only)(1) 3Q07 2Q07 3Q06
0.09mm 13.7% 15.3% 4.6%
0.13mm(2) 22.7% 19.0% 11.1%
0.15mm 2.7% 1.9% 11.8%
0.18mm 41.0% 43.6% 55.3%
0.25mm 1.4% 0.9% 4.1%
0.35mm 18.5% 19.3% 13.1%
Note:
(1) Excluding 0.13mum copper interconnects
(2) Represents revenues generated from manufacturing full flow wafers
(3) Including 0.13mum copper interconnects
Capacity(1)
Fab / (Wafer Size) 3Q07 2Q07
Shanghai Mega Fab (8")(2) 98,000 94,000
Beijing Mega Fab (12")(3) 61,200 54,000
Tianjin Fab (8") 21,000 21,000
Total monthly wafer fabrication
capacity 180,200 169,000
Note:
(1) Wafers per month at the end of the period in 8" wafers
(2) Shanghai Mega Fab is now comprised of Fab 1, Fab 2, and Fab 3
(3) Beijing Mega Fab is now comprised of Fab 4, Fab 5, and Fab 6
-- Total capacity increased to 180,200 8-inch wafer equivalent per
month at the end of 3Q07.
Shipment and Utilization
8" equivalent wafers 3Q07 2Q07 3Q06
Wafer shipments including copper
interconnects 458,466 443,445 413,985
Utilization rate(1) 94.1% 88.9% 84.3%
Note:
(1) Capacity utilization based on total wafer out divided by
estimated capacity
-- Wafer shipments increased 3.4% QoQ to 458,466 units of 8-inch
equivalent wafers in 3Q07 from 443,445 units of 8-inch equivalent
wafers in 2Q07, and up 10.7% YoY from 413,985 8-inch equivalent
wafers in 3Q06.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands 3Q07 2Q07 QoQ 3Q06 YoY
Cost of sales 349,148 336,339 3.8% 342,046 2.1%
Depreciation 151,720 159,154 -4.7% 196,993 -23.0%
Other manufacturing
costs 189,069 168,408 12.3% 136,327 38.7%
Deferred cost
amortization 5,886 5,886 -- 5,886 --
Share-based compensation 2,473 2,891 -14.5% 2,840 -12.9%
Gross Profit 42,250 38,490 9.8% 26,880 57.2%
Gross Margin 10.8% 10.3% -- 7.3% --
-- Cost of sales increased to $349.1 million in 3Q07, up 3.8% QoQ from
$336.3 million in 2Q07, primarily due to an increase in loss
provision for DRAM inventories as of the end of 3Q07 resulting from
the ongoing severe price declines in the DRAM market.
-- Gross profit increased to $42.3 million in 3Q07, up 9.8% QoQ from
$38.5 million in 2Q07 and up 57.2% YoY from $26.9 million in 3Q06.
-- Gross margins increased to 10.8% in 3Q07 from 10.3% in 2Q07 primarily
because of the positive impact from higher utilization and higher
logic shipments which were partially offset by price decline for DRAM
products.
Operating Expense Analysis
Amounts in US$ thousands 3Q07 2Q07 QoQ 3Q06 YoY
Total operating expenses 62,435 47,113 32.5% 40,317 54.9%
Research and development 25,906 23,194 11.7% 27,319 -5.2%
General and administrative 23,836 14,746 61.6% 4,216 465.4%
Selling and marketing 4,901 4,234 15.8% 3,614 35.6%
Amortization of intangible
assets 7,751 6,213 24.8% 6,040 28.3%
Loss (Income) from disposal of
properties 41 (1,274) -- (872) --
-- Total operating expenses increased to $62.4 million in 3Q07 from
$47.1 million, an increase of 32.5% QoQ, primarily due to increased R&D
and G&A expenses.
-- R&D expenses increased to $25.9 million in 3Q07, up 11.7% from $23.2
million due to costs relating to the new 12-inch project in Shanghai
and 65nm R&D activities.
-- G&A expenses increased to $23.8 million in 3Q07 from $14.7 million
in 2Q07. G&A expenses excluding foreign exchange loss remained flat
at $18.1 million. The foreign exchange loss from operating activities
in 3Q07 was $5.7 million as compared to a gain of $4.8 million in 2Q07.
However, combining the foreign exchange gain from non-operating
activities, which was recorded in other income, a total gain of $2.0
million was recorded in 3Q07 as compared to a gain of $3.3 million in
2Q07.
-- Selling & marketing expenses increased to $4.9 million in 3Q07, up
15.8% QoQ from $4.2 million in 2Q07.
Other Income (Expenses)
Amounts in US$ thousands 3Q07 2Q07 QoQ 3Q06 YoY
Other income (expenses) (4,342) 6,085 -- (21,819) -80.1%
Interest income 2,204 2,679 -17.7% 2,970 -25.8%
Interest expense (14,791) 3,343 -- (12,247) 20.8%
Other, net 8,245 63 12987.3% (12,542) --
-- Other non-operating loss of $4.3 million in 3Q07 as compared to a
gain of $6.1 million in 2Q07, primarily due to government interest
subsidies received in 2Q07 in conjunction with the ramp up of the
12-inch fabs.
-- The increase in Other, net is due to foreign exchange gain of $7.7
million from non-operating activities recorded in 3Q07 as compared to
a loss of $1.5 million in 2Q07. Combined with the foreign exchange
loss from operating activities, total foreign exchange gain was $2.0
million in 3Q07 as compared to a total gain of $3.3 million in 2Q07
Liquidity
Amounts in US$ thousands 3Q07 2Q07
Cash and cash equivalents 382,987 372,449
Short term investments 69,947 73,080
Accounts receivable 308,020 300,379
Inventory 254,875 237,966
Others 80,614 125,413
Total current assets 1,096,443 1,109,287
Accounts payable 387,356 483,925
Short-term borrowings 70,000 108,000
Current portion of long-term
debt 290,744 290,533
Others 144,326 124,086
Total current liabilities 892,426 1,006,544
Cash Ratio 0.4x 0.4x
Quick Ratio 0.9x 0.7x
Current Ratio 1.2x 1.1x
Capital Structure
Amounts in US$ thousands 3Q07 2Q07
Cash and cash equivalents 382,987 372,449
Short-term investment 69,947 73,080
Current portion of promissory note 29,493 29,242
Promissory note 64,996 64,443
Short-term borrowings 70,000 108,000
Current portion of long-term debt 290,744 290,533
Long-term debt 587,091 574,564
Total debt 947,835 973,097
Shareholders’ equity 3,007,379 3,027,635
Total debt to equity ratio 31.5% 32.1%
Cash Flow
Amounts in US$ thousands 3Q07 2Q07
Net cash from operating activities 142,910 152,999
Net cash from investing activities (107,751) (146,800)
Net cash from financing activities (24,571) 24,593
Net change in cash 10,538 30,745
Capex Summary
-- Capital expenditures for 3Q07 were $139 million.
-- Total planned capital expenditures for 2007 will be approximately
$700 million and will be adjusted based on market conditions.
Fourth Quarter 2007 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 increase 2% to 5% from the third quarter.
-- Operating expense as a percentage of sales expected to be in the
mid-teens.
-- Capital expenditures expected to be approximately $60 million to
$90 million.
-- Depreciation and amortization expected to be approximately $185
million to $205 million.
Recent Highlights and Announcements
-- SMIC Holds 2007 Technology Symposium in Shanghai [2007-9-21]
-- Announcement of Unaudited Interim Results for the Six Months Ended
June 30, 2007 [2007-9-20]
-- U.S. Court Denies Preliminary Injunction Sought By TSMC Against
SMIC [2007-9-9]
-- SMIC holds 2007 Technology Symposium in Shenzhen [2007-8-30]
-- Resignation and Appointment of Non-Executive Director [2007-8-30]
-- Synopsys and SMIC Jointly Address China Mobile TV Market with Low
Power Design Solution [2007-8-29]
-- Qimonda Expands Foundry Agreement with SMIC [2007-8-21]
-- Cadence and SMIC Collaboration Validates RF Design Kit for Wireless
IC Design [2007-8-2]
-- SMIC Reports 2007 Second Quarter Results [2007-7-26]
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
September 30, June 30,
2007 2007
ASSETS
Current assets:
Cash and cash equivalents $382,987,357 $372,449,095
Short term investments 69,946,991 73,079,577
Accounts receivable, net of allowances
of $4,496,016 and $4,688,098,
respectively 308,020,158 300,379,234
Inventories 254,874,702 237,966,018
Prepaid expense and other
current assets 27,310,047 13,059,060
Receivable for sale of plant and equipment
and other fixed assets 50,180,365 109,907,931
Assets held for sale 3,123,567 2,445,806
Total current assets 1,096,443,187 1,109,286,721
Land use rights, net 47,133,249 47,139,822
Plant and equipment, net 3,275,509,427 3,375,543,336
Acquired intangible
assets, net 72,925,914 62,413,712
Deferred cost 76,523,714 82,410,154
Equity investment 10,782,486 11,407,056
Other long-term prepayments 3,179,173 3,551,063
Deferred tax assets 34,582,059 33,036,474
TOTAL ASSETS $4,617,079,209 $4,724,788,338
LIABILITIES AND STOCKHOLDERS’
Current liabilities:
Accounts payable 387,356,058 483,925,496
Accrued expenses and other
current liabilities 114,781,960 94,683,683
Short-term
borrowings 70,000,000 108,000,000
Current portion of
promissory note 29,492,873 29,242,001
Current portion of
long-term debt 290,744,282 290,533,471
Income tax
payable 51,233 159,421
Total current
liabilities 892,426,406 1,006,544,072
Long-term liabilities:
Promissory note 64,995,655 64,442,787
Long-term debt 587,090,705 574,563,677
Long-term payables relating
to license agreements 26,453,014 14,458,131
Deferred tax liabilities 2,633,174 184,367
Total long-term liabilities 681,172,548 653,648,962
Total liabilities $1,573,598,954 $1,660,193,034
Minority interest 36,101,510 36,960,657
Stockholders’ equity:
Ordinary shares，$0.0004 par
value, 50,000,000,000
shares authorized, shares
issued and outstanding
18,536,981,058 and
18,493,184,050,
respectively 7,414,793 7,397,274
Warrants 32,387 32,387
Additional paid-in capital 3,307,574,393 3,302,244,424
Accumulated other
comprehensive income 14,195 64,874
Accumulated deficit (307,657,023) (282,104,312)
Total stockholders’ equity 3,007,378,745 3,027,634,647
TOTAL LIABILITIES AND STOCKHOLDERS’ $4,617,079,209 $4,724,788,338
EQUITY
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars)
For the three months ended
September 30, June 30,
2007 2007
Sales 391,397,891 374,829,258
Cost of sales 349,147,976 336,338,574
Gross profit 42,249,915 38,490,684
Operating expenses:
Research and development 25,906,095 23,193,707
General and administrative 23,835,922 14,746,510
Selling and marketing 4,900,813 4,234,048
Amortization of acquired
intangible assets 7,750,931 6,213,171
Loss (Income) from sale of plant and
equipment and other fixed assets 41,576 (1,274,018)
Total operating expenses 62,435,337 47,113,418
Loss from operations (20,185,422) (8,622,734)
Other income (expenses):
Interest income 2,203,909 2,678,460
Interest expense (14,790,753) 3,343,327
Foreign currency exchange gain (loss) 7,722,330 (1,514,169)
Other income, net 522,314 1,577,151
Total other income (expenses), net (4,342,200) 6,084,769
Net loss before income tax, minority
interest, and loss from equity
investment (24,527,622) (2,537,965)
Income tax benefit (expense) (965,676) 1,621,322
Minority interest 859,147 (136,518)
Loss from equity investment (918,560) (1,001,034)
Net loss $(25,552,711)$(2,054,195)
Net loss per share, basic (0.0014) (0.0001)
Net loss per ADS, basic (0.0690) (0.0056)
Net loss per share, diluted (0.0014) (0.0001)
Net loss per ADS, diluted (0.0690) (0.0056)
Ordinary shares used in calculating basic loss
per ordinary share 18,523,392,676 18,476,528,957
Ordinary shares used in calculating diluted
loss per ordinary share 18,523,392,676 18,476,528,957
-- Share-based compensation related to each
account balance as follows:
Cost of sales 2,472,711 2,890,848
Research and development 880,402 1,274,430
General and administrative 427,639 1,291,079
Selling and marketing 875,343 549,542
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars)
For the three months ended
September 30, June 30, 2007
2007
Operating activities
Net loss (25,552,711) (2,054,195)
Adjustments to reconcile net
loss to net cash provided
by (used in) operating activities:
Minority interest (859,147) 136,518
Loss (Gain) on disposal of
plant and equipment 41,576 (1,274,018)
Depreciation and amortization 176,792,146 175,187,932
Amortization of acquired
intangible assets 7,750,931 6,213,171
Share-based compensation 4,656,095 6,005,899
Non cash interest expense on
promissory notes 1,051,275 1,195,552
Loss from equity investment 918,560 1,001,034
Changes in operating
assets and liabilities:
Accounts receivable, net (7,640,924) (12,352,703)
Inventories (16,908,684) (346,549)
Prepaid expense and
other current assets (7,675,557) (52,120)
Accounts payable (7,269,481) (4,132,746)
Accrued expenses and
other current liabilities 16,811,333 (14,740,560)
Income tax payable (108,188) (46,650)
Deferred tax assets (1,545,585) (1,679,557)
Deferred tax liabilities 2,448,807 (62,328)
Net cash provided by
operating activities 142,910,446 152,998,680
Investing activities:
Purchase of plant and
equipment (161,067,992) (159,994,428)
Proceeds from disposal of plant
and equipment 53,182,673 7,926,063
Proceeds received from sale of
assets held for sale 935,393 2,501,868
Purchases of acquired intangible
assets (3,933,399) (3,984,011)
Purchase of short-term
investments (28,807,101) (15,006,035)
Sale of short-term
investments 31,939,688 21,756,260
Net cash used in investing
activities (107,750,738) (146,800,283)
Financing activities:
Proceeds from short-term
borrowing 17,000,000 105,000,000
Proceeds from
long-term debt 12,737,840 --
Repayment of
promissory notes -- (15,000,000)
Repayment of
long-term debt -- (25,438,892)
Repayment of
short-term debt (55,000,000) (40,000,000)
Proceeds from exercise of
employee stock options 691,393 1,031,855
Repurchase of redeemable preference
shares -- (1,000,000)
Net cash provided by (used in)
financing activities (24,570,767) 24,592,963
Effect of exchange
rate changes (50,679) (46,154)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 10,538,262 30,745,206
CASH AND CASH EQUIVALENTS,
beginning of period 372,449,095 341,703,889
CASH AND CASH EQUIVALENTS, end
of period 382,987,357 372,449,095
