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, Oct. 28 /PRNewswire-Asia/ -- 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, 2009.
(Logo: http://www.prnasia.com/sa/200611101605.jpg )
Third Quarter 2009 Highlights:
-- Revenue up by 20.9% to $323.4 million from $267.4 million in 2Q09 and
down by 14.0% compared to 3Q08.
-- 65nm production ramp is on schedule and we expect further increases in
65nm shipment in 4Q09 and into 2010.
-- Wafer revenue from Greater China region grew 33.5% QoQ.
-- Gross margins improved to 0.8% in 3Q09 compared to -4.8% in 2Q09 due to
an increase in wafer shipments and fab utilization.
-- Net cash flow from operations has increased substantially to $73.0
million from $43.2 million in 2Q09.
-- Loss attributable to holders of ordinary shares of US$69.3 million in
3Q09, compared to loss of US$98.2 million in 2Q09.
-- Fully diluted EPS was ($0.1550) per ADS.
Fourth Quarter 2009 Guidance:
The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below.
-- Revenue is expected to increase 2% to 5% QoQ.
-- Operating expenses excluding foreign exchange differences are expected
to range from $67 million to $72 million.
-- Capital expenditures are expected to range from $90 million to $95
million.
-- Depreciation and amortization is expected to be approximately $193
million.
Commenting on the quarterly results, Dr. Richard Chang, Chief Executive Officer of SMIC, remarked, "The third quarter of 2009 displayed a continued foundry market recovery. In the third quarter of 2009, SMIC exceeded its original guidance, achieving about 21% quarter-over-quarter growth in revenue; furthermore, we expect revenue for the fourth quarter of 2009 to continue to grow 2% to 5% quarter-over-quarter. Utilization rose to 87.3% in the third quarter compared to 75.4% in the second quarter. Significant growth was exhibited in consumer sales, which grew 40.6% quarter-over-quarter.
Regionally, Greater China revenue grew by 33.5%, North America sales increased by 16.7%, and European sales increased by 3% quarter-over-quarter. North America maintained the largest contribution to revenue with strong growth in the advanced nodes, while revenue contribution from Greater China increased to 36.6% of total revenue in the third quarter of 2009 compared to 33.2% in the second quarter of 2009 and 31.2% in the third quarter of 2008. In the third quarter of 2009, 80% of our new customers are from the Greater China region.
Our product mix is improving and we are accelerating our advanced node development. We see a shift to higher-end products, as sales from 0.18-um and above are shifting into 0.13-um and below. Our 0.13-um and below wafer revenue reached 52.8% of total wafer revenue in the third quarter of 2009 compared to 46.4% in the second quarter of 2009. In terms of advanced technology development, our 65-nm production ramp is on schedule and with our 65-nm low leakage library and key IPs in place, we expect to continue to ramp up 65-nm shipments in the fourth quarter of 2009 and into 2010. In addition, our 45-nm development is ahead of schedule with multiple customers working with us in various stages of qualification, and we target our first 45-nm product tape-out by the end of this year. We now provide a complete offering for advanced nodes down to 40-nm, and we recently announced the extension of our technology to 55-nm. Moreover, we have started our 32-nm program and have engaged partners and customers in the research and development phase.
Looking into the fourth quarter of 2009, we see improving gross margins on higher revenue with significant growth in the advanced nodes, including 90-nm and 65-nm nodes. Total depreciation and amortization expense is expected to fall considerably in 2010 as most of our Shanghai 8-inch fab equipment fully depreciates. We continue to exercise vigilant cost control and expect our full year capital expenditure to be around $190 million for the current year.
In summary, we continue to strive towards profitability through improving our product mix, advancing our process technology and remaining disciplined in capital expenditure."
Conference Call / Webcast Announcement
Date: October 29, 2009
Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-614-3672 / 1-800-260-8140 or HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2009 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) foundry and technology services at 0.35um to 45nm. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) 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 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 our expectation of a shift to higher-end products, our expectation of a continued ramp up of 65 nm shipments in the fourth quarter of 2009 and into 2010, target timing for our first 45-nm product tape-out, our expectations regarding the amount of our capital expenditures in 2009 and our total depreciation and amortization expense for 2009 and 2010, and statements under "Depreciation and Amortization", "Capex Summary" and "Fourth Quarter 2009 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 downturn in the global economy and the impact on China's economy, intense competition, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to capture growth opportunities in China, SMIC's ability to strengthen its product portfolio, 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 filed with the SEC on June 22, 2009, 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, namely SMIC (Shanghai), SMIC (Beijing) and SMIC (Americas) in the Superior Court of the State of California, County of Alameda for alleged breach of a 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 that 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. The Court has set a trial date of September 8, 2009.
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, namely, 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.
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 a 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.
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 August 6, 2008, the Court granted in part and denied in part TSMC's motion.
On June 23, 2008, the Company filed in the 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 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. On August 8, 2008, the Court granted-in-part TSMC's motion and preliminarily enjoined SMIC from disclosing fourteen 0.30 micron process steps. On October 3, 2008, SMIC filed a notice of appeal of the Court's August 8, 2008 Order with the California Court of Appeal. This appeal is currently pending.
During the pre-trial proceedings in the matter, as noted above under "Overview of TSMC Litigation", questions arose regarding the actual terms of the 2005 Settlement Agreement between SMIC and TSMC. Accordingly, the California Court held a preliminary trial on January 13 to 16, 2009, limited to a determination of the terms of the Settlement Agreement and an interpretation of any requirements to "meet and confer" prior to institution of litigation. On March 10, 2009, the Court issued a Statement of Decision finding, in part, that an agreement between the parties was executed on January 30, 2005, and thereafter amended on February 2, 2005, as urged by TSMC. The Company believes the Court's ruling is erroneous. The ruling may be appealed by SMIC following the filing of a final judgment by the Court in this matter.
On May 1, 2009, the Company filed motions for summary adjudication against TSMC's claims for breach of promissory notes and violation of the California Uniform Trade Secrets Act. On July 20, 2009, the Court denied the Company's motions.
On May 1, 2009, TSMC filed a motion for summary adjudication of various of the Company's affirmative defenses. On July 20, 2009, the Court granted in part and denied in part TSMC's motion. The Company believes the Court's ruling, to the extent it granted in part TSMC's motion, is erroneous. The ruling may be appealed by SMIC following the filing of a final judgment by the Court in this matter.
On August 10, 2009, TSMC moved for sanctions based on the alleged intentional destruction by the Company of certain documentary evidence relevant to the litigation. The Court granted the motion in part, and ruled that as a sanction, the Company's trade secret cross claims will be severed and continued to a separate trial to allow recovery of files from the Company's archival backups. Additionally, the Court has stated it will instruct the jury that it is allowed, but not required, to decide certain issues at trial against the Company on the basis of loss of evidence. The Company believes the order is erroneous. It is appealable only upon the filing of a final judgment in the lawsuit.
On September 8, 2009, jury trial commenced upon all liability issues related to a selected list of TSMC trade secret claims. It is anticipated that the jury will render a verdict in November, 2009. Following the jury's verdict in this trial, the Court is expected to set a trial date for the Company's trade secret misappropriation cross claims against TSMC.
In the Company's action in the Beijing High People's Court, following an unsuccessful challenge to that Court's jurisdiction by TSMC, the Court has held evidentiary hearings on October 15, October 29, and November 25, 2008. The Court rendered its first-instance judgment on June 10, 2009. Claims of SMIC against TSMC were not supported by the Court in the first-instance judgment. SMIC has appealed the first-instance judgment to the PRC Supreme People's Court. The Supreme Court has set a second-instance trial date of November 25, 2009.
Under the provisions of ASC 360-10 (formerly 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. The Company is still evaluating whether or not the litigation represents such an event. The Company cannot predict the outcome of the litigation. However, an adverse judgment on TSMC's claim for breach of contract could result in a termination of the patent license and an adverse judgment on either TSMC's claim for breach of contract or its trade secret misappropriation claim could have a materially adverse affect on the Company's financial position and results of operations. The outcome of any impairment analysis performed under ASC 360-10 might result in a material impact to our financial position and results of operations.
For more information, please contact:
Investor Contacts:
En-Ling Feng
Tel: +86-21-3861 x16275
Email: Enling_Feng@smics.com
Anne Wong Chen
Tel: +86-21-3861-0000 x12804
Email: Anne_CAYW@smics.com
Edith Kwan
Tel: +852-2116-2624
Email: Edith_Kwan@smics.com
Summary of Third Quarter 2009 Operating Results
Amounts in US$ thousands, except for EPS and operating data
3Q09 2Q09 QoQ 3Q08 YoY
Revenue 323,356 267,422 20.9% 375,945 -14.0%
Cost of sales 320,702 280,319 14.4% 348,720 -8.0%
Gross profit (loss) 2,654 (12,897) -- 27,224 -90.3%
Operating expenses 99,184 81,606 21.5% 40,451 145.2%
Loss from operations (96,530) (94,503) 2.1% (13,227) 629.8%
Other expenses, net (3,943) (5,802) -32.0% (15,631) -74.8%
Income tax (expenses)
credit 31,704 2,880 1000.7% (4,499) --
Net loss after
income taxes (68,769) (97,425) -29.4% (33,357) 106.2%
Loss from equity
investment (313) (482) -35.0% (26) 1103.0%
Net loss (69,081) (97,907) -29.4% (33,384) 106.9%
Accretion of interest
to noncontrolling
interest (265) (262) 1.2% 3,094 --
Loss attributable
to Semiconductor
Manufacturing
International
Corporation (69,346) (98,169) -29.4% (30,289) 128.9%
Gross margin 0.8% -4.8% 7.2%
Operating margin -29.9% -35.3% -3.5%
Net loss per
ordinary share
(basic)(1) (0.00) (0.00) (0.00)
Net loss per ADS
(basic) (0.16) (0.22) (0.08)
Net loss per
ordinary share
(diluted) (1) (0.00) (0.00) (0.00)
Net loss per ADS
(diluted) (0.16) (0.22) (0.08)
Wafers shipped (in
8" wafers)(2) 429,843 341,261 26.0 % 431,660 -0.4%
Capacity
utilization 87.3% 75.4% 90.5%
Note:
(1) Based on weighted average ordinary shares of 22,368 million (basic)
and 22,368 million (diluted) in 3Q09, 22,352 million (basic) and
22,352 million (diluted) in 2Q09 and 18,612 million (basic) and
18,612 million (diluted) in 3Q08
(2) Including copper interconnects
-- Revenue increased to $323.4 million in 3Q09, up 20.9% QoQ from $267.4
million in 2Q09 due to a 26.0% increase in wafer shipments.
-- Cost of sales increased to $320.7 million in 3Q09, up 14.4% QoQ from
$280.3 million in 2Q09.
-- Gross profit of $2.7 million in 3Q09, compared to a gross loss of $12.9
million in 2Q09 and gross profit of $27.2 million in 3Q08.
-- Gross margins improved to 0.8% in 3Q09 from -4.8% in 2Q09 primarily due
to an increase in wafer shipments and fab utilization QoQ.
-- Total operating expenses increase to $99.2 million from $81.6 million,
an increase of 21.5% QoQ primarily due to an increase in G&A expenses
(as explained below).
-- R&D expenses increased to $50.0 million in 3Q09, up 3.2% QoQ from $48.5
million due to an increase in 45nm R&D activities.
-- G&A expenses increased to $31.9 million in 3Q09 from $17.2 million in
2Q09 due to an increase in legal fees.
-- Selling & marketing expenses increased to $7.7 million in 3Q09, up
11.4% QoQ from $6.9 million in 2Q09.
-- Income tax credit increased significantly to $31.7 million in 3Q09 from
$2.9 million in 2Q09 due to a substantial increase in the deferred
income tax asset arising from a change in the income tax rate
applicable to certain of our subsidiaries.
Analysis of Revenues
Sales Analysis
By Application 3Q09 2Q09 3Q08
Computer 5.3% 4.3% 5.4%
Communications 46.7% 53.5% 53.0%
Consumer 41.9% 36.1% 32.8%
Others 6.1% 6.1% 8.8%
By Service Type 3Q09 2Q09 3Q08
Logic(1) 90.1% 90.9% 87.4%
DRAM 4.0% 2.7% 2.3%
Mask Making, testing, others 5.9% 6.4% 10.3%
By Customer Type 3Q09 2Q09 3Q08
Fabless semiconductor companies 67.3% 65.1% 55.1%
Integrated device manufacturers (IDM) 16.1% 18.2% 26.1%
System companies and others 16.6% 16.7% 18.8%
By Geography 3Q09 2Q09 3Q08
North America 59.2% 61.4% 58.6%
Greater China(2) 36.6% 33.2% 31.2%
Asia Pacific(3) 2.9% 3.9% 5.5%
Europe 1.3% 1.5% 4.7%
Wafer Revenue Analysis
By Technology 3Q09 2Q09 3Q08
0.065um 0.5% 0.1% 0.0%
0.09um 15.8% 16.6% 19.4%
0.13um 36.5% 29.7% 25.1%
0.15um 2.6% 1.5% 2.0%
0.18um 27.8% 29.8% 33.9%
0.25um 0.6% 0.5% 0.5%
0.35um 16.2% 21.8% 19.1%
Note:
(1) Including 0.13um copper interconnects
(2) Including Hong Kong and Taiwan
(3) Excluding Greater China
-- Wafer revenue from Greater China region grew 33.5% in 3Q09.
-- We expect further ramp-up of 65nm logic shipment in 4Q09 and into 2010.
-- Revenue from advanced technology nodes of 0.13um and below made up
52.8% of overall wafer revenue in 3Q09 as compared to 46.4% in 2Q09.
Capacity*
Fab / (Wafer Size) 3Q09 2Q09
Shanghai Mega Fab (8") 88,000 88,000
Beijing Mega Fab (12") 42,750 40,500
Tianjin Fab (8") 34,300 34,300
Total monthly wafer
fabrication capacity 165,050 162,800
Note:
* Wafers per month at the end of the period in 8" wafers
Shipment and Utilization
8" equivalent wafers 3Q09 2Q09 3Q08
Wafer shipments including
copper interconnects 429,843 341,261 431,660
Utilization rate(1) 87.3% 75.4% 90.5%
Note:
(1) Capacity utilization based on total wafer out divided by estimated
capacity
-- Wafer shipments increased 26.0% QoQ to 429,843 units of 8-inch
equivalent wafers in 3Q09 from 341,261 units of 8-inch equivalent
wafers in 2Q09, and down 0.4% YoY from 431,660 8-inch equivalent wafers
in 3Q08.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands
3Q09 2Q09 QoQ 3Q08 YoY
Cost of sales 320,702 280,319 14.4% 348,721 -8.0%
Depreciation 155,949 146,763 6.3% 165,641 -5.9%
Other
manufacturing
costs 157,843 126,655 24.6% 176,329 -10.5%
Deferred cost
amortization 5,886 5,886 0.0% 5,886 0.0%
Share-based
compensation 1,024 1,015 0.9% 865 18.4%
Gross profit (loss) 2,654 (12,897) -- 27,224 -90.3%
Gross margin 0.8% -4.8% 7.2%
-- Cost of sales increased to $320.7 million in 3Q09, up 14.4% QoQ from
$280.3 million in 2Q09.
-- Gross profit of $2.7 million in 3Q09, compared to a gross loss of $12.9
million in 2Q09 and gross profit of $27.2 million in 3Q08.
-- Gross margins improved to 0.8% in 3Q09 from -4.8% in 2Q09 primarily due
to an increase in wafer shipments and fab utilization QoQ.
Operating Expense Analysis
Amounts in US$ thousands 3Q09 2Q09 QoQ 3Q08 YoY
Total operating expenses 99,184 81,606 21.5% 40,451 145.2%
Research and development 50,003 48,450 3.2% 17,838 180.3%
General and
administrative 31,922 17,196 85.6% 10,761 196.7%
Selling and marketing 7,693 6,905 11.4% 5,578 37.9%
Amortization of
intangible assets 9,535 8,858 7.6% 6,906 38.1%
Loss (income) from
disposal of properties 29 197 -85.3% (632) --
-- Total operating expenses increased to $99.2 million in 3Q09 from $81.6
million, an increase of 21.5% QoQ primarily due to an increase in G&A
expenses.
-- R&D expenses increased to $50.0 million in 3Q09, up 3.2% QoQ from $48.5
million due to an increase in 45nm R&D activities
-- G&A expenses increased to $31.9 million in 3Q09 from $17.2 million in
2Q09 due to an increase in legal fees.
-- Selling & marketing expenses increased to $7.7 million in 3Q09, up
11.4% QoQ from $6.9 million in 2Q09.
Other Income (Expenses)
Amounts in US$ thousands
3Q09 2Q09 QoQ 3Q08 YoY
Other income
(expenses) (3,943) (5,802) -32.0% (15,631) -74.8%
Interest income 634 635 -0.2% 2,542 -75.1%
Interest expense (7,941) (8,386) -5.3% (11,088) -28.4%
Foreign currency
exchange gain (loss) 2,441 219 1014.6% (7,023) --
Other, net 923 1,730 -46.6% (62) --
-- Combined with the foreign exchange difference arising from operating
activities, the Company recorded an overall foreign exchange loss of
$0.5 million in 3Q09 as compared to a foreign exchange loss of $0.8
million in 2Q09.
Depreciation and Amortization
-- Total depreciation and amortization in 3Q09 was $198.9 million compared
to $202.9 million in 2Q09.
Liquidity
Amounts in US$ thousands 3Q09 2Q09
Cash and cash equivalents 453,285 435,613
Restricted cash 20,071 22,580
Short-term investments 6,110 3,313
Accounts receivable 194,202 161,181
Inventories 186,839 183,012
Others 25,896 18,877
Total current assets 886,403 824,575
Accounts payable 175,170 166,699
Short-term borrowings 281,243 273,678
Current portion of long-term debt 249,395 205,344
Others 142,596 144,726
Total current liabilities 848,404 790,447
Cash Ratio 0.5x 0.5x
Quick Ratio 0.7x 0.7x
Current Ratio
Current Ratio 1.0x 1.0x
Capital Structure
Amounts in US$ thousands 3Q09 2Q09
Cash and cash equivalents 453,285 435,613
Restricted cash 20,071 22,580
Short-term investments 6,110 3,313
Current portion of promissory note 29,493 29,242
Promissory note 9,582 9,500
Short-term borrowings 281,243 273,678
Current portion of long-term debt 249,395 205,344
Long-term debt 573,697 615,999
Total debt 1,104,335 1,095,021
Shareholders' equity 2,411,556 2,478,322
Total debt to equity ratio 45.8% 44.2%
Cash Flow
Amounts in US$ thousands 3Q09 2Q09
Net cash from operating activities 72,954 43,198
Net cash from investing activities (64,555) (27,353)
Net cash from financing activities 9,380 (82,191)
Net change in cash 17,672 (66,403)
Capex Summary
-- Capital expenditures for 3Q09 were $52.6 million.
-- Total planned capital expenditures for 2009 is around $190 million.
Recent Highlights and Announcements
-- SMIC Chooses KILOPASS Embedded Non-Volatile Memory (NVM) for its 65NM
and 45NM CMOS Logic Processes (2009-09-25)
-- SMIC Selects VIRAGE LOGIC's AEON@ Embedded Multi-time Programmable (MTP)
Non-Volatile Memory (NVM) for RFID Applications (2009-09-24)
-- Announcement of unaudited interim results for the six months ended June
30, 2009 (2009-09-21)
-- SMIC Releases Presentation Materials from its Analyst Day on September
15, 2009 (2009-09-18)
-- Notification of Board Meeting (2009-09-04)
-- Election of Means of Receipt and Language of Corporate Communications
(2009-08-04)
-- SMIC Reports Results for the Three Months Ended June 30, 2009
(2009-07-28)
-- SMIC 130nm Process Used in Commercial Production of Display Link USB
Graphics Chips (2009-07-27)
-- Magma Announces Support for SMIC Processes with 65-nm Low-Power
Reference Flow (2009-07-20)
-- Notification of Board Meeting (2009-07-10)
Please visit SMIC's website at
http://www.smics.com/website/enVersion/Press_Center/newsRelease.ftl
for further details regarding the recent announcements.
Semiconductor Manufacturing International Corporation
CONSOLIDATED BALANCE SHEET
(In US dollars, except per share data)
As of
September 30, 2009 June 30, 2009
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents 453,284,870 435,613,297
Restricted Cash 20,070,776 22,579,630
Short-term investments 6,110,231 3,312,592
Accounts receivable, net of
allowances of $6,509,798 and
$5,637,336 on September 30 and June
30, 2009, respectively 194,202,163 161,181,170
Inventories 186,839,459 183,011,768
Prepaid expense and other current
assets 25,895,689 18,876,474
Total current assets 886,403,188 824,574,931
Prepaid land use rights 78,486,074 78,860,359
Plant and equipment, net 2,478,950,867 2,625,371,271
Acquired intangible assets, net 192,778,696 184,845,479
Deferred cost, net 29,432,198 35,318,637
Equity investment 9,962,419 10,275,172
Other long-term prepayments 551,535 825,389
Long-term receivable 131,205,267 131,072,053
Deferred tax assets 93,163,395 57,250,700
TOTAL ASSETS 3,900,933,639 3,948,393,991
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 175,169,952 166,698,508
Accrued expenses and other current
liabilities 109,116,249 114,632,973
Short-term borrowings 281,242,502 273,678,075
Current portion of promissory note 29,492,873 29,242,001
Current portion of long-term debt 249,395,373 205,343,559
Income tax payable 3,986,995 851,539
Total current liabilities 848,403,944 790,446,655
Long-term liabilities:
Promissory notes 9,581,864 9,500,358
Long-term debt 573,696,518 615,998,747
Long-term payables relating to
license agreements 16,674,534 16,488,420
Other long-term liabilities 6,000,000 3,000,000
Deferred tax liabilities 453,205 335,577
Total long-term liabilities 606,406,121 645,323,102
Total liabilities 1,454,810,065 1,435,769,757
Noncontrolling interest 34,567,186 34,302,529
Stockholders' equity:
Ordinary shares, $0.0004 par value,
50,000,000,000 shares authorized,
22,366,133,058 and 22,353,411,672
shares issued and outstanding on
September 30 and June 30, 2009,
respectively 8,946,454 8,941,365
Additional paid-in capital 3,497,010,545 3,494,327,734
Accumulated other comprehensive
(loss) income (8,293) 98,945
Accumulated deficit (1,094,392,318) (1,025,046,339)
Total stockholders' equity 2,411,556,388 2,478,321,705
TOTAL LIABILITIES, NONCONTROLLING
INTEREST AND STOCKHOLDERS' EQUITY 3,900,933,639 3,948,393,991
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars, except per share data)
For the three months ended
September 30, 2009 June 30, 2009
(Unaudited) (Unaudited)
Sales 323,355,915 267,422,419
Cost of sales 320,702,261 280,318,656
Gross profit (loss) 2,653,654 (12,896,237)
Operating expenses:
Research and development 50,003,000 48,450,248
General and administrative 31,922,632 17,195,574
Selling and marketing 7,693,241 6,904,892
Amortization of acquired intangible
assets 9,535,274 8,858,012
Loss from sale of equipment and
other fixed assets 29,475 196,980
Total operating expenses, net 99,183,622 81,605,706
Loss from operations (96,529,968) (94,501,943)
Other income (expense):
Interest income 633,879 634,737
Interest expense (7,941,202) (8,386,025)
Foreign currency exchange gain 2,441,374 219,319
Others, net 923,152 1,730,404
Total other expense, net (3,942,797) (5,801,565)
Loss before income tax (100,472,765) (100,303,508)
Income tax benefit 31,704,196 2,880,291
Loss from equity investment (312,752) (481,605)
Net loss (69,081,321) (97,904,822)
Accretion of interest to
noncontrolling interest (264,658) (261,781)
Loss attributable to Semiconductor
Manufacturing International Corporation (69,345,979) (98,166,603)
Net loss per share attributable to
Semiconductor Manufacturing
International Corporation ordinary
shareholders, basic and diluted (0.0031) (0.0044)
Net loss per ADS attributable to
Semiconductor Manufacturing
International Corporation ordinary
shareholders, basic and diluted (0.1550) (0.2196)
Shares used in calculating basic and
diluted loss per share 22,368,419,207 22,352,477,317
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars)
For the three months ended
September 30, 2009 June 30, 2009
(Unaudited) (Unaudited)
Operating activities:
Net Loss (69,081,321) (97,904,822)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Deferred taxes (35,795,067) (5,319,471)
Loss from sale of equipment and
other fixed assets 29,475 196,980
Depreciation and amortization 186,777,756 191,368,626
Non-cash interest expense on
promissory note and long-term
payable relating to license
agreements 736,747 992,974
Amortization of acquired intangible
assets 9,535,274 8,858,012
Share-based compensation 2,622,067 2,630,178
Loss from equity investment 312,752 481,605
Changes in operating assets and
liabilities:
Accounts receivable, net (33,020,992) (77,071,568)
Long-term receivable (133,214) (4,966,252)
Inventories (3,827,691) (28,228,273)
Prepaid expense and other current
assets (6,745,362) 6,474,752
Accounts payable (1,498,671) 39,046,117
Accrued expenses and other current
liabilities 16,907,154 3,255,592
Other long-term liabilities 3,000,000 3,000,000
Income tax payable 3,135,456 383,671
Net cash provided by operating
activities 72,954,363 43,198,121
Investing activities:
Purchase of plant and equipment (51,439,333) (44,759,433)
Proceeds from government grant to
purchase plant and equipment 19,692,334 14,544,928
Proceeds from sale of equipment 779,075 (191,827)
Proceeds received from sale of
assets held for sale -- (26,201)
Purchase of acquired intangible
assets (33,298,688) (2,987,788)
Purchase of short-term investments (6,027,164) (5,648,618)
Sale of short-term investments 3,229,525 23,067,587
Change in restricted cash 2,508,855 (11,351,889)
Net cash used in investing activities (64,555,396) (27,353,241)
Financing activities:
Proceeds from short-term borrowings 153,106,179 215,404,493
Repayment of short-term borrowings (145,541,751) (211,804,669)
Proceeds from long-term debt 51,749,585 --
Repayment of long-term debt (50,000,000) (70,827,750)
Repayment of promissory note -- (15,000,000)
Proceeds from exercise of employee
stock options 65,832 37,245
Net cash provided by (used in) financing
activities 9,379,845 (82,190,681)
Effect of exchange rate changes (107,239) (56,759)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 17,671,573 (66,402,560)
CASH AND CASH EQUIVALENTS, beginning
of period 435,613,297 502,015,857
CASH AND CASH EQUIVALENTS, end of
period 453,284,870 435,613,297
For the complete Chinese version of "SMIC Reports 2009 Third Quarter Results," please visit: http://www.prnasia.com/sa/attachment/2009/10/20091028175218.pdf
