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.
(Logo: www.newscom.com/cgi-bin/prnh/20090727/SMICLOGO ) Second Quarter 2009 Highlights: -- Revenue up by 82.5% to $267.4 million from $146.5 million in 1Q09 and down by 22.0% compared to 2Q08. Specifically, advanced logic sales from 0.13 micron and 90 nanometer nodes have significantly increased by 135.3% quarter-over-quarter in the second quarter of 2009. -- Gross margins improved to -4.8% in 2Q09 compared to -88.3% in 1Q09 due to a significant increase in wafer shipments and fab utilization. -- Loss attributable to holders of ordinary shares of $98.1 million in 2Q09, compared to a loss of $178.3 million in 1Q09. -- Fully diluted EPS was ($0.2196) per ADS. Third Quarter 2009 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" below.
-- Revenue is expected to increase 14% to 18% QoQ.
-- Operating expenses excluding foreign exchange difference are expected
to range from $90 million to $93 million.
-- Capital expenditures expected to range from $60 million to $65 million.
-- Depreciation and amortization expected to be around $199 million to
$201 million.
Commenting on the quarterly results, Dr. Richard Chang, Chief Executive Officer of SMIC, remarked, "In the second quarter of 2009, we witnessed strong business recovery on all fronts. Total revenue increased 82.5% quarter-over-quarter, exceeding our originally stated guidance. Our utilization rate increased to 75% in the second quarter as our logic shipments increased by 102% quarter-over-quarter. Advanced logic revenue for 0.13-micron and below grew by more than 135% from the first quarter of 2009, increasing to 41% as a portion of total revenue from 32% in the first quarter. This significant recovery was driven largely by our customers' strong performances in the communications and consumer segments. Our book-to-bill ratio has been greater than one in the past five consecutive months and new tape outs in the second quarter reached a record high for the last six quarters and are up 58.5% from the first quarter of 2009, preliminarily indicating a sustained recovery.
"Second quarter recovery was fueled by recovered customer demand across all regions and robust end demand in Asian markets. Regionally, our Greater China revenue in the second quarter increased by 87.4%, and North America revenue increased by 85.3% quarter-over-quarter. We also saw a healthy increase in our Europe sales this quarter.
"In terms of advanced technology development, we have already commenced risk production on our 65nm low-power process in the beginning of the third quarter. In addition, our 45nm low-power technology qualification process is on schedule with products from multiple customers under development, and we plan to pass full-scale technology qualification by the fourth quarter of 2009. Moreover, we have achieved successful completion of our first 45nm high performance GP yield lot, enabling us to further serve our customers with competitive advanced technology. Moving forward, we are confident that our continual efforts to strengthen our technology and overall product mix will lead us to a better position for profitability.
"We have maintained a positive EBITDA margin throughout this global economic cyclical downturn. We have also continued to exercise tight control over capital expenditures and enhance our financial position. For the six-month period ended June 30, 2009, we have spent in total $44.9 million on capital expenditures while for the same period, we have generated $121.3 million net cash from operations. Our $190 million annual capital expenditure budget is unchanged. With tight discipline over capital expenditures, we forecast that total depreciation and amortization expense will decline around 13% year-on-year in 2010.
"As our customer orders remain strong, we see current momentum for recovery to continue in the third quarter with double-digit revenue growth over the second quarter of 2009. We remain vigilant on our cost controls and continue to focus on enhancing our product portfolio, and commit to strengthening our operational and financial performances on all fronts as we strive toward our goal of achieving profitability."
Conference Call / Webcast Announcement
Date: July 29, 2009
Time: 8:00 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 second 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 (NYSE: SMI) 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 whether a sustained recovery in the economy has begun, SMIC's plan to pass full-scale technology qualification for our 45nm low-power process by the fourth quarter of 2009, SMIC's ability to strengthen our technology and overall product mix, SMIC's expectations regarding the amount of its capital expenditures in 2009, SMIC's forecasted decline in total depreciation and amortization expense year-on-year in 2010, current momentum for continued recovery in the third quarter with double-digit revenue growth, and statements under "Depreciation and Amortization", "Capex Summary" and "Third 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 strengthen its technology and overall product mix, 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. The motions were heard by the Court on July 17, 2009. On July 20, 2009, the Court denied the Company's motions.
The California Court has further scheduled a trial upon all liability issues related to a selected list of TSMC trade secret claims and SMIC trade secret claims to commence on September 8, 2009.
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.
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 discovery 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 discovery stage, the Company is unable to evaluate the likelihood of an unfavourable outcome or to estimate the amount or range of potential loss.
Summary of Second Quarter 2009 Operating Results
Amounts in US$ thousands, except for EPS and operating data
2Q09 1Q09 QoQ 2Q08 YoY
Revenue 267,422 146,519 82.5% 342,919 -22.0%
Cost of sales 280,319 275,900 1.6% 322,077 -13.0%
Gross profit (loss) (12,897) (129,381) -90.0% 20,842 --
Operating expenses 81,606 46,681 74.8% 60,750 34.3%
Loss from operations (94,503) (176,062) -46.3% (39,908) 136.8%
Other expenses, net (5,802) (4,480) 29.5% (5,193) 11.7%
Income tax (expenses)
credit 2,880 3,305 -12.8% (2,046) --
Net loss after income
taxes (97,425) (177,238) -45.0% (47,147) 106.6%
Loss from equity
investment (482) (874) -44.9% (85) 467.1%
Net loss (97,907) (178,111) -45.0% (47,232) 107.3%
Accretion of interest to
non-controlling interest
holder (262) (259) 1.1% 1,603 --
Loss attributable to
holders of
ordinary shares (98,169) (178,370) -45.0% (45,629) 115.1%
Gross margin -4.8% -88.3% 6.1%
Operating margin -35.3% -120.2% -11.6%
Net loss per ordinary
share (basic)(1) (0.00) (0.01) (0.00)
Net loss per ADS (basic) (0.22) (0.40) (0.12)
Net loss per ordinary
share (diluted)(1) (0.00) (0.01) (0.00)
Net loss per ADS
(diluted) (0.22) (0.40) (0.12)
Wafers shipped (in 8"
wafers)(2) 341,261 168,682 102.3% 402,114 -15.1%
Capacity utilization 75.4% 34.9% 92.2%
Note:
(1) Based on weighted average ordinary shares of 22,352 million (basic)
and 22,352 million (diluted) in 2Q09, 22,344 million (basic) and
22,344 million (diluted) in 1Q09 and 18,589 million (basic) and
18,589 million (diluted) in 2Q08
(2) Including copper interconnects
-- Revenue increased to $267.4 million in 2Q09, up 82.5% QoQ from $146.5
million in 1Q09 due to a 102.3% increase in wafer shipments.
-- Cost of sales increased to $280.3 million in 2Q09, up 1.6% QoQ from
$275.9 million in 1Q09.
-- Gross loss reduced to $12.9 million in 2Q09, compared to a gross loss
of $129.4 million in 1Q09 and gross profit of $20.8 million in 2Q08.
-- Gross margins improved to -4.8% in 2Q09 from -88.3% in 1Q09 primarily
due to a significant increase in wafer shipments and fab utilization
QoQ.
-- Total operating expenses increased to $81.6 million from $46.7 million,
an increase of 74.8% QoQ.
-- R&D expenses increased to $48.5 million in 2Q09, up 162.0% QoQ from
$18.5 million since no substantial government subsidies were received
in 2Q09. Excluding the government subsidies, R&D expenses increased by
$7.4 million, representing an 18.0% increase QoQ due to higher expenses
related to 45nm and other R&D activities.
-- G&A expenses increased to $17.2 million in 2Q09 from $14.9 million in
1Q09 due to a foreign exchange gain of $5.9 million associated with
operating activities recorded in 1Q09. Excluding the foreign exchange
difference, G&A expenses were reduced by $4.7 million, representing a
22.5% decrease QoQ.
-- Selling & marketing expenses increased to $6.9 million in 2Q09, up
64.1% QoQ from $4.2 million in 1Q09 due to an increase in selling
expenses.
Analysis of Revenues
Sales Analysis
By Application 2Q09 1Q09 2Q08
Computer 4.3% 4.2% 7.9%
Communications 53.5% 50.9% 51.1%
Consumer 36.1% 32.9% 32.4%
Others 6.1% 12.0% 8.6%
By Service Type 2Q09 1Q09 2Q08
Logic(1) 90.9% 85.3% 85.7%
DRAM 2.7% 2.8% 3.6%
Mask Making, testing, others 6.4% 11.9% 10.7%
By Customer Type 2Q09 1Q09 2Q08
Fabless semiconductor companies 65.1% 70.9% 54.6%
Integrated device manufacturers (IDM) 18.2% 11.4% 25.7%
System companies and others 16.7% 17.7% 19.7%
By Geography 2Q09 1Q09 2Q08
North America 61.4% 60.4% 55.1%
Greater China(2) 33.2% 32.3% 31.4%
Asia Pacific(3) 3.9% 5.2% 6.9%
Europe 1.5% 2.1% 6.6%
Wafer Revenue Analysis
By Technology (logic, DRAM & copper 2Q09 1Q09 2Q08
interconnect only)
0.065um 0.1% 0.1% 0.0%
0.09um 16.6% 8.1% 18.4%
0.13um 29.7% 30.8% 22.9%
0.15um 1.5% 0.8% 2.1%
0.18um 29.8% 31.5% 37.7%
0.25um 0.5% 0.4% 0.6%
0.35um 21.8% 28.3% 18.3%
Note:
(1) Including 0.13um copper interconnects
(2) Including Hong and Taiwan
(3) Excluding Greater China
Capacity*
Fab / (Wafer Size) 2Q09 1Q09
Shanghai Mega Fab (8") 88,000 85,000
Beijing Mega Fab (12") 40,500 33,750
Tianjin Fab (8") 34,300 32,000
Total monthly wafer fabrication capacity 162,800 150,750
Note:
* Wafers per month at the end of the period in 8" wafers
-- The increase in fab capacity during the quarter resulted from an
improvement in overall fab production efficiency.
Shipment and Utilization
8" equivalent wafers 2Q09 1Q09 2Q08
Wafer shipments including
copper interconnects 341,261 168,682 402,114
Utilization rate(1) 75.4% 34.9% 92.2%
Note:
(1) Capacity utilization based on total wafer out divided by estimated
capacity
-- Wafer shipments increased 102.3% QoQ to 341,261 units of 8-inch
equivalent wafers in 2Q09 from 168,682 units of 8-inch equivalent
wafers in 1Q09, and down 15.1% YoY from 402,114 8-inch equivalent
wafers in 2Q08.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands 2Q09 1Q09 QoQ 2Q08 YoY
Cost of sales 280,319 275,900 1.6% 322,077 -13.0%
Depreciation 146,763 158,000 -7.1% 153,783 -4.6%
Other manufacturing
costs 126,655 111,166 13.9% 160,938 -21.3%
Deferred cost
amortization 5,886 5,886 0.0% 5,886 0.0%
Share-based compensation 1,015 848 19.7% 1,470 -31.0%
Gross profit (loss) (12,896) (129,381) -90.0% 20,842 --
Gross margin -4.8% -88.3% 6.1%
-- Cost of sales increased to $280.3 million in 2Q09, up 1.6% QoQ from
$275.9 million in 1Q09.
-- Gross loss reduced to $12.9 million in 2Q09, compared to a gross loss
of $129.4 million in 1Q09 and gross profit of $20.8 million in 2Q08.
-- Gross margins improved to -4.8% in 2Q09 from -88.3% in 1Q09 primarily
due to an increase in wafer shipments and fab utilization QoQ.
Operating Expense Analysis
Amounts in US$ thousands 2Q09 1Q09 QoQ 2Q08 YoY
Total operating expenses 81,606 46,681 74.8% 60,750 34.3%
Research and development 48,450 18,494 162.0% 37,684 28.6%
General and administrative 17,196 14,928 15.2% 13,328 29.0%
Selling and marketing 6,905 4,208 64.1% 4,356 58.5%
Amortization of intangible
assets 8,858 9,031 -1.9% 6,898 28.4%
Loss (income) from disposal
of properties 197 20 861.7% (1,517) --
-- Total operating expenses increased to $81.6 million in 2Q09 from $46.7
million, an increase of 74.8% QoQ.
-- R&D expenses increased to $48.5 million in 2Q09, up 162.0% QoQ from
$18.5 million since no substantial government subsidies were received
in 2Q09. Excluding the government subsidies, R&D expenses increased by
$7.4 million, representing an 18.0% increase QoQ due to higher expenses
related to 45nm and other R&D activities.
-- G&A expenses increased to $17.2 million in 2Q09 from $14.9 million in
1Q09 due to a foreign exchange gain of $5.9 million associated with
operating activities recorded in 1Q09. Excluding the effect from the
foreign exchange difference, G&A expenses were reduced by $4.7 million,
representing a 22.5% decrease QoQ.
-- Selling & marketing expenses increased to $6.9 million in 2Q09, up
64.1% QoQ from $4.2 million in 1Q09 due to an increase in selling
expenses.
Other Income (Expenses)
Amounts in US$ thousands 2Q09 1Q09 QoQ 2Q08 YoY
Other income (expenses) (5,802) (4,480) 29.5% (5,193) 11.7%
Interest income 635 436 45.5% 4,059 -84.4%
Interest expense (8,386) (5,498) 52.5% (15,279) -45.1%
Foreign currency exchange
gain (loss) 219 (357) -- 2,478 -91.2%
Other, net 1,730 939 84.2% 3,549 -51.3%
-- Overall interest expense increased in 2Q09 due to lower interest
subsidies received from local governments during the quarter.
-- Combined with the foreign exchange difference arising from operating
activities, the Company recorded an overall foreign exchange loss of
$0.8 million in 2Q09 as compared to a foreign exchange gain of $5.5
million in 1Q09.
Depreciation and Amortization
-- Total depreciation and amortization in 2Q09 was $202.9 million compared
to $207.8 million in 1Q09.
Liquidity
Amounts in US$ thousands 2Q09 1Q09
Cash and cash equivalents 435,613 502,016
Restricted cash 22,580 11,228
Short term investments 3,313 20,732
Accounts receivable 236,413 156,177
Inventory 183,012 154,783
Others 74,717 78,728
Total current assets 955,648 923,664
Accounts payable 166,699 135,352
Short-term borrowings 273,678 270,078
Current portion of long-term debt 205,344 359,080
Others 147,726 144,146
Total current liabilities 793,447 908,656
Cash Ratio 0.5x 0.5x
Quick Ratio 0.8x 0.7x
Current Ratio 1.2x 1.0x
Capital Structure
Amounts in US$ thousands 2Q09 1Q09
Cash and cash equivalents 435,613 502,016
Restricted cash 22,580 11,228
Short-term investment 3,313 20,732
Current portion of promissory note 29,242 29,493
Promissory note 9,500 23,792
Short-term borrowings 273,678 270,078
Current portion of long-term debt 205,344 359,080
Long-term debt 615,999 533,090
Total debt 1,095,021 1,162,248
Shareholders' equity 2,478,322 2,573,891
Total debt to equity ratio 44.2% 45.2%
-- With the strong support from our relationship banks, we have
successfully refinanced the remaining $300 million long-term loan for
our Beijing subsidiary during the quarter and extended the loan
maturity by two and a half years.
Cash Flow
Amounts in US$ thousands 2Q09 1Q09
Net cash from operating activities 43,198 78,117
Net cash from investing activities (27,353) (81,785)
Net cash from financing activities (82,191) 54,846
Net change in cash (66,403) 51,786
Capex Summary
-- Capital expenditures for 2Q09 were $21 million. For the six-month
period ended on June 30, 2009, the total capital expenditure was $44.9
million.
-- Total planned capital expenditures for 2009 will be approximately $190
million and will be adjusted based on market conditions.
Recent Highlights and Announcements
-- SMIC Achieves Silicon Success with High Performance 45-nanometer
Process [2009-06-30]
-- SMIC Revises Up Second Quarter 2009 Quarter-on-Quarter Revenue Guidance
[2009-06-29]
-- SMIC and Synopsys Announce the Availability of Reference Flow 4.0
[2009-06-24]
-- Change in Directorate and Change of Chairman [2009-06-23]
-- Annual General Meeting Held on June 23rd, 2009 Poll Results [2009-06-23]
-- Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [2009-06-22]
-- SMIC Deploys Synopsys HSPICE Simulator for 45-nm Physical IP and
Standard Cell Development [2009-06-4]
-- Closure of Register of Members [2009-06-03]
-- SMIC Announces Availability of 65-nanometer Low Leakage Process IP
Portfolio [2009-05-15]
-- Grant of Options [2009-05-11]
-- SMIC Reports Results for the Three Months Ended March 31, 2009
[2009-04-29]
-- Notice of Annual General Meeting [2009-04-27]
-- 2008 Annual Report [2009-04-27]
-- SMIC Circular [2009-04-27]
-- Non-exempt Continuing Connected Transactions With Datang [2009-04-17]
-- Announcements of 2008 Annual Results [2009-04-17]
-- SMIC and Dolphin Integration announce strategic partnership for
Portable Media Players [2009-04-17]
-- Notification of Board Meeting [2009-04-16]
-- Notification of Approval of the Publication of 2008 Annual Results by
the Board [2009-04-03]
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
CONSOLIDATED BALANCE SHEET
(In US dollars)
As of the end of
June 30, 2009 March 31, 2009
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents 435,613,297 502,015,857
Restricted Cash 22,579,630 11,227,741
Short-term investments 3,312,592 20,731,562
Accounts receivable, net of allowances
of $5,637,336 and $5,870,986 at June 30
and March 31, 2009, respectively 236,412,588 156,177,160
Inventories 183,011,768 154,783,494
Prepaid expense and other current assets 53,276,615 57,287,558
Receivable for sale of manufacturing
equipment 21,440,494 21,440,494
Total current assets 955,646,984 923,663,866
Prepaid land use rights 78,860,359 79,234,650
Plant and equipment, net 2,625,371,271 2,792,875,058
Acquired intangible assets, net 184,845,479 191,028,492
Deferred cost, net 35,318,637 41,205,077
Equity investment 10,275,172 10,756,777
Other long-term prepayments 825,389 1,486,807
Deferred tax assets 57,250,700 51,969,380
TOTAL ASSETS 3,948,393,991 4,092,220,107
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 166,698,508 135,351,888
Accrued expenses and other current
liabilities 117,632,973 114,185,387
Short-term borrowings 273,678,075 270,078,251
Current portion of promissory note 29,242,001 29,492,873
Current portion of long-term debt 205,343,559 359,079,883
Income tax payable 851,539 467,869
Total current liabilities 793,446,655 908,656,151
Long-term liabilities:
Promissory notes 9,500,358 23,792,341
Long-term debt 615,998,747 533,090,173
Long-term payables relating to
license agreements 16,488,420 18,375,736
Deferred tax liabilities 335,577 373,727
Total long-term liabilities 642,323,102 575,631,977
Total liabilities 1,435,769,757 1,484,288,128
Non-Controlling interest 34,302,529 34,040,748
Commitments
Stockholders' equity:
Ordinary shares, $0.0004 par value,
50,000,000,000 shares authorized, shares
issued and outstanding 22,353,411,672
and 22,350,521,609 at June 30 and
March 31, 2009, respectively 8,941,365 8,940,209
Additional paid-in capital 3,494,327,734 3,491,661,468
Accumulated other comprehensive
(loss) income 98,945 169,290
Accumulated deficit (1,025,046,339) (926,879,736)
Total stockholders' equity 2,478,321,705 2,573,891,231
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 3,948,393,991 4,092,220,107
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars)
For the three months ended
June 30, 2009 March 31, 2009
(Unaudited) (Unaudited)
Sales 267,422,419 146,518,884
Cost of sales 280,318,656 275,899,824
Gross loss (12,896,237) (129,380,940)
Operating expenses:
Research and development 48,450,248 18,494,784
General and administrative 17,195,574 14,927,735
Selling and marketing 6,904,892 4,207,593
Amortization of acquired intangible assets 8,858,012 9,030,614
Loss from sale of equipment and other
fixed assets 196,980 20,484
Total operating expenses, net 81,605,706 46,681,210
Loss from operations (94,501,943) (176,062,150)
Other income (expense):
Interest income 634,737 436,294
Interest expense (8,386,025) (5,498,154)
Foreign currency exchange gain (loss) 219,319 (357,034)
Others, net 1,730,404 938,969
Total other expense, net (5,801,565) (4,479,925)
Loss before income tax (100,303,508) (180,542,075)
Income tax benefit 2,880,291 3,304,513
Loss from equity investment (481,605) (873,513)
Net loss (97,904,822) (178,111,075)
Accretion of interest to non-controlling
interest holder (261,781) (258,904)
Loss attributable to holders of ordinary
shares (98,166,603) (178,369,979)
Net loss per share, basic (0.0044) (0.0080)
Net loss per ADS, basic (0.2196) (0.3992)
Net loss per share, diluted (0.0044) (0.0080)
Net loss per ADS, diluted (0.2196) (0.3992)
Shares used in calculating basic
loss per share 22,352,477,317 22,343,640,476
Shares used in calculating diluted loss
per share 22,352,477,317 22,343,640,476
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars)
For the three months ended
June 30, 2009 March 31, 2009
(Unaudited) (Unaudited)
Operating activities:
Net Loss (97,904,822) (178,111,075)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Deferred taxes (5,319,471) (6,321,059)
Loss from sale of equipment and other
fixed assets 196,980 20,484
Depreciation and amortization 191,368,626 196,535,950
Non-cash interest expense on promissory
note and long-term payable relating to
license agreements 992,974 1,046,426
Amortization of acquired intangible assets 8,858,012 9,030,614
Share-based compensation 2,630,178 2,272,359
Loss from equity investment 481,605 873,513
Changes in operating assets and liabilities:
Accounts receivable, net (80,235,429) 43,194,535
Inventories (28,228,273) 16,853,373
Prepaid expense and other current assets 4,672,361 (579,942)
Accounts payable 39,046,117 (6,456,221)
Accrued expenses and other current
liabilities 6,255,592 (158,281)
Income tax payable 383,671 (84,138)
Net cash provided by operating
activities 43,198,121 78,116,538
Investing activities:
Purchase of plant and equipment (44,759,433) (72,018,394)
Proceeds from government grant to
purchase plant and
equipment 14,544,928 6,437,831
Proceeds from sale of equipment (191,827) 1,700,577
Proceeds received from sale of assets
held for sale (26,201) 770,931
Purchase of acquired intangible assets (2,987,788) (12,621,260)
Purchase of short-term investments (5,648,618) (31,496,963)
Sale of short-term investments 23,067,587 30,693,690
Change in restricted cash (11,351,889) (4,972,928)
Purchase of equity investment -- (278,103)
Net cash used in investing activities (27,353,241) (81,784,619)
Financing activities:
Proceeds from short-term borrowings 215,404,493 182,644,921
Repayment of short-term borrowings (211,804,669) (113,824,443)
Repayment of long-term debt (70,827,750) (4,977,014)
Repayment of promissory note (15,000,000) --
Proceeds from exercise of employee stock
options 37,245 15,937
Redemption of non-controlling interest -- (9,013,444)
Net cash provided by (used in) financing
activities (82,190,681) 54,845,957
Effect of exchange rate changes (56,759) 608,412
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (66,402,560) 51,786,288
CASH AND CASH EQUIVALENTS, beginning of
period 502,015,857 450,229,569
CASH AND CASH EQUIVALENTS, end of period 435,613,297 502,015,857
For more information, please contact:
Investor Contacts:
En-Ling Feng
Tel: +86-21-3861-0000 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
SOURCE Semiconductor Manufacturing International Corporation
Web site: http://www.smics.com//