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SMIC posts sixth consecutive quarterly loss

Posted: 02 May 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Mark LaPedus? foundry? Semiconductor Mfg International? SMIC? NAND flash?

Chinese silicon foundry provider Semiconductor Mfg International Corp. (SMIC) reported its sixth consecutive quarterly loss late last week despite growing sales and a push into new foundry markets, including NAND flash and solar.

SMIC said its net loss decreased to $8.7 million in the first quarter of 2006, compared to a net loss of $15 million in the fourth quarter of 2005 and a deficit of $30 million in the like period a year ago.

Over the last six quarters, SMIC has lost a total of $131.4 million. Sales, meanwhile, increased 5.4 percent in the first quarter of 2006 to $351.1 million from $333.1 million in the prior quarter. In the like period a year ago, SMIC posted sales of $248.8 million.

The company reported a utilization rate of 95 percent in the first quarter of 2006, compared to 93 percent in the previous period and 85 percent a year ago.

Wafer shipments increased to 388,010 units of 8-inch equivalent wafers in 1Q 2006, up 3.1 percent from 376,227 units of 8-inch equivalent wafers in 4Q 2005, and up 36.2 percent from 284,912 8-inch equivalent wafers in 1Q 2005.

''I am pleased to announce that our performance during the first quarter exceeded our expectations as quarterly revenues continued to increase to $351 million during the first quarter helping to narrow our operating loss to $6 million in the first quarter,'' said Richard Chang, president and chief executive, in a statement.

''Our revenues from 0.13?m and below technologies increased to 47 percent of total revenues in the first quarter," he said. "Revenues generated from 0.15?m and 0.13?m and below logic products as a percentage of our logic revenues significantly increased to 14.5 percent and 13.3 percent in the first quarter from 8.6 percent and 10.9 percent in the fourth quarter. We expect that these trends will continue as we have received a significant increase in 0.13?m full flow orders and as we commence commercial production for our first 90nm product."

For 2006, total planned capital expenditures will be approximately $1.1 billion and will be adjusted based on market conditions. Revenues for Q2 are expected to increase by 2-to-5 percent over 1Q 2006. Utilization rate for Q2 is expected to be approximately 93-to-95.

SMIC claimed its NAND flash development team has successfully taped out a 2-gigabit NAND flash product during the first quarter. The development remains on schedule to deliver the first engineering samples in June and we target commercial production of this product in the fourth quarter of 2006.

The company's Chengdu project began commercial production during the first quarter, allowing SMIC to now offer in-house turn-key IC manufacturing for our customers.

In 2005, SMIC topped Singapore's Chartered Semiconductor Mfg Pte. Ltd for third place in the worldwide silicon foundry rankings in 2005, according to the rankings from Gartner Dataquest Inc.

- Mark LaPedus
EE Times

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