All currency figures stated in this report are in US Dollars unless
stated otherwise. 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. 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: Anne Wong Chen Tel: +86-21-3861-0000 x12804 Email:
Edith Kwan Tel: +852-2116-2624 Email: 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
DATASOURCE: Semiconductor Manufacturing International Corporation
CONTACT: Investor Contacts: En-Ling Feng, +86-21-3861 x16275, , or
Anne Wong Chen, +86-21-3861-0000 x12804, , or Edith Kwan,
+852-2116-2624, Web site: http://www.smics.com/
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