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 March 31, 2014.
First Quarter 2014 Highlights
- Revenue was $451.1 million in 1Q14, a decrease of 8.3% quarter over quarter.
- Non-GAAP revenue excluding wafer shipments from Wuhan Xinxin was $451.1 million in 1Q14, a decrease of 6.7 % quarter over quarter.
- Gross margin was 21.3% in 1Q14, compared to 18.9% in 4Q13.
- Non-GAAP gross margin excluding wafer shipments from Wuhan Xinxin was 21.3% in 1Q14, compared to 19.2% in 4Q13.
- Profit for the period attributable to SMIC was $20.3 million in 1Q14, compared to $14.7 million in 4Q13.
Second Quarter 2014 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 be up from 12% to 15% quarter over quarter.
- Gross margin is expected to range from 22% to 24%.
- Non-GAAP operating expenses excluding the effect of employee bonus accrual, funding of R&D contracts from the government and gain from the disposal of living quarters are expected to range from $89 million to $93 million.
Dr. Tzu-Yin Chiu, SMIC's Chief Executive Officer and Executive Director, commented, "We are excited to see that our overall profitability has improved despite hitting a seasonal trough in the first quarter, which is our eighth consecutive profitable quarter. When comparing Q1 2014 to Q4 2013, gross margin increased 2.4 percentage points, profit from operations more than tripled, and profit attributable to SMIC grew 38%; meanwhile, our capital structure also improved as our debt to equity ratio decreased 6.7 percentage points.
We are happy to announce that we received our first 28nm tape-out from one of our customers and we continue to target pilot production for 28nm by the end of 2014, and ramp-up and revenue generation in 2015.
When looking at our differentiated products, we have made good progress in fingerprint sensor technology and CMOS-MEMS technology, which are both now in production.
We are also excited to announce that we have secured some used equipment for our Shenzhen fab, and we target 10-thousand-wafers-per-month capacity installed in Shenzhen by the end of this year and production in 2015.
We have improved our profitability and, as is reflected in our guidance, we believe we are positioned for a recovery in the second quarter, and we continue to be optimistic about the second half of this year."