Business

Chips Are Down For China's SMIC

Shanghai-based Semiconductor Manufacturing International Corporation posted miserable quarterly figures as it announced its results of operations for the three months ended December 31, 2008, during which overall revenue decreased to USD272.5 million, down 27.5% quarter-on-quarter.

SMIC recorded a net loss of USD124.5 million in the fourth quarter compared to a net loss of USD30.3 million in the third quarter of 2008.

Dr. Richard Chang, CEO of SMIC, remarked, "Although our fourth quarter 2008 performance was impacted by the worldwide economic situation, we were able to achieve revenue in-line with our guidance. For the full year of 2008, consistent with our stated strategy of focusing on the non-DRAM business, we have managed to grow our non-DRAM revenue by 14.3% year-on-year despite a difficult fourth quarter. In addition, leveraging our strength in the China market, we have increased our sales to the domestic IC companies by 28% in 2008 relative to 2007."

SMIC stated that it had a 25.1% decrease in wafer shipments during the last quarter of 2008, while non-DRAM annual revenue increased by 14.3% year-on-year, gross margin was -27.4% in the fourth quarter compared to 7.2% in the previous quarter.

Net cash flow from operations, however, increased to USD171.2 million in the fourth quarter from USD110.1 million in the previous quarter due to a decrease in the use of working capital.

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