SMIC Reports 2014 Third Quarter Results

SHANGHAI, Nov. 5, 2014 /PRNewswire/ -- 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, 2014.

Third Quarter 2014 Highlights

• Revenue was $521.6 million in 3Q14, an increase of 2.0% quarter over quarter.
• Gross margin was 25.9% in 3Q14, compared to 28.0% in 2Q14 and 21.0% in 3Q13.
• Profit for the period attributable to SMIC was $47.5 million in 3Q14, compared to $56.8 million in 2Q14 and $42.5 million in 3Q13.

Fourth 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 decrease by 5% to 9% quarter over quarter.
• Gross margin is expected to range from 19.5% to 22.5%.
• Non-GAAP operating expenses excluding the effect of employee bonus accrual, government funding and gain from the disposal of living quarters are expected to range from $99 million to $103 million.

Dr. Tzu-Yin Chiu, SMIC's Chief Executive Officer and Executive Director, commented, "SMIC had a good quarter in Q3; we achieved our tenth consecutive profitable quarter. When excluding Wuhan Xinxin, we reached another record high revenue and grew 2.0% quarter over quarter and 3.6% year over year. Profit for the period attributable to SMIC was $47.5 million.

In terms of expansion, we plan to expand our Tianjin fab's production capacity to 42,000 8-inch wafers per month and Shenzhen is on track to reach 10,000 wafers per month installed capacity by year-end. We target to expand the Shenzhen fab capacity to 20,000 wafers per month capacity by the end of 2015. Meanwhile, the Beijing JV project is estimated to have 1,000 12-inch wafers per month installed capacity by year-end and 10,000 by the end of 2015. We target to reach 6,000 12-inch wafers per month 28nm capability by the end of 2014 in our Shanghai facility.

The strong IC demand in China is continuing to drive our growth. Revenue from China has continued to be over 40% of our total revenue in the past 5 quarters and accounts for more than 42% of our total revenue in Q3 2014. As the largest and most advanced foundry in China, we are looking forward to accelerated industry growth and, as we focus our direction and technology to capture market opportunities serving the demand of the China market; we believe the opportunities for continued growth will be plentiful."

Conference Call / Webcast Announcement

Date: November 6, 2014

Time: 8:30 a.m. Shanghai time

Dial-in numbers and pass code:

The call will be webcast live with audio at http://www.smics.com/eng/investors/ir_presentations.php or http://www.media-server.com/m/p/973q4rzt.

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. SMIC provides integrated circuit (IC) foundry and technology services at 0.35-micron to 28-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm mega-fab in Shanghai; a 300mm mega-fab in Beijing with a joint-venture 300mm fab that is currently under construction; a 200mm fab in Tianjin; and a 200mm fab project under development in Shenzhen. SMIC also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.

For more information, please visit 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 under "Fourth Quarter 2014 Guidance" and the statements regarding our production capacity plans, industry growth and our opportunities for continued growth through focusing our direction and technology into specific markets are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project," "target" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements 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 the global economic slowdown, orders or judgments from pending litigation, intensive intellectual property lawsuits in semiconductor industry 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 April 14, 2014, especially the consolidated financial statements, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited ("SEHK") from time to time, including current reports 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 may be 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.

About Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures

To supplement SMIC's consolidated financial results presented in accordance with IFRS, SMIC uses in this press release non-GAAP measures of operating results that are adjusted to exclude wafer shipments from Wuhan Xinxin Semiconductor Manufacturing Corporation ("Wuhan Xinxin"), which SMIC began gradually phasing out in 3Q13. There were no wafer shipments from Wuhan Xinxin from 1Q14 onwards. This earnings release includes non-GAAP revenue and non-GAAP operating expenses, which consists of total operating expenses as adjusted to exclude the effect of employee bonus accrual, government funding and gain from the disposal of living quarters. This earnings release also includes fourth quarter 2014 guidance for non-GAAP operating expenses. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS.

SMIC believes that use of these non-GAAP financial measures facilitates investors' and management's comparisons to SMIC's historical performance. The Company's management regularly uses these non-GAAP financial measures to understand, manage and evaluate the Company's business and make financial and operational decisions.

The accompanying table has more information and reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.

For the full version of SMIC's third quarter financial results, please see:
http://photos.prnasia.com/prnk/20141105/0861408175-a

SOURCE Semiconductor Manufacturing International Corporation

Related Links

http://www.smics.com

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