Semiconductor Manufacturing International Corporation (SMIC) has reported revenues of $370.6m for the first quarter of fiscal 2011, an increase of 7.2% compared 1Q 2010, and a drop of 9.3% sequentially.
The company posted gross margin of 18.6% in first quarter of 2011 compared to 24.3% in fourth quarter of 2010, primarily due to a decline in fab utilisation.
For the first quarter of fiscal 2011, the company’s net cash flow from operations decreased to $73.4m from $248.6m in fourth quarter of 2010.
The company’s income attributable to holders of ordinary shares was $10.2m in first quarter 2011, compared to income of $68.6m in 4Q10. Diluted earning per share in the first quarter was $0.02 per ADS.
SMIC expects revenue to decline between 3% to 7% in its quarter quarter. Gross margin is expected to range from 15% to 18%, and operating expenses excluding foreign exchange differences are expected to range from $82m to $86m.
SMIC p-resident and chief executive officer Dr. David NK Wang said the quarter-over-quarter revenue decline was largely due to first quarter seasonality and our key customers’ transition to our 65nm and 45nm.
Wang said, "We are happy to have announced an agreement with China Investment Corporation (or "CIC"), a sovereign wealth fund investment institution, to invest in SMIC for convertible preferred shares and warrants. These capital injections will further help SMIC to expand its technology roadmap and strengthen our foothold as one the leading foundries globally."
"Despite the short-term setbacks, we look forward to regaining growth in the second half of 2011. The short-term customer transitions will continue to impact our business performance in second quarter 2011, but given our successful funding, capacity ramping, enhanced technology mix, operational improvements, and China positioning, we are on track in executing sustainable competitiveness for the long-term."
