SMIC has reported a net loss of US$25.6 million for the third quarter ended September 31 due to severe price declines in the DRAM market.

The China-based foundry posted a net loss of US$2.1 million in the second quarter. Third-quarter revenues went up 6.1% on year and 4.4% sequentially to US$391.4 million, while gross margins grew slightly to 10.8%, compared to 10.3% in the previous quarter, chiefly because of higher utilization and a higher proportion of logic shipments, according to a company release issued October 30.

Wafer shipments in the third quarter of 2007 increased 10.7% on year, while utilization rose to 94.1%, up from 84.3% in the same period of 2006.

"Despite the strength of our non-DRAM foundry services, our business was impacted by ongoing severe price declines in the DRAM market. DRAM revenues were reduced to 23.6% of total revenues, compared to 28.9% reported in the second quarter of 2007," Chang said.

SMIC loss for the third quarter includes an additional loss provision for DRAM inventories of about US$10 million, according to Chang. "We expect revenues from DRAM as a proportion of our total revenue to decrease in the next two quarters," Chang added.

By: DocMemory
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