Semiconductor Manufacturing International Corporation (SMIC) has reported net profits of US$30.4 million on revenues of US$410.1 million for the third quarter of 2010, showing 26.8% sales growth on year and a return to profitability from year-ago losses of US$69.35 million.

On a sequential basis, SMIC saw third-quarter revenues increase 7.6% from the US$381.1 million posted in the second quarter. However, net profits for the quarter declined 68.3% from US$96 million in the second quarter.

SMIC's gross margin climbed to 24.5% in the third quarter from 15.6% in the second. The foundry chipmaker credited the 8.9pp rise to its higher fab utilization rates and depreciation cost reductions.

Looking forward, SMIC said revenues for the fourth quarter are expected to remain flat sequentially. Gross margin for the quarter may slightly drop to between 21% and 23%.

SMIC now expects capital investment of US$750-800 million for 2010, an upward revision from the US$700-750 million set previously, according to the company.

"With only 3% capacity increase year-over-year, we were able to grow our revenue 27% and our gross margin from 0.8% in Q3 last year to 24.5% this year," SMIC CEO David NK Wang said in a statement.

SMIC saw sales generated from 65nm account for 7.1% of its overall revenues in the third quarter, up from 3.7% in the second quarter and merely 0.5% a year ago. Meanwhile, the 90nm segment contributed 16.2% of SMIC's third-quarter revenues, compared to 19.9% in the prior quarter and 15.8% a year earlier. In the third quarter, 0.13-micron remained SMIC's major production node.

"Revenue contribution from 65nm doubled compared to the second quarter," Wang indicated. "Our 40nm low-leakage technology process was frozen on schedule with a leading customer's endorsement. We are accelerating our other 45nm programs, targeting revenue in the second half of 2011."

By: DocMemory
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