Contract chipmaker Semiconductor Manufacturing International Corp (SMIC) swung to net losses of US$88.1 million in the third quarter of 2011 from profits of US$30.4 million a year ago, with revenues slipping 24% on year.

Net losses for the third quarter were wider than losses of 3.8 million in the prior quarter, according to SMIC. The company posted US$306.9 million in third-quarter revenues, down 12.9% sequentially.

Meanwhile, affected by lower utilization, SMIC saw its gross margin fall to 1.4% in the third quarter of 2011 from 14.3% in the second quarter.

SMIC's fab utilization slid to 61% in the third quarter, down from 73.3% in the prior quarter and as high as 101.2% in the third quarter of 2010.

SMIC expects to post another 5-8% sequential decrease in fourth-quarter revenues, with gross margin falling into negative territory at 3-6%.

"The third and fourth quarters are very weak in terms of the foundry business cycle; we believe this is mainly due to global economic uncertainties and industry-wide inventory adjustments," said Tzu-Yin Chiu, SMIC CEO, in a statement.

"We are now in the process of researching and analyzing methods for differentiation, as well as identifying markets, especially in China, that are best suited for SMIC," Chiu continued.

By: DocMemory
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