On a sequential basis, SMIC's sales and profits for the fourth quarter showed decreases of 7.9% and 65.4%, respectively. Gross margin slid to 18.9% in the fourth quarter from 21% in the prior quarter and 19.9% a year ago.

Non-GAAP revenues excluding wafer shipments from Wuhan Xinxin came to US$483.6 million in the fourth quarter of 2013, up 10.6% on year but down 4% sequentially. Non-GAAP gross margin for the quarter was 19.2%, compared to 22.1% in the third quarter and 21.9% in fourth-quarter 2012.

For all of 2013, SMIC's consolidated sales increased 21.6% to a record US$2.07 billion. Net profits for the year totaled US$173.2 million, also hitting a record high, compared to US$22.8 million in 2012.

"2013 was another record-breaking year for SMIC," said company CEO Tzu-Yin Chiu. "If we remove the Wuhan Xinxin revenue contribution, SMIC revenue growth rate was a robust 27%."

SMIC disclosed that sales generated from 45/40nm processes accounted for 12.1% of its total wafer sales in 2013, compared to only 1.1% in 2012. In terms of sales breakdown by region, China accounted for 40.4% of the foundry's total wafer sales in 2013 compared to 33.9% in 2012.

"We target modest revenue from 28nm process technology at the end of 2014 and more significant ramp up in 2015," Chiu continued. He also noted that "China continues to be a leading source of high growth for SMIC. In the long-run, we have confidence in our strategy and capability to capture growth opportunities, especially those in the China IC market."

SMIC announced earlier in 2014 that the company successfully entered the multi project wafer (MPW) stage to support customer requirements on both 28nm PolySiON (PS) and 28nm high-k dielectrics metal gate (HKMG) processes.

In addition, SMIC has provided its guidance for the first quarter of 2014. The foundry expects revenues excluding wafer shipments from Wuhan Xinxin to drop 5-9% sequentially. Gross margin is estimated at 16-19%.

By: DocMemory
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