SMIC (Shanghai) said sales were $361.4 million in the second quarter, up 2.9 percent from the first quarter and up 29.3 percent from the like period a year ago.

Net income was $2.2 million in the second quarter, compared to a net loss of $8.7 million from the first quarter, and a loss of $40.4 million in the like period a year ago.

As a result of a tax planning strategy that became effective in Q2, a temporary difference between the tax and book basis of certain assets was created. Under FAS109, the company recognized an income tax benefit of $18.9 million.

Loss from operations was $6.9 million in Q2, up 16.1 percent from a loss of $6.0 million in 1Q. Other non-operating losses were $9.5 million in Q2, up 21.6 percent from a loss of $7.8 million in Q1, primarily due to a foreign exchange loss of $2.0 million in 2Q '06.

Still, the news was positive. Previously, SMIC had reported sixth consecutive quarterly losses despite growing sales and a push into new foundry markets, including NAND flash and solar. From the previous quarter, SMIC has lost a total of $131.4 million.

For Q2, the company reported an increase in capacity to 167,251 8-inch equivalent wafers per month and a utilization rate of 93.5 percent in the second quarter of 2006. This compares to a fab-utilization rate of 94.9 percent in the previous quarter and 86.5 percent a year ago.

"We continue to improve on our manufacturing core competency as we saw an increase in our revenues from 0.13-micron and below technologies contributing 47.5 percent of total revenues in the second quarter," said Richard Chang, CEO of SMIC, in a statement. "Revenues generated from 0.13-micron logic products as a percentage of our logic revenues significantly increased to 22.5 percent from 13.3 percent in the first quarter. We expect this trend to continue as more of our customers migrate to our 0.13-micron and 90-nanometer logic processes."

In the second quarter, SMIC qualified and commenced commercial production of its first 90-nm logic product within its 300-mm fab in Beijing.

"We have delivered the first engineering samples and are pleased to announce that Saifun's 90-nm NROM flash is functional," he said. "This marks an important achievement towards commencing production of this product in the fourth quarter of 2006."

For Q3, SMIC is seeing a mixed picture. Sales expected to remain flat or to increase up to 2 percent over Q2. "We are cautiously optimistic on our outlook for the second half of 2006 as some customers have pushed out wafer orders due to an ongoing inventory correction. However, the postponement of these orders is offset by the growing strength in the China market as we see the emergence of Mainland China customers and overseas customers partnering with SMIC to help gain market share in China," he added.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved