SAN JOSE, Calif. Amid a loss for the second quarter, China’s Semiconductor Manufacturing International Corp. (SMIC) on Thursday (July 28) said that it has elected Yang Yuan Wang as its new chairman, replacing Richard Chang, who will remain chief executive of the loss-ridden silicon foundry provider.
Wang has served as SMIC’s non-executive director since 2001. He is also the chief scientist of the Microelectronics Research Institute at Beijing University and a fellow of the Chinese Academy of Sciences.
In a statement, Chang put a positive spin on the news, saying that the company is moving towards a level of transparency within its operations. “We have always been embracing our commitment in enhancing the quality of the board,” Chang said.
“The appointment of Prof. Wang as our chairman of the board further illustrates our dedication to a high standard of corporate governance where the role of chairman is separate from that of CEO,” he said. “Prof. Wang is well respected in the semiconductor industry and we are confident of his impartiality in enhancing our standards of corporate governance and level of transparency.”
The move also comes on the heels of another loss at SMIC (Shanghai). The company said sales increased 12.3 percent in the second quarter of 2005 to $279.5 million, compared to $248.8 million in the prior quarter.
Net loss increased to $40.4 million in the second quarter of 2005 compared to a loss of $30.0 million in the first quarter of 2005. Earnings per share were minus $0.11 in the quarter, compared to minus $0.08 sequentially.
SMIC missed its forecast. For Q2, SMIC was projected to lose $0.09 a share on sales of $283.6 million, according to an analyst (see July 25 story).
SMIC reported an increase in capacity to 139,025 8-inch equivalent wafers per month and a utilization rate of 87 percent in the second quarter of 2005.
"The second quarter of 2005 marked what we believe to be the trough of this current semiconductor cycle," Chang said. "During this period, our financial performance was consistent with our expectations. Despite the general weakness in the semiconductor industry as a whole at the beginning of the year and in particular the foundry sector, we continued to increase our revenues during the second quarter of 2005.”
Chang, however, had a bullish outlook. “Based on the demand forecasts provided by our customers, we believe that the second half of 2005 will be a period of financial growth and improvement and have increased our projected capital expenditure budget to $1.1 billion for 2005,” he said.
SMIC also announce two separate projects. The first relates to a partnership which SMIC has formed with Saifun Semiconductors Ltd. in the flash-memory chip market (see July 28 story).
The second project relates to the wafer reclamation project in Shanghai to produce solar power modules. “We will start facility installation in the third quarter and anticipate equipment move-in during the fourth quarter,” Chang said.