SAN FRANCISCO Semiconductor Manufacturing International Corp. (SMIC), China's No. 1 foundry, Thursday (Oct. 27) reported third quarter sales of $310 million, up 11 percent from the $279.5 million in sales that the company posted for the second quarter.
SMIC posted a net loss for the quarter of $26.1 million, down 35 percent from the $40.4 million net loss the company posted for the second quarter.
SMIC's capacity utilization rate jumped to 92 percent in the third quarter, up from 87 percent during the second quarter. The company reported an increase in capacity to 143,188 8-inch equivalent wafers per month.
"As we continued to focus on the execution of our business plan we saw strong orders from our customers across leading edge and mainstream technology nodes during the third quarter," said Richard Chang, SMIC president and CEO, in a statement. "We increased the contribution from our high-end processes deriving more than 90 percent of our revenues from 0.185 micron and below technology for the first time."
Chang said SMIC's R&D team made progress in the execution of the company's 90-nanometer technology roadmap during the quarter, with qualification lot yields that exceeded customer targets and were comparable to the industry average.
"We expect to commence pilot production by the end of the fourth quarter and commercial production shortly thereafter," Chang said, adding that SMIC would also use its 90-nm logic process with the technology licensed from Saifun Semiconductors to manufacture a 2 gigabit NAND flash product.
During the quarter, SMIC said, the company added one of the top five fabless companies in the world to its customer base. SMIC said it engaged in some capacity with three of the top 10 fabless companies in the world during the third quarter.
Total capital expenditure for the third quarter was $189.23 million, SMIC said, higher than the company had said they would be when it reduced capital expenditure guidance in September to $120 million to $160 million.
Chang said capital expenditure for 2006 could be close to $1.1 billion and that SMIC's total capacity should be equivalent to approximately 200,000 8-inch wafers per month by the end of that year.
Chang said SMIC has also entered into a definitive agreement with Elpida to migrate capacity from 100 nm to the 90-nm process at its Fab 4 in Beijing.
Chang added that SMIC has entered into an agreement with a customer to co-develop its 65-nm process to deliver engineering samples by the end of 2006.
SMIC said it expects wafer shipments to increase slightly in the fourth quarter and capacity utilization to rise 1 percent to 93 percent. The company said it expects capital expenditures of approximately $250 million to $300 million in the fourth quarter, with depreciation and amortization of approximately $210 million to $215 million.