SAN FRANCISCO—Chinese foundry Semiconductor Manufacturing International Corp. (SMIC) reported a loss of $245.6 million for 2011 after reporting a rare profitable year in 2010, when it posted a net income of $14 million.
SMIC said the overall business environment in 2011 was challenging, citing a weak global economy and semiconductor inventory issues. SMIC said its overall fab capacity utilization fell to 69 percent in 2011, down from 96 percent in 2010.
The annual results issued by SMIC Thursday (March 29) were a supplement to quarterly results issued by the firm last month, when it reported a loss of $165.6 million on sales of $289.6 million for the fourth quarter of 2011.
SMIC (Shanghai) reported sales for 2011 of $1.32 billion, down 14 percent from 2010. Annual ales of 2011 were the lowest SMIC has reported since 2007. The company did report a gross profit for the year of $101.9 million, about one third of its gross profit in 2010.
SMIC said it derived 55 percent of its revenue from customer based in North America in 2011, roughly flat with the percentage of revenue derived from North American customers in 2010. Revenue from companies based in China made up about 33 percent of its 2011 revenue, up from about 29 percent in 2010, SMIC said.
Chips for consumer applications made up 45 percent of SMIC's 2011 sales, mainly due to chips for digital televisions, set-top boxes and gaming consoles, SMIC said. Revenue from chips for communications applications made up 42 percent of SMIC's 2011 sales, down from 49 percent in 2010, SMIC said.
SMIC said it derived 28 percent of its 2011 sales from chips implemented at 90-nm and below, up from 23 percent in 2010. During the year, SMIC said it extended its 65-nm technology down to 55-nm to broaden its product portfolio. Revenue from 65-nm process technology nearly tripled in 2011, accounting for 18.5 percent of the company's sales compared to 5.4 percent in 2010, SMIC said.
SMIC said it engaged with 24 new customers in 2011, mostly Chinese fabless companies. Citing an estimate from market research firm IHS iSuppli, SMIC said China’s fabless market is set to double by 2015, with a compound annual growth rate in revenue of 15.7 percent, from $5.2 billion in 2010 to $10.7 billion in 2015.
After spending about $765 million on capital expenditures in 2011, SMIC said it plans to spend about $430 million for capacity and business expansion in 2012. SMIC said it spent about $191.5 million on R&D in 2011.
SMIC said it was "cautiously optimistic" about its prospects for 2012. With increased customer confidence and a recovering economy, the firm said it is seeing a rebound in business n the first quarter and targeting continued growth in the second quarter. "We are on track to implement new initiatives and strategies within SMIC and are proud to see some positive initial results, including even closer customer partnerships and increased fab utilization for our Shanghai 8-inch and Beijing 12-inch fabs," the company said in a statement.
SMIC said it plans to ramp its 45-nm process for communications and consumer products in 2012.