“Our business outlook remains essentially unchanged relative to our expectations in April when we provided our guidance for the quarter. Two additional 65 nanometer customers that were expected to enter production this quarter have successfully done so and we continue to expect the momentum at that node to continue into the latter half of the year as more products enter into production. For the second quarter, we are reiterating our guidance for revenues at the Chartered level and revenues including our share of Silicon Manufacturing Partners,” said George Thomas, senior vice president & CFO of Chartered.
“However, we expect our gross profit to be lower by approximately $15 million compared to the mid-point of our prior guidance, due to increased costs. Approximately $9 million of the cost increase is attributable to a less favorable build-up of work-in-progress inventory, approximately $3 million to higher depreciation in Fab 3E as a result of the valuation exercise that is in progress and approximately $2 million to a weaker US dollar. Despite the lower gross profit we are reiterating our net income guidance due to a tax credit that is expected to offset that decline. Our guidance for average selling prices, utilization and earnings per American Depositary Share remains unchanged.”
Chartered plans to release second quarter 2008 results on Friday, July 25, 2008, Singapore time, before the Singapore market opens. Chartered’s original guidance for second quarter 2008 was published in the Company’s first quarter 2008 earnings release dated April 25, 2008, which can be found on Chartered’s Web site at www.charteredsemi.com, under Investor Relations, Earnings Releases section.
About Chartered
Chartered Semiconductor Manufacturing Ltd. (Nasdaq: CHRT) (SGX-ST: CHARTERED), one of the world’s top dedicated semiconductor foundries, offers leading-edge technologies down to 65 nanometer (nm), enabling today’s system-on-chip designs. The company further serves its customers’ needs through a collaborative, joint development approach on a technology roadmap that extends to 22nm. Chartered’s strategy is based on open and comprehensive design enablement solutions, manufacturing enhancement strategies, and a commitment to flexible sourcing. In Singapore, the company operates a 300mm fabrication facility and five 200mm facilities. Information about Chartered can be found at www.charteredsemi.com.
Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995
This news release contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including without limitation, statement relating to our business outlook remaining essentially unchanged relative to our expectations in April 08, the unanticipated cost issue and the possibility of recognizing a certain amount of tax credit in this quarter reflects our current views with respect to future events and financial performance and is subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. Among the factors that could cause actual results to differ materially are changes in the demands from our major customers, manufacturing capacity constraints, excess inventory, life cycle, market outlook and trends for specific products; sub-prime mortgage issue and the slow down in the economic conditions in the United States as well as globally; demand and supply outlook in the semiconductor market; competition from other foundries and pricing pressures; products mix; unforeseen delays, interruptions, performance level of our fabrication facilities; our progress on leading-edge products; changes in capacity plans, allocation and process technology mix; the successful integration of Fab 3E operations into our operations; unavailability of materials, equipment, manpower and expertise; access to or delays in technological advances or our development of process technologies; the successful implementation of our partnership, technology and supply alliances (including our joint development agreements with IBM and the other joint development partners); the growth rate of fabless companies, the outsourcing strategy of integrated device manufacturers (“IDM”) and our expectation that IDMs will utilize foundry capacity more extensively. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. In addition to the foregoing factors, a description of certain other risks and uncertainties which cause actual results to differ materially can be found in "Item 3. Key Information — D. Risk Factors" in our 2007 annual report on Form 20-F filed with the US SEC. You are cautioned not to place undue reliance on these forward-looking statements, which reflect management's current analysis of future events. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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