"As we get into the second half of the year, we are seeing different outlook for our business at 0.13-micron and above technologies, compared to leading-edge 90nm and 65nm technologies. Utilization for 0.13-micron and above technologies is expected to track higher than the company average and I believe this is due to the industry recovery following the inventory correction that the industry has been going through, as well as expected seasonal strength in second half of the year and the efforts we have undertaken in the last several years in diversifying our customer base and product offering in 0.13-micron and above technologies. However, we do have a challenge at the leading-edge technologies as we are continuing to see weaker demand at the 90nm node from the computer sector and also slower than expected production ramp of 65nm designs. As a result, we are disappointed with the slower growth outlook for our overall business in the second half of the year," said Chia Song Hwee, president & CEO of Chartered.
"Our breakeven utilization and profitability will be negatively impacted by the temporary change in our outlook. However, as we address our business mix issue by ramping leading-edge technologies, we are confident of getting our breakeven utilization rate back on track. We are ready to ramp volumes when customer demand increases along with market adoption of their products," concluded Chia.
Webcast Conference Call Today
Chartered will be discussing its second quarter 2007 results and third quarter 2007 outlook on a conference call today, July 27, 2007, at 8:30 a.m. Singapore time (US time 5:30 p.m. PT/8:30 p.m. ET, Thursday, July 26, 2007). A webcast of the conference call will be available to all interested parties on Chartered's Web site at www.charteredsemi.com, under Investor Relations, or at http://ir.charteredsemi.com.
Mid-Quarter Guidance
The Company provides a guidance update midway through each quarter. For third quarter 2007, the Company anticipates issuing its mid-quarter guidance update, via news release, on Thursday, September 6, 2007, Singapore time.
APPENDIX A
US GAAP Reconciliation Table
In order to provide investors additional information regarding the company's financial results as determined in accordance with US GAAP, in this report Chartered also provides information on its total business base revenues, which include the Company's share of Silicon Manufacturing Partners ("Revenues including Chartered's share of SMP"). SMP is a minority-owned joint-venture company and under US GAAP reporting, SMP revenues are not consolidated into Chartered's revenues ("Revenues"). References to revenues including Chartered's share of SMP in this report are therefore not in accordance with US GAAP. To ensure clarity, the tables below provide a reconciliation.
2Q 2006 1Q 2007 2Q 2007 3Q 2007
Actual Actual Actual Guidance
Midpoint
------------------------------------ ------- ------- ------- ---------
Revenues (d) $364.8M $323.8M $324.3M $338M
------------------------------------ ------- ------- ------- ---------
Chartered's share of SMP revenues $28.9M $21.5M $28.7M $28M
------------------------------------ ------- ------- ------- ---------
Revenues including Chartered's share
of SMP $393.7M $345.3M $353.0M $366M
------------------------------------ ------- ------- ------- ---------
----------------------------------------------------------------------
ASP (e) $1,089 $1,071 $908 $866
------------------------------------ ------- ------- ------- ---------
ASP of Chartered's share of SMP
revenues (e) $1,004 $817 $788 $775
------------------------------------ ------- ------- ------- ---------
ASP including Chartered's share of
SMP (e) $1,082 $1,051 $896 $858
------------------------------------ ------- ------- ------- ---------
(d) Determined in accordance with US GAAP.
(e) Eight-inch equivalent wafers.
Breakdown by Market Sector
Revenues (US GAAP) (Percentage of Total)
2Q 2006 3Q 2006 4Q 2006 1Q 2007 2Q 2007
------------------------------ ------- ------- ------- ------- -------
Communications 32% 31% 28% 34% 41%
------------------------------ ------- ------- ------- ------- -------
Computer 24% 36% 44% 43% 30%
------------------------------ ------- ------- ------- ------- -------
Consumer 41% 31% 26% 20% 26%
------------------------------ ------- ------- ------- ------- -------
Other 3% 2% 2% 3% 3%
------------------------------ ------- ------- ------- ------- -------
Total 100% 100% 100% 100% 100%
------------------------------ ------- ------- ------- ------- -------
Chartered's share of SMP revenues (Percentage of Total)
2Q 2006 3Q 2006 4Q 2006 1Q 2007 2Q 2007
------------------------------ ------- ------- ------- ------- -------
Communications 63% 51% 53% 60% 54%
------------------------------ ------- ------- ------- ------- -------
Computer 32% 43% 42% 35% 42%
------------------------------ ------- ------- ------- ------- -------
Consumer 5% 5% 4% 4% 3%
------------------------------ ------- ------- ------- ------- -------
Other - 1% 1% 1% 1%
------------------------------ ------- ------- ------- ------- -------
Total 100% 100% 100% 100% 100%
------------------------------ ------- ------- ------- ------- -------
