Guidance comments for year 2008:
-- R&D expenditures: approximately $180 million, compared to $160 million in 2007. The increased investment is to fund the development and qualification of 45nm and 32nm technology, including costs associated with investment in the most advanced semiconductor tools.
-- Capital expenditures: approximately $630 million, compared to $758 million in 2007. 2008 capital expenditures are primarily targeted for 65nm and below capacity, and to a lesser extent eight-inch tools, and are cash-flow based. With the above capital expenditure, Fab 7 is expected to have a capacity of 30,000 wafers (twelve-inch) per month by December 2008.
-- Depreciation and amortization: approximately $590 million, compared to $495 million in 2007.
-- Wafer capacity: approximately 2.3 million wafers (eight-inch equivalent) in 2008. Capacity for 90nm and below technologies is expected to represent approximately 23 percent of total capacity in December 2008.
CEO Closing Comments
"On a macro level, like most businesses, we are concerned about the potential negative impact from a global economic condition that is becoming less favorable. Based on current feedback from our customers, we do expect to see meaningful growth in second half of the year, driven by 65nm production ramp, both from new products as well as transition of products that are running currently at 90nm and 0.13-micron technologies. However, the uncertainties in the market place make the outlook quite clouded and difficult to predict with confidence," said Chia Song Hwee, president & CEO of Chartered.
"In 2008, we will continue to focus on enhancing our leading-edge capabilities by delivering 45nm and its derivative processes to our customer base and at the same time expanding our differentiated value-added technology offerings at the more mature technology nodes. As we achieve these goals, we expect to build on the significant progress we have already made in the past few years in diversifying our customer and product portfolios in both areas. One of management's top priorities continues to be getting our breakeven utilization back on track. Towards that goal, we will be looking for additional ways to improve our scale, optimize product portfolio and pricing, and improve our productivity as well as reduce costs. Finally, we plan to modulate our capital expenditure prudently and align it as closely as possible with the business outlook and the long-term goals of the company," concluded Chia.
Webcast Conference Call Today
Chartered will be discussing its fourth quarter 2007 and year-end results and first quarter 2008 outlook on a conference call today, February 1, 2008, at 8:30 a.m. Singapore time (US time 4:30 p.m. PT/7:30 p.m. ET, Thursday, January 31, 2008). 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 ir.charteredsemi.com
Mid-Quarter Guidance
The Company provides a guidance update midway through each quarter. For first quarter 2008, the Company anticipates issuing its mid-quarter guidance update, via news release, on Friday, March 14, 2008, 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.
1Q 2008
4Q 2006 3Q 2007 4Q 2007 Guidance Year Year
Actual Actual Actual Midpoint 2006 2007
--------------- ------- ------- ------- --------- --------- ---------
Revenues (c) $339.1M $354.8M $352.6M $367M $1,414.5M $1,355.5M
--------------- ------- ------- ------- --------- --------- ---------
Chartered's
share of SMP
revenues $24.6M $27.0M $25.2M $28M $112.1M $102.5M
--------------- ------- ------- ------- --------- --------- ---------
Revenues
including
Chartered's
share of SMP $363.7M $381.8M $377.8M $395M $1,526.6M $1,458.0M
--------------- ------- ------- ------- --------- --------- ---------
----------------------------------------------------------------------
ASP (d) $1,135 $888 $899 $865 $1,112 $930
--------------- ------- ------- ------- --------- --------- ---------
ASP of
Chartered's
share of SMP
revenues (d) $895 $790 $781 $795 $963 $793
--------------- ------- ------- ------- --------- --------- ---------
ASP including
Chartered's
share of SMP
(d) $1,115 $881 $889 $860 $1,099 $918
--------------- ------- ------- ------- --------- --------- ---------
(c) Determined in accordance with US GAAP.
(d) Eight-inch equivalent wafers.
Breakdown by Market Sector
Revenues (US GAAP) (Percentage of Total)
4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007
------------------------------ ------- ------- ------- ------- -------
Communications 28% 34% 41% 40% 47%
------------------------------ ------- ------- ------- ------- -------
Computer 44% 43% 30% 24% 18%
------------------------------ ------- ------- ------- ------- -------
Consumer 26% 20% 26% 33% 32%
------------------------------ ------- ------- ------- ------- -------
Other 2% 3% 3% 3% 3%
------------------------------ ------- ------- ------- ------- -------
Total 100% 100% 100% 100% 100%
------------------------------ ------- ------- ------- ------- -------
Chartered's share of SMP revenues (Percentage of Total)
4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007
----------------------------- -------- ------- ------- ------- -------
Communications 53% 60% 54% 42% 44%
----------------------------- -------- ------- ------- ------- -------
Computer 42% 35% 42% 53% 50%
----------------------------- -------- ------- ------- ------- -------
Consumer 4% 4% 3% 4% 4%
----------------------------- -------- ------- ------- ------- -------
Other 1% 1% 1% 1% 2%
----------------------------- -------- ------- ------- ------- -------
Total 100% 100% 100% 100% 100%
----------------------------- -------- ------- ------- ------- -------
