“Chartered revenues and revenues including our share of SMP were up about 20 percent compared to the year ago period. Sequentially, Chartered revenues and revenues including our share of SMP were up about 10 percent, coming in above the high end of the guidance we had provided on March 14, 2008. Revenues from 90 nanometer (nm) and 65 nm, including both SOI and bulk technologies, grew approximately 10 percent compared to fourth quarter 2007, and represented 17 percent of our total business base revenues. We ended the quarter with a net income of $2 million, which included income related to a licensing arrangement,” said George Thomas, senior vice president and CFO of Chartered.
Summary of First Quarter 2008 Performance
- Revenues were $388.2 million in first quarter 2008, up 19.9 percent from $323.8 million in first quarter 2007. Revenues including Chartered’s share of SMP were $414.1 million, up 19.9 percent from $345.3 million in the year-ago quarter, primarily due to strength in the communications sector and to a lesser extent the consumer sector, partially offset by weakness in the computer sector. Sequentially, revenues were up 10.1 percent compared to $352.6 million in fourth quarter 2007. Revenues including Chartered’s share of SMP were up 9.6 percent from $377.8 million in fourth quarter 2007, primarily due to strength in the communications sector and to a lesser extent the consumer sector, partially offset by weakness in the computer sector.
- Gross profit was $64.6 million, or 16.6 percent of revenues, down from a gross profit of $71.8 million, or 22.2 percent of revenues in the year-ago quarter, primarily due to lower selling prices, partially offset by lower cost per wafer resulting from higher production volumes over which fixed costs are allocated. Gross profit was up 6.8 percent sequentially from $60.5 million, or 17.2 percent of revenues in fourth quarter 2007, primarily due to higher revenues resulting from higher shipments.
- Other revenue which primarily relates to rental income from SMP (Fab 5) was $5.6 million, essentially flat compared to the year-ago quarter.
- Research and development (R&D) expenses were $45.4 million, an increase of 21.0 percent from the year-ago quarter, primarily due to higher development activities related to the advanced 45nm technology node and higher payroll-related expenses.
- Sales and marketing expenses were $17.6 million, up 23.5 percent compared to $14.2 million in the year-ago quarter, primarily due to higher payroll-related expenses and higher financial support for pre-contract customer design validation activities. Compared to the previous quarter, sales and marketing expenses were up 11.3 percent from $15.8 million, primarily due to higher financial support for pre-contract customer design validation activities.
- General and administrative (G&A) expenses were $10.8 million, up 8.9 percent compared to $9.9 million in the year-ago quarter, primarily due to higher cost for external services.
- Equity in income of Chartered’s minority-owned joint-venture fab, SMP (Fab 5), was $9.9 million compared to $6.1 million in the year-ago quarter, primarily due to lower cost per wafer resulting from lower depreciation and higher production volumes over which fixed costs are allocated. Compared to the previous quarter, equity in income of SMP was up 10.5 percent from $9.0 million, primarily due to higher selling prices and a more favorable product mix.
- Other income (loss), net, was an income of $10.5 million, compared to a loss of $2.4 million in fourth quarter 2007, primarily due to the recognition of income arising from a technology licensing arrangement.
- Net interest expense was $10.6 million, compared to $8.1 million in the year-ago quarter, primarily due to lower interest income arising from lower interest rates and to a lesser extent lower principal balances. Compared to the previous quarter, net interest expense was up 30.5 percent from $8.1 million, primarily due to lower interest income arising from lower interest rates and to a lesser extent lower interest capitalization associated with the ramp of Fab 7.
- Net income for Chartered’s consolidated joint venture fab, Chartered Silicon Partners (CSP or Fab 6), was $8.6 million in first quarter 2008. Due to CSP’s cumulative losses, the obligation of its minority shareholders was reduced to zero in first quarter 2003 and none of its losses from that point forward have been allocated to the minority shareholders. When CSP subsequently becomes profitable, the profits applicable to the minority shareholders are taken to the consolidated statements of operations until the minority shareholders’ share of losses previously taken to the consolidated statement of operations is fully recovered. As such, all of CSP’s $8.6 million income in first quarter 2008 was taken to Chartered’s consolidated statement of operations. At the end of first quarter 2008, CSP’s shareholders’ deficit was $422.5 million.
- Net income was $2.4 million, or 0.6 percent of revenues, compared to a net income of $6.3 million, or 2.0 percent of revenues in the year-ago quarter and a net income of $5.9 million or 1.7 percent of revenues in the previous quarter.
- Basic loss per American Depositary Share (ADS) and basic loss per share in first quarter 2008 were ($0.00) and ($0.00) respectively, compared with basic earnings per ADS and basic earnings per share of $0.02 and $0.00 respectively in first quarter 2007. Diluted loss per ADS and diluted loss per share in first quarter 2008 were ($0.00) and ($0.00) respectively, compared with diluted earnings per ADS and diluted earnings per share of $0.02 and $0.00 respectively in first quarter 2007.
Wafer Shipments and Average Selling Prices (eight-inch equivalent)
- Shipments in first quarter 2008 were 424.8 thousand wafers, an increase of 42.0 percent compared to 299.2 thousand wafers in first quarter 2007. Shipments in first quarter 2008 increased by 10.9 percent compared to 383.2 thousand wafers shipped in fourth quarter 2007. Shipments including Chartered’s share of SMP were 457.2 thousand wafers, an increase of 40.4 percent compared to 325.6 thousand wafers in first quarter 2007. Shipments including Chartered’s share of SMP in first quarter 2008 increased by 10.0 percent compared to 415.5 thousand wafers shipped in fourth quarter 2007.
- ASP was $892 per wafer in first quarter 2008, compared to $899 per wafer in fourth quarter 2007. ASP including Chartered’s share of SMP was $885 per wafer in first quarter 2008 compared to $889 per wafer in fourth quarter 2007.
Capacity and Utilization
Capacity utilization in first quarter 2008 was 86 percent compared to 70 percent in the year-ago quarter, and 81 percent in fourth quarter 2007. Total capacity in first quarter 2008 was up approximately four percent sequentially. Capacity utilization is based on total shipments and total capacity, both of which include Chartered’s share of SMP.
|
Utilization Table |
||||||||||
|
Data including Chartered’s share of SMP |
||||||||||
| Thousand 8” equivalent wafers | 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | |||||
| Total wafers shipped | 325.6 | 381.6 | 426.1 | 415.5 | 457.2 | |||||
| Total capacity | 462.4 | 483.0 | 502.2 | 512.4 | 534.4 | |||||
| Utilization | 70% | 79% | 85% | 81% | 86% | |||||
|
Capacity by Fab |
||||||||||||
| (Thousand 8” equivalent wafers) | 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | Est. 2Q 2008 | ||||||
| Fab 2 | 142.6 | 153.8 | 155.5 | 155.5 | 153.8 | 153.8 | ||||||
| Fab 3 | 69.5 | 70.3 | 70.4 | 70.4 | 74.8 | 80.4 | ||||||
| Fab 3E (a) | - | - | - | - | - | 74.3 | ||||||
| Fab 5 (Chartered’s share) | 34.6 | 34.9 | 35.3 | 35.3 | 35.5 | 35.5 | ||||||
| Fab 6 | 114.5 | 115.8 | 117.0 | 120.0 | 120.2 | 126.2 | ||||||
| Fab 7 | 101.2 | 108.2 | 124.0 | 131.2 | 150.1 | 154.6 | ||||||
| Total | 462.4 | 483.0 | 502.2 | 512.4 | 534.4 | 624.8 | ||||||
|
(a) Recently acquired eight-inch wafer fabrication facility. |
||||||||||||
Market Dynamics
The following business statistics tables provide information on revenues including Chartered’s share of SMP by market sector, region and technology.
|
Breakdown by Market Sector |
||||||||||
|
Revenues including Chartered’s share of SMP (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Communications | 36% | 42% | 40% | 46% | 48% | |||||
| Computer | 43% | 31% | 26% | 20% | 18% | |||||
| Consumer | 19% | 24% | 31% | 31% | 31% | |||||
| Other | 2% | 3% | 3% | 3% | 3% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Breakdown by Region |
||||||||||
|
Revenues including Chartered’s share of SMP (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Americas | 78% | 67% | 63% | 68% | 66% | |||||
| Europe | 7% | 9% | 9% | 9% | 9% | |||||
| Asia-Pacific | 14% | 22% | 27% | 23% | 25% | |||||
| Japan | 1% | 2% | 1% | - | - | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Breakdown by Technology (micron) |
||||||||||
|
Revenues including Chartered’s share of SMP (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| 0.065 and below | - | 6% | 12% | 13% | 10% | |||||
| Up to 0.09 | 27% | 11% | 6% | 4% | 7% | |||||
| Up to 0.13 | 30% | 33% | 33% | 31% | 34% | |||||
| Up to 0.15 | 1% | 1% | - | - | - | |||||
| Up to 0.18 | 11% | 14% | 16% | 16% | 15% | |||||
| Up to 0.25 | 8% | 11% | 12% | 13% | 14% | |||||
| Up to 0.35 | 14% | 14% | 13% | 14% | 12% | |||||
| Above 0.35 | 9% | 10% | 8% | 9% | 8% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
Recent Highlights
- Chartered announced the extension of its joint development efforts with IBM to include 22nm bulk CMOS technology. This collaborative development program has enabled Chartered to provide foundry access to a leading technology roadmap, spanning five major generations of advanced process technology, including 90nm, 65nm, 45nm, 32nm and 22nm logic processes.
- On March 31, 2008, Chartered completed the acquisition of Hitachi Semiconductor Singapore Pte Ltd, which owns and operates an eight-inch wafer fabrication facility located in Singapore, for a total consideration of approximately $240 million.
- Chartered announced the signing of an agreement for a $190 million term loan facility from Societe Generale, guaranteed by Atradius Dutch State Business NV. The loan is to support the Phase 2 ramp of Fab 7.
Review and Outlook
“We are guiding for double-digit revenue growth into the second quarter mainly due to incremental revenues from the recently acquired fab, Fab 3E, and higher revenues at the leading-edge technologies, resulting from the ramp of existing as well as new 65nm customer programs,” said Thomas.
“Based on current demand levels from our customers, we are expecting revenues at the Chartered level and revenues including our share of SMP to be up approximately 17 percent and 16 percent respectively in the second quarter, compared to first quarter 2008. Excluding revenues from Fab 3E, revenues at Chartered level and revenues including our share of SMP are expected to increase approximately six percent. Revenues from 0.13-micron and below technologies, including those from 65nm, are expected to account for approximately 47 percent of our total business base revenues. Revenues from 65nm alone are expected to grow around 33 percent sequentially and represent approximately 11 percent of our total business base revenues. After comprehending approximately 17 percent sequential increase in capacity, primarily due to the acquisition of Fab 3E, we expect utilization in the second quarter to be approximately 88 percent. With this outlook, we expect to post a net income of approximately $6 million for the second quarter.”
The outlook for second quarter 2008 is as follows:
| 1Q 2008 |
|
2Q 2008 Guidance | ||||||
| Actual | Midpoint and range | Sequential change | ||||||
| Revenues | $388.2M |
$455M, +/- $6M (b)
|
Up 16% to Up 19% | |||||
| Revenues including Chartered’s share of SMP | $414.1M | $480M, +/- $7M (b) | Up 14% to Up 18% | |||||
| ASP (c) | $892 | $861, +/- $20 | Down 1% to Down 6% | |||||
| ASP including Chartered’s share of SMP (c) | $885 | $857, +/- $25 | Flat to Down 6% | |||||
| Utilization | 86% | 88%, +/- 3% (d) | - | |||||
| Gross profit | $64.6M | $81M, +/- $6M | - | |||||
| Net income | $2.4M | $6M, +/- $5M | - | |||||
| Basic earnings (loss) per ADS (e) | ($0.00) | $0.01, +/- $0.02 | - | |||||
|
(b) For 2Q 2008, revenue guidance includes approximately $42 million from Fab 3E.
|
||||||||
|
(c) Eight-inch equivalent wafers. Excluding Fab 3E, mid-point of ASP and ASP including Chartered’s share of SMP would be approximately 2 percent higher.
|
||||||||
|
(d) For 2Q 2008, utilization guidance comprehends Fab 3E shipments and capacity. Capacity for Fab 3E is expected to be 74,300 eight-inch wafers for the quarter.
|
||||||||
|
(e) Basic earnings (loss) per ADS is computed by deducting from net income or adding to net (loss) the accretion to redemption value of the convertible redeemable preference shares, projected to be approximately $2.5 million in second quarter 2008. |
||||||||
CEO Closing Comments
“We are encouraged by the positive signs in our business, as evidenced by the revenue growth into the second quarter. Two additional 65nm customers are expected to enter production ramp in the second quarter, broadening our customer base at the leading edge. We expect the momentum to continue into the latter half of the year as more products enter into production and increase the breadth of applications we serve. Integration of Fab 3E is proceeding according to plan, and in the coming quarters, I believe we will be able to meet some of the additional requirements of existing customers in the mature technologies. Despite these positive signs, like most other businesses, we continue to be cautious about the potential negative impact from a global economic condition that could become more unfavorable going forward. In addition, we also need to deal with the challenges of intense competition and cost pressure in the foundry industry,” said Chia Song Hwee, president & CEO of Chartered.
“As we further ramp our 65nm programs and deliver on 45nm and its derivative processes to our customer base, we will not lose focus on our goal to get our breakeven utilization back on track and improve our profitability. In order to achieve that, we will continue to optimize our product portfolio and pricing, and further improve our productivity and cost structure,” concluded Chia.
Webcast Conference Call Today
Chartered will be discussing its first quarter 2008 and second quarter 2008 outlook on a conference call today, April 25, 2008, at 8:30 a.m. Singapore time (US time 5:30 p.m. PT/8:30 p.m. ET, Thursday, April 24, 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 second quarter 2008, the Company anticipates issuing its mid-quarter guidance update, via news release, on Tuesday, June 10, 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 2007
Actual |
4Q 2007
Actual |
1Q 2008
Actual |
2Q 2008 Guidance
Midpoint |
|||||
| Revenues (f) | $323.8M | $352.6M | $388.2M | $455M | ||||
| Chartered’s share of SMP revenues | $21.5M | $25.2M | $25.9M | $25M | ||||
| Revenues including Chartered’s share of SMP | $345.3M | $377.8M | $414.1M | $480M | ||||
| ASP (g) | $1,071 | $899 | $892 | $861 | ||||
| ASP of Chartered’s share of SMP revenues (g) | $817 | $781 | $799 | $796 | ||||
| ASP including Chartered’s share of SMP (g) | $1,051 | $889 | $885 | $857 | ||||
|
(f) Determined in accordance with US GAAP. |
||||||||
|
(g) Eight-inch equivalent wafers. |
||||||||
|
Breakdown by Market Sector |
||||||||||
|
Revenues (US GAAP) (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Communications | 34% | 41% | 40% | 47% | 48% | |||||
| Computer | 43% | 30% | 24% | 18% | 16% | |||||
| Consumer | 20% | 26% | 33% | 32% | 33% | |||||
| Other | 3% | 3% | 3% | 3% | 3% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Chartered’s share of SMP revenues (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Communications | 60% | 54% | 42% | 44% | 39% | |||||
| Computer | 35% | 42% | 53% | 50% | 46% | |||||
| Consumer | 4% | 3% | 4% | 4% | 12% | |||||
| Other | 1% | 1% | 1% | 2% | 3% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Revenues including Chartered’s share of SMP (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Communications | 36% | 42% | 40% | 46% | 48% | |||||
| Computer | 43% | 31% | 26% | 20% | 18% | |||||
| Consumer | 19% | 24% | 31% | 31% | 31% | |||||
| Other | 2% | 3% | 3% | 3% | 3% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Breakdown by Region |
||||||||||
|
Revenues (US GAAP) (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Americas | 80% | 71% | 67% | 70% | 68% | |||||
| Europe | 7% | 9% | 9% | 9% | 9% | |||||
| Asia-Pacific | 12% | 19% | 24% | 21% | 23% | |||||
| Japan | 1% | 1% | - | - | - | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Chartered’s share of SMP Revenues (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Americas | 47% | 30% | 23% | 27% | 27% | |||||
| Europe | 15% | 9% | 7% | 13% | 13% | |||||
| Asia-Pacific | 34% | 56% | 65% | 58% | 56% | |||||
| Japan | 4% | 5% | 5% | 2% | 4% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Revenues including Chartered’s share of SMP (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| Americas | 78% | 67% | 63% | 68% | 66% | |||||
| Europe | 7% | 9% | 9% | 9% | 9% | |||||
| Asia-Pacific | 14% | 22% | 27% | 23% | 25% | |||||
| Japan | 1% | 2% | 1% | - | - | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Breakdown by Technology (micron) |
||||||||||
|
Revenues (US GAAP) (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| 0.065 and below | - | 7% | 13% | 14% | 11% | |||||
| Up to 0.09 | 29% | 12% | 6% | 4% | 7% | |||||
| Up to 0.13 | 32% | 36% | 35% | 34% | 37% | |||||
| Up to 0.15 | - | - | - | - | - | |||||
| Up to 0.18 | 7% | 8% | 10% | 11% | 10% | |||||
| Up to 0.25 | 9% | 12% | 13% | 13% | 15% | |||||
| Up to 0.35 | 13% | 15% | 14% | 15% | 12% | |||||
| Above 0.35 | 10% | 10% | 9% | 9% | 8% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Chartered’s share of SMP Revenues (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| 0.065 and below | - | - | - | - | - | |||||
| Up to 0.09 | - | - | - | - | - | |||||
| Up to 0.13 | - | - | - | - | - | |||||
| Up to 0.15 | 14% | 14% | 3% | 2% | - | |||||
| Up to 0.18 | 66% | 77% | 92% | 86% | 89% | |||||
| Up to 0.25 | 1% | 6% | 2% | 8% | 6% | |||||
| Up to 0.35 | 19% | 3% | 3% | 4% | 5% | |||||
| Above 0.35 | - | - | - | - | - | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
|
Revenues including Chartered’s share of SMP (Percentage of Total) |
||||||||||
| 1Q 2007 | 2Q 2007 | 3Q 2007 | 4Q 2007 | 1Q 2008 | ||||||
| 0.065 and below | - | 6% | 12% | 13% | 10% | |||||
| Up to 0.09 | 27% | 11% | 6% | 4% | 7% | |||||
| Up to 0.13 | 30% | 33% | 33% | 31% | 34% | |||||
| Up to 0.15 | 1% | 1% | - | - | - | |||||
| Up to 0.18 | 11% | 14% | 16% | 16% | 15% | |||||
| Up to 0.25 | 8% | 11% | 12% | 13% | 14% | |||||
| Up to 0.35 | 14% | 14% | 13% | 14% | 12% | |||||
| Above 0.35 | 9% | 10% | 8% | 9% | 8% | |||||
| Total | 100% | 100% | 100% | 100% | 100% | |||||
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, statements relating to our outlook for the second quarter of 2008; projected revenues and average selling prices (including Chartered's share of SMP), utilization rate, gross profit, net income and earnings per ADS; the revenue contribution from 0.13-micron and below technologies including those from 65nm as a percentage of our total business base revenues and our estimated wafer capacity in second quarter of 2008, reflect our current views with respect to future events and financial performance and are 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; subprime 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.
All currency figures stated in this report are in US dollars.
The financial statement amounts in this report are determined in accordance with US GAAP.
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”). Silicon Manufacturing Partners (SMP or Fab 5) 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, in Appendix A of this report we have included a reconciliation table which provides comparable data based on revenues determined in accordance with US GAAP, which do not include the Company’s share of SMP.
| CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES | |||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (In thousands of US Dollars, except share and per share data) | |||||||
| Determined in accordance with US GAAP | |||||||
|
Three Months Ended
|
|||||||
| 2007 | 2008 | ||||||
| Net revenue | $ | 323,796 | $ | 388,230 | |||
| Cost of revenue | 252,018 | 323,628 | |||||
| Gross profit | 71,778 | 64,602 | |||||
| Other revenue | 5,622 | 5,610 | |||||
| Operating expenses: | |||||||
| Research and development | 37,570 | 45,445 | |||||
| Sales and marketing | 14,245 | 17,592 | |||||
| General and administrative | 9,916 | 10,794 | |||||
| Other operating expenses, net | 4,782 | 2,484 | |||||
| Total operating expenses | 66,513 | 76,315 | |||||
| Equity in income of associated companies, net | 6,097 | 9,793 | |||||
| Other income (loss), net | (1,051 | ) | 10,510 | ||||
| Interest expense, net | (8,070 | ) | (10,577 | ) | |||
| Income before income tax | 7,863 | 3,623 | |||||
| Income tax expense | 1,537 | 1,232 | |||||
| Net income | 6,326 | 2,391 | |||||
| Less: Accretion to redemption value of convertible | |||||||
| redeemable preference shares | 2,381 | 2,475 | |||||
| Net income (loss) available to ordinary shareholders | $ | 3,945 | $ | (84 | ) | ||
| Net earnings (loss) per ordinary share and ADS | |||||||
| Basic net earnings (loss) per ordinary share | $ | 0.00 | $ | (0.00 | ) | ||
| Diluted net earnings (loss) per ordinary share | $ | 0.00 | $ | (0.00 | ) | ||
| Basic net earnings (loss) per ADS | $ | 0.02 | $ | (0.00 | ) | ||
| Diluted net earnings (loss) per ADS | $ | 0.02 | $ | (0.00 | ) | ||
| Number of ordinary shares (in millions) used in computing: | |||||||
| Basic net earnings (loss) per ordinary share | 2,536.8 | 2,540.0 | |||||
| Effect of dilutive securities | 7.0 | - | |||||
| Diluted net earnings (loss) per ordinary share | 2,543.8 | 2,540.0 | |||||
| Number of ADS (in millions) used in computing: | |||||||
| Basic net earnings (loss) per ADS | 253.7 | 254.0 | |||||
| Effect of dilutive securities | 0.7 | - | |||||
| Diluted net earnings (loss) per ADS | 254.4 | 254.0 | |||||
| CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (In thousands of US Dollars) | |||||||
|
|
Determined in accordance with US GAAP |
||||||
| As of | |||||||
| December 31, | March 31, | ||||||
| 2007 |
2008 (h) |
|
|||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 743,173 | $ | 505,092 | |||
| Restricted cash | 45,092 | 45,510 | |||||
| Marketable securities | 2,822 | 1,743 | |||||
| Receivables, net | 237,312 | 303,175 | |||||
| Inventories | 213,524 | 230,014 | |||||
| Other investments | 89,290 | 58,153 | |||||
| Other current assets | 22,520 | 23,976 | |||||
| Total current assets | 1,353,733 | 1,167,663 | |||||
| Investment in associated companies | 30,112 | 30,965 | |||||
| Technology licenses, net | 62,699 | 65,437 | |||||
| Property, plant and equipment, net | 2,463,789 | 2,692,450 | |||||
| Other non-current assets | 115,228 | 61,154 | |||||
| Total assets | $ | 4,025,561 | $ | 4,017,669 | |||
| LIABILITIES, CONVERTIBLE REDEEMABLE PREFERENCE SHARES AND SHAREHOLDERS' EQUITY | |||||||
| Payables | $ | 212,618 | $ | 267,583 | |||
| Short-term debt | 270,000 | - | |||||
| Current installments of long-term debt and capital lease obligations | 78,663 | 148,962 | |||||
| Other current liabilities | 114,630 | 99,008 | |||||
| Total current liabilities | 675,911 | 515,553 | |||||
| Long-term debt and capital lease obligations, excluding current installments | |||||||
| 1,499,917 | 1,635,087 | ||||||
| Other non-current liabilities | 52,747 | 66,803 | |||||
| Total liabilities | 2,228,575 | 2,217,443 | |||||
| Convertible redeemable preference shares | 255,837 | 258,312 | |||||
| Shareholders' equity | 1,541,149 | 1,541,914 | |||||
| Total liabilities, convertible redeemable preference shares and shareholders' equity | |||||||
| $ | 4,025,561 | $ | 4,017,669 | ||||
|
(h) The unaudited condensed consolidated balance sheet as of March 31, 2008 includes the assets acquired and liabilities assumed in connection with the acquisition of Hitachi Semiconductor Singapore Pte Ltd. |
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|
|
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|
|
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| CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES | |||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (In thousands of US Dollars) | |||||||||
| Determined in accordance with US GAAP | |||||||||
|
For The Three Months Ended |
|||||||||
| March 31, | March 31, | ||||||||
| 2007 | 2008 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Net income | $ | 6,326 | $ | 2,391 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Equity in income of associated companies, net | (6,097 | ) | (9,793 | ) | |||||
| Cash dividends received from associated companies | 8,376 | 8,972 | |||||||
| Depreciation and amortization | 119,495 | 133,247 | |||||||
| Foreign exchange gain, net | (578 | ) | (165 | ) | |||||
| (Gain) loss on disposal of property, plant and equipment, net | (642 | ) | 46 | ||||||
| Others, net | 2,646 | 4,385 | |||||||
| Changes in assets and liabilities: | |||||||||
| Receivables | 26,330 | 11,138 | |||||||
| Inventories | (13,410 | ) | 823 | ||||||
| Other assets | (3,623 | ) | (1,312 | ) | |||||
| Payables and other liabilities | (13,328 | ) | (7,734 | ) | |||||
| Net cash provided by operating activities | 125,495 | 141,998 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
| Payments for property, plant and equipment | (287,023 | ) | (95,498 | ) | |||||
| Payments for technology licenses | (3,015 | ) | (3,986 | ) | |||||
| Purchase of a subsidiary, net of cash acquired | - | (234,602 | ) | ||||||
| Refund of deposits placed with a vendor | - | 400 | |||||||
| Proceeds from sale of property, plant and equipment | 4,551 | 2,715 | |||||||
| Proceeds from redemption of other investments | - |
30,048 |
|
||||||
| Return of capital from associated companies | 4,900 | - | |||||||
| Others, net | (1,196 | ) | 17 | ||||||
| Net cash used in investing activities | (281,783 | ) | (300,906 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
| Debt | |||||||||
| Borrowings | - | 230,151 | |||||||
| Repayments | (36,750 | ) | (307,013 | ) | |||||
| Capital lease payments | (980 | ) | (1,117 | ) | |||||
| Refund of customer deposits | (10,550 | ) | (5,609 | ) | |||||
| Issuance of ordinary shares | 1,422 | 584 | |||||||
| (Increase) decrease in cash restricted for debt repayments | 1,663 | (418 | ) | ||||||
| Others, net | (900 | ) | - | ||||||
| Net cash used in financing activities | (46,095 | ) | (83,422 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | 1,847 | 4,249 | |||||||
| Net decrease in cash and cash equivalents | (200,536 | ) | (238,081 | ) | |||||
| Cash and cash equivalents at the beginning of the period | 718,982 | 743,173 | |||||||
| Cash and cash equivalents at the end of the period | $ |
518,446 |
$505,092 |
||||||
Contact:
Chartered Semiconductor Manufacturing Ltd.
Suresh Kumar, (1)
408-941-1110 (Investor)
Email Contact
Lim
Li Chuen, (65) 6360-4060 (Investor)
Email Contact
Chartered
U.S.:
Tiffany Sparks, (1) 408-941-1185 (Media)
Email Contact
Chartered
Singapore:
Celestine Lim, (65) 6360-4705 (Media)
Email Contact