SMIC Reports 2020 Third Quarter Results
All currency figures stated in this report are in US Dollars unless stated otherwise.
The consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").
SHANGHAI, Nov. 11, 2020 /PRNewswire/ -- Semiconductor Manufacturing International Corporation (SSE STAR MARKET: 688981;SEHK: 00981; OTCQX: SMICY) ("SMIC", the "Company" or "we"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended September 30, 2020.
2020 Third Quarter Highlights
- Revenue was a record high of $1,082.5 million in 3Q20, an increase of 15.3% QoQ from $938.5 million in 2Q20, and 32.6% YoY from $816.5 million in 3Q19.
- Gross profit was $262.0 million in 3Q20, an increase of 5.4% QoQ from $248.6 million in 2Q20 and 54.3% YoY from $169.8 million in 3Q19.
- Gross margin was 24.2% in 3Q20, compared to 26.5% in 2Q20 and 20.8% in 3Q19.
2020 Fourth Quarter Guidance
The following statements are forward looking statements based on current expectations and involved risks and uncertainties, some of which are set forth under "Forward-Looking Statements" below. The Company expects:
- Revenue to decrease by 10% to 12% QoQ.
- Gross margin to range from 16% to 18%.
Dr. Gao Yonggang, SMIC's Chief Financial Officer commented:
"In the third quarter, the Company's revenue continued to reach a record high of US$1,083 million, up 15.3% quarter-over-quarter and 32.6% year-over-year. The Company achieved historical highs for gross profit of $262 million, profit for the period attributable to SMIC of $256 million, and EBITDA of $653 million. The expected annual revenue growth is revised to increase 24%-26%, and the annual gross margin is targeted to be higher than last year."
Dr. Zhao Haijun and Dr. Liang Mong Song, SMIC's Co-Chief Executive Officers commented:
"Demand for non-FinFET technology application platforms continues to be strong, with significant growth from applications such as power management, RF signal processor, fingerprint sensor, and image signal processor. Our FinFET technology addresses a diverse range of applications, and the yield of our first-generation FinFET technology has achieved industry standards, while our second-generation FinFET technology is entering small-volume risk production. The Company's capacity is expanding steadily; at the same time, our utilization rate maintains at a high level.
The macro-environment in 2020 has become increasingly complex. As a foundry, SMIC serves a diverse mix of customers both domestically and abroad. Since its inception, SMIC strictly operates in compliance with the laws and regulations of all jurisdictions in which it operates. We continue to actively communicate with suppliers, customers and relevant agencies, and evaluate the overall impact of US export restrictions on our production and operation. Currently, the Company is operating as usual, and though the export restrictions will have an impact on us, in the near-term we believe it is manageable. We will continue to follow up on this matter and further evaluate the impact. We thank our customers for their trust, suppliers for their support, and all our fellow employees for their diligent joint efforts.
In the Internet of Everything era, the semiconductor industry will continue to catalyze innovation and development across industries. SMIC will continue to be cooperative and open, to pursue development, and achieve collaborative success, in order to integrate into the global industry ecosystem, expanding technology platforms, enriching product applications, and providing complete solutions for domestic and foreign customers."
To see the complete results including financial tables, please click here:
Conference Call / Webcast Announcement
Date: November 12, 2020
Time: 8:30 a.m. Beijing time
Teleconference call services are affected by the COVID-19, operator assisted conference calls are not available at the moment. You must preregister online in order to receive the dial-in numbers.
You may register for the conference call at:
Once preregistration has been complete, you will receive dial-in numbers, the passcode, and a unique registrant ID. To join the conference, dial the number you receive in the email, enter the passcode followed by your registrant ID, and you will join the conference instantly.
The call will be webcast live with audio at:
An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.
Semiconductor Manufacturing International Corporation ("SMIC", SSE STAR MARKET: 688981; SEHK: 00981; OTCQX: SMICY) and its subsidiaries collectively constitute one of the leading foundries in the world, is Mainland China's most advanced and largest foundry, broadest in technology coverage, and most comprehensive in semiconductor manufacturing services. SMIC Group provides integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 14 nanometer. Headquartered in Shanghai, China, SMIC Group has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab), a 200mm fab and a effectively controlled joint-venture 300mm fab for advanced nodes in Shanghai; a 300mm fab and a majority-owned 300mm fab in Beijing; 200mm fabs in Tianjin and Shenzhen; and a majority-owned joint-venture 300mm bumping facility in Jiangyin. SMIC Group also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan China, and a representative office in Hong Kong China.
For more information, please visit www.smics.com.
This release contains, in addition to historical information, forward-looking statements. These forward-looking statements, including statements under "Quarterly Guidance", "Capex Summary" and the statements contained in the quotes of our Co-Chief Executive Officers and Chief Financial Officer are based on SMIC's current assumptions, expectations, beliefs, plans, objectives, and projections about future events or performance. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project," "target, "going forward", "continue", "ought to", "may", "seek", "should", "plan", "could", "vision", "goals", "aim", "aspire", "objective", "schedules", "outlook" and similar expressions to identify forward looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessary estimates reflecting judgment of SMIC's senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, intense competition in the semiconductor industry, SMIC's reliance on a small number of customers, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity, financial stability in end markets, orders or judgments from pending litigation, intensive intellectual property litigation in the semiconductor industry, general economic conditions and fluctuations in currency exchange rates.
In addition to the information contained in this release, you should also consider the information contained in our other filings with The Stock Exchange of Hong Kong Limited ("SEHK") and Shanghai Stock Exchange ("SSE") from time to time. Other unknown or unpredictable factors also could have material adverse effects on our future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this release. Except as required by applicable laws, SMIC undertakes no obligation and does not intend to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events after the date on which such statement is made or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or otherwise.
About Non-International Financial Reporting Standards ("non-IFRS") Financial Measures
To supplement SMIC's consolidated financial results presented in accordance with IFRS, SMIC uses in this release non-IFRS measures of operating results that are adjusted to exclude finance cost, depreciation and amortization, income tax benefits and expenses, the effect of employee bonus accrual, government funding, impairment loss of tangible and intangible assets, gain or loss on the disposal of machinery and equipment and gain from the disposal of living quarters. The presentation of non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. This earnings release includes EBITDA, EBITDA margin and non-IFRS operating expenses which consist of total operating expenses as adjusted to exclude the effect of employee bonus accrual, government funding, impairment loss of tangible and intangible assets, gain or loss on the disposal of machinery and equipment and gain from the disposal of living quarters. These non-IFRS financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for financial measures prepared in accordance with IFRS, and should be read only in conjunction with the Group's financial measures prepared in accordance with IFRS. The Group's non-IFRS financial measures may be different from similarly-titled non-IFRS financial measures used by other companies.
SMIC believes that use of these non-IFRS financial measures facilitates investors' and management's comparisons to SMIC's historical performance. The Group's management regularly uses these non-IFRS financial measures to understand, manage and evaluate the Group's business and make financial and operational decisions.
The accompanying table has more information and reconciliations of each non-IFRS financial measure to its most directly comparable IFRS financial measure.