News Article
Foundry revenues down
Chartered reports a 37.2% drop in first quarter but see positives in leading edge growth
Chartered Semiconductor Manufacturing has announced its results for first quarter 2009.
“Chartered revenues in first quarter 2009 were down 31 percent, and revenues including our share of SMP were down 29 percent compared to the previous quarter, coming in at the high end of the guidance we had provided on March 9, 2009. Revenues from 65 nanometer (nm) and below technologies, including those from 45nm, accounted for approximately 24 percent of our total business base revenues. Revenues from 45nm alone represented approximately three percent of our total business base revenues. We ended the quarter with a net loss attributable to Chartered of $99 million, which was better than our previous guidance. Despite the low utilization of 38 percent, we were able to post an operating cash flow of approximately $59 million for the quarter,” said George Thomas, senior vice president & CFO of Chartered.
Summary of First Quarter 2009 Performance
Revenues were $243.9 million in first quarter 2009, including $36.8 million from Fab 3E. Revenues in first quarter 2009 were down 37.2 percent from $388.2 million in first quarter 2008. Revenues including Chartered’s share of SMP were $253.5 million, down 38.8 percent from $414.1 million in the year-ago quarter, primarily due to a significant decline in semiconductor demand across all sectors.
Gross loss was $27.5 million, or negative 11.3 percent of revenues, compared to a gross profit of $64.6 million, or 16.6 percent of revenues in the year-ago quarter and gross profit of $13.8 million, or 3.9 percent of revenues in fourth quarter 2008, primarily due to lower revenues resulting from lower shipments and higher cost per wafer resulting from lower production volumes over which fixed costs are allocated, including the impact of significantly lower utilization of manufacturing assets.
Research and development (R&D) expenses were $48.0 million, an increase of 5.6 percent from $45.4 million in the year-ago quarter and an increase of 5.8 percent from $45.4 million in fourth quarter 2008, primarily due to lower reimbursement of expenses from grants and higher cost of development activities related to the advanced 32nm technology.
Equity in loss of Chartered’s minority-owned joint-venture fab, SMP (Fab 5), was $1.7 million compared to equity in income of $9.9 million in the year-ago quarter, primarily due to lower revenues resulting from lower shipments and higher cost per wafer resulting from lower production volumes over which fixed costs are allocated.
ASP was $928 per wafer in first quarter 2009, compared to $909 per wafer in fourth quarter 2008, primarily due to a favorable product mix. ASP including Chartered’s share of SMP was $927 per wafer in first quarter 2009 compared to $907 per wafer in fourth quarter 2008.
Capacity utilization in first quarter 2009 was 38 percent compared to 86 percent in the year-ago quarter, and 59 percent in fourth quarter 2008. Total capacity in first quarter 2009 was down approximately two percent sequentially.
“As we go into the second quarter, we are seeing a significant increase in orders from our customers with the bulk of the increase coming from our leading-edge 65nm technology node followed by 0.11 and 0.18-micron nodes. We believe this is mainly driven by introduction of new products by our customers and to lesser extent, inventory re-stocking. Based on our current outlook, we expect total business base shipments to increase approximately 52 percent and result in an approximately 20 percentage point improvement in utilization compared to the previous quarter. This translates to sequential revenue growth of approximately 36 percent including our share of SMP. In line with the strength we are seeing at the leading-edge technologies, we expect revenues from 65nm and below technologies to increase approximately 72 percent sequentially and represent approximately 30 percent of our total business base revenues in the second quarter,” said Thomas.
“The improvement in customer orders and the resulting sequential growth expectation into the second quarter are definitely encouraging signs. Due to macroeconomic conditions that continue to be challenging, it is difficult, however, to predict the growth trend beyond the second quarter. While we are adjusting our short-term business plans to meet additional demand for customers, we are continuing to focus on lowering our breakeven point and watching our cash and liquidity position,” said Chia Song Hwee, president & CEO of Chartered.
“As we look forward, we believe our current technology position as well as our roadmap, including the high-k metal-gate based 28nm offering that has already built up significant customer excitement, will support us in delivering significant value to customers as they launch new products that require high performance and energy-efficient characteristics. As we continue to make further operational improvements and widen our customer base, our top priority continues to be bringing Chartered back to sustainable profitability,” concluded Chia.
“Chartered revenues in first quarter 2009 were down 31 percent, and revenues including our share of SMP were down 29 percent compared to the previous quarter, coming in at the high end of the guidance we had provided on March 9, 2009. Revenues from 65 nanometer (nm) and below technologies, including those from 45nm, accounted for approximately 24 percent of our total business base revenues. Revenues from 45nm alone represented approximately three percent of our total business base revenues. We ended the quarter with a net loss attributable to Chartered of $99 million, which was better than our previous guidance. Despite the low utilization of 38 percent, we were able to post an operating cash flow of approximately $59 million for the quarter,” said George Thomas, senior vice president & CFO of Chartered.
Summary of First Quarter 2009 Performance
Revenues were $243.9 million in first quarter 2009, including $36.8 million from Fab 3E. Revenues in first quarter 2009 were down 37.2 percent from $388.2 million in first quarter 2008. Revenues including Chartered’s share of SMP were $253.5 million, down 38.8 percent from $414.1 million in the year-ago quarter, primarily due to a significant decline in semiconductor demand across all sectors.
Gross loss was $27.5 million, or negative 11.3 percent of revenues, compared to a gross profit of $64.6 million, or 16.6 percent of revenues in the year-ago quarter and gross profit of $13.8 million, or 3.9 percent of revenues in fourth quarter 2008, primarily due to lower revenues resulting from lower shipments and higher cost per wafer resulting from lower production volumes over which fixed costs are allocated, including the impact of significantly lower utilization of manufacturing assets.
Research and development (R&D) expenses were $48.0 million, an increase of 5.6 percent from $45.4 million in the year-ago quarter and an increase of 5.8 percent from $45.4 million in fourth quarter 2008, primarily due to lower reimbursement of expenses from grants and higher cost of development activities related to the advanced 32nm technology.
Equity in loss of Chartered’s minority-owned joint-venture fab, SMP (Fab 5), was $1.7 million compared to equity in income of $9.9 million in the year-ago quarter, primarily due to lower revenues resulting from lower shipments and higher cost per wafer resulting from lower production volumes over which fixed costs are allocated.
ASP was $928 per wafer in first quarter 2009, compared to $909 per wafer in fourth quarter 2008, primarily due to a favorable product mix. ASP including Chartered’s share of SMP was $927 per wafer in first quarter 2009 compared to $907 per wafer in fourth quarter 2008.
Capacity utilization in first quarter 2009 was 38 percent compared to 86 percent in the year-ago quarter, and 59 percent in fourth quarter 2008. Total capacity in first quarter 2009 was down approximately two percent sequentially.
“As we go into the second quarter, we are seeing a significant increase in orders from our customers with the bulk of the increase coming from our leading-edge 65nm technology node followed by 0.11 and 0.18-micron nodes. We believe this is mainly driven by introduction of new products by our customers and to lesser extent, inventory re-stocking. Based on our current outlook, we expect total business base shipments to increase approximately 52 percent and result in an approximately 20 percentage point improvement in utilization compared to the previous quarter. This translates to sequential revenue growth of approximately 36 percent including our share of SMP. In line with the strength we are seeing at the leading-edge technologies, we expect revenues from 65nm and below technologies to increase approximately 72 percent sequentially and represent approximately 30 percent of our total business base revenues in the second quarter,” said Thomas.
“The improvement in customer orders and the resulting sequential growth expectation into the second quarter are definitely encouraging signs. Due to macroeconomic conditions that continue to be challenging, it is difficult, however, to predict the growth trend beyond the second quarter. While we are adjusting our short-term business plans to meet additional demand for customers, we are continuing to focus on lowering our breakeven point and watching our cash and liquidity position,” said Chia Song Hwee, president & CEO of Chartered.
“As we look forward, we believe our current technology position as well as our roadmap, including the high-k metal-gate based 28nm offering that has already built up significant customer excitement, will support us in delivering significant value to customers as they launch new products that require high performance and energy-efficient characteristics. As we continue to make further operational improvements and widen our customer base, our top priority continues to be bringing Chartered back to sustainable profitability,” concluded Chia.
