Exhibit 99.1
Chartered Semiconductor | 880 N. McCarthy Blvd., Ste. 100 | 60 Woodlands Industrial Park D | ||||
Manufacturing Ltd. | ||||||
(Regn. No.: 198703584-K ) | Milpitas, California 95035 | Street Two | ||||
Tel: (1) 408.941.1100 | Singapore 738406 | |||||
www.charteredsemi.com | Fax: (1) 408.941.1101 | Tel: (65) 6362.2838 | ||||
Fax: (65) 6362.2938 |
News Release
Investor Contacts: | ||
Suresh Kumar | Lim Li Chuen | |
(1) 408.941.1110 | (65) 6360.4060 | |
sureshk@charteredsemi.com | lclim@charteredsemi.com | |
Media Contacts: | ||
Chartered U.S.: | Chartered Singapore: | |
Tiffany Sparks | Khor Hwee Eng | |
(1) 408.941.1185 | (65) 6360.1748 | |
tiffanys@charteredsemi.com | khorhe@charteredsemi.com |
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 REPORTS RESULTS FOR THIRD QUARTER 2006
• | Chartered revenues of $355.3 million in 3Q 2006, up 22.5 percent from 3Q 2005 and down 2.6 percent sequentially. Revenues including Chartered’s share of SMP of $383.1 million, up 21.1 percent from 3Q 2005 and down 2.7 percent sequentially. | ||
• | Net income of $24.4 million, compared to net loss of $34.5 million in 3Q 2005 and net income of $12.3 million in the previous quarter. |
SINGAPORE – October 20, 2006 – Chartered Semiconductor Manufacturing (Nasdaq: CHRT and SGX-ST: CHARTERED), one of the world’s top dedicated semiconductor foundries, today announced its results for third quarter 2006.
“Chartered revenues in third quarter 2006 were up 23 percent and revenues including our share of SMP were up 21 percent compared to the year-ago quarter. Revenues from advanced technologies, 0.13-micron and below, were the highest in our history in dollar terms and accounted for a record 54 percent of our total business base revenues. Revenues from 90 nanometer (nm) alone grew 27 percent sequentially and contributed 29 percent of our total business base revenues. Net income for the quarter was $24 million, significantly better than the previous guidance,” said George Thomas, senior vice president & CFO of Chartered.
Summary of Third Quarter 2006 Performance
• | Revenues were $355.3 million in third quarter 2006, up 22.5 percent from $290.1 million in third quarter 2005. Revenues including Chartered’s share of SMP were $383.1 million, up 21.1 percent from $316.5 million in third quarter 2005, primarily due to significant growth in the computer sector and to a lesser extent in the consumer sector. Sequentially, revenues were down 2.6 percent from $364.8 million in second quarter 2006. Revenues including Chartered’s share of SMP were down 2.7 percent from $393.7 million in second quarter 2006 primarily due to weakness in the consumer sector and to a lesser extent the communications sector, partially offset by strength in the computer sector. | |
• | Gross profit was $94.3 million, or 26.5 percent of revenues, up from a gross profit of $37.0 million, or 12.8 percent of revenues in the year-ago quarter, primarily due to significantly higher revenues resulting from higher average selling price (ASP) per wafer. Gross profit was up $6.5 million sequentially from $87.9 million, or 24.1 percent of revenues in second quarter 2006, primarily due to richer product mix with higher ASP per wafer and lower depreciation. The depreciation included the impact of re-assessment of projected residual values for eight-inch process equipment used for advanced technologies. This re-assessment will result in lower depreciation over the remaining lives of the equipment. Gross profit for third quarter 2006 included a favorable impact of $4.3 million resulting from this revised estimate. | |
• | Research and development (R&D) expenses were $42.0 million, compared to $31.7 million in the year-ago quarter and $38.2 million in second quarter 2006, primarily due to higher activities related to the advanced 65nm technology node. | |
• | Sales and marketing expenses were $14.1 million, up 23.5 percent compared to $11.4 million in the year-ago quarter and up 15.6 percent from $12.2 million in second quarter 2006, primarily due to higher financial support for pre-contract customer prototyping activities. |
• | General and administrative (G&A) expenses were $11.4 million, up 21.3 percent compared to $9.4 million in third quarter 2005, primarily due to payroll-related expenses. G&A expenses were $9.9 million in second quarter 2006. | |
• | Equity in income of Chartered’s minority-owned joint-venture fab, SMP (Fab 5), was $9.5 million compared to $4.2 million in the year-ago quarter, primarily due to lower depreciation resulting from fully depreciated assets and higher revenues. Compared to the previous quarter, equity in income of SMP was up 20.1 percent from $7.9 million, despite lower revenues, primarily due to lower depreciation resulting from fully depreciated assets. | |
• | Other income (loss), net, was an income of $10.2 million compared to a loss of $4.4 million in the year-ago quarter and a loss of $7.8 million in the previous quarter, primarily due to changes in fair value of an interest rate swap prior to its designation as a hedging instrument. | |
• | Net interest expense was $10.8 million, compared to $14.1 million in the year-ago quarter, primarily due to higher interest income resulting from higher interest rates. | |
• | The financial position of Chartered’s consolidated joint venture fab, Chartered Silicon Partners (CSP or Fab 6), continued to be in a shareholders’ deficit in third quarter 2006, and therefore none of the loss of $4.5 million in the third quarter was allocated to the minority interest. At the end of third quarter 2006, CSP’s shareholders’ deficit was $413.7 million. | |
• | Net income was $24.4 million, or 6.9 percent of revenues, compared to a net loss of $34.5 million, or negative 11.9 percent of revenues, in the year-ago quarter, and a net income of $12.3 million, or 3.4 percent of revenues, in the previous quarter. Net income in third quarter 2006 included a favorable impact of $4.3 million resulting from the revised depreciation estimates. | |
• | Basic earnings per American Depositary Share (ADS) and basic earnings per share in third quarter 2006 were $0.09 and $0.01 respectively, compared with basic loss per ADS and basic loss per share of $0.14 and $0.01 respectively in third quarter 2005. Basic earnings per ADS and basic earnings per share in third quarter 2006 included a favorable impact of $0.02 and $0.00 respectively, resulting from the revised depreciation estimates. Basic earnings (loss) per share is computed by deducting from net income or adding to net (loss) the accretion to redemption value of the convertible redeemable preference shares and using the weighted-average number of common shares outstanding. |
Wafer Shipments and Average Selling Prices (eight-inch equivalent)
• | Shipments in third quarter 2006 were 307.9 thousand wafers, an increase of 13.7 percent compared to 270.7 thousand wafers in third quarter 2005, and a decrease of 5.8 percent compared to 327.0 thousand wafers shipped in second quarter 2006. Shipments including Chartered’s share of SMP in |
third quarter 2006 were 337.0 thousand wafers, an increase of 14.2 percent compared to 295.2 thousand wafers in third quarter 2005 and a decrease of 5.2 percent compared to 355.7 thousand wafers in second quarter 2006. |
• | ASP was $1,136 per wafer in third quarter 2006, an increase of 4.3 percent compared to $1,089 per wafer in second quarter 2006, primarily due to richer product mix. ASP including Chartered’s share of SMP was $1,120 per wafer in third quarter 2006, an increase of 3.5 percent compared to $1,082 per wafer in second quarter 2006. |
Capacity and Utilization
• | Capacity utilization in third quarter 2006 was 74 percent, same as in the year-ago quarter and compared to 82 percent in second quarter 2006. Capacity in third quarter 2006 was up approximately 14 percent compared to third quarter 2005 and up approximately five percent compared to second quarter 2006. Capacity utilization is based on total wafer 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 | 3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | |||||||||||||||
Total wafers shipped | 295.2 | 345.8 | 349.4 | 355.7 | 337.0 | |||||||||||||||
Total capacity | 401.4 | 435.9 | 427.5 | 436.4 | 458.2 | |||||||||||||||
Utilization | 74 | % | 79 | % | 82 | % | 82 | % | 74 | % |
Capacity by Fab
(Thousand 8” equivalent wafers) | 3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | Est. 4Q 2006 | ||||||||||||||||||
Fab 2 | 139.2 | 145.7 | 142.6 | 144.1 | 145.7 | 145.7 | ||||||||||||||||||
Fab 3 | 74.2 | 74.2 | 69.5 | 70.3 | 71.0 | 71.0 | ||||||||||||||||||
Fab 5 (Chartered’s share) | 36.2 | 35.6 | 34.3 | 34.6 | 35.0 | 35.0 | ||||||||||||||||||
Fab 6 | 100.5 | 112.9 | 114.5 | 115.8 | 117.0 | 117.0 | ||||||||||||||||||
Fab 7 | 51.3 | 67.5 | 66.6 | 71.6 | 89.5 | 93.0 | ||||||||||||||||||
Total | 401.4 | 435.9 | 427.5 | 436.4 | 458.2 | 461.7 | ||||||||||||||||||
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)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Communications | 38 | % | 29 | % | 34 | % | 34 | % | 32 | % | ||||||||||
Computer | 25 | % | 22 | % | 19 | % | 25 | % | 37 | % | ||||||||||
Consumer | 32 | % | 45 | % | 45 | % | 39 | % | 29 | % | ||||||||||
Other (b) | 5 | % | 4 | % | 2 | % | 2 | % | 2 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Breakdown by Region
Revenues including Chartered’s share of SMP(Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Americas | 72 | % | 74 | % | 70 | % | 75 | % | 76 | % | ||||||||||
Europe | 10 | % | 9 | % | 12 | % | 9 | % | 10 | % | ||||||||||
Asia-Pacific | 11 | % | 11 | % | 15 | % | 14 | % | 13 | % | ||||||||||
Japan | 4 | % | 4 | % | 3 | % | 2 | % | 1 | % | ||||||||||
Other (b) | 3 | % | 2 | % | — | — | — | |||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Breakdown by Technology (micron)
Revenues including Chartered’s share of SMP(Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
0.09 and below | 24 | % | 28 | % | 25 | % | 22 | % | 29 | % | ||||||||||
Up to 0.13 | 17 | % | 20 | % | 25 | % | 28 | % | 25 | % | ||||||||||
Up to 0.15 | 4 | % | 4 | % | 2 | % | 1 | % | 1 | % | ||||||||||
Up to 0.18 | 9 | % | 12 | % | 11 | % | 14 | % | 13 | % | ||||||||||
Up to 0.25 | 10 | % | 6 | % | 9 | % | 9 | % | 8 | % | ||||||||||
Up to 0.35 | 21 | % | 20 | % | 18 | % | 15 | % | 15 | % | ||||||||||
Above 0.35 | 12 | % | 8 | % | 10 | % | 11 | % | 9 | % | ||||||||||
Other (b) | 3 | % | 2 | % | — | — | — | |||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
(b) | 3Q 2005 – 4Q 2005: Includes revenues from services related to generation of customers’ mask sets. |
Recent Highlights
• | Chartered, IBM, Infineon and Samsung announced first silicon-functional circuits and the availability of design kits based on their collaboration for 45nm low-power process technology. The development of the design kits incorporates design expertise from all four companies in order to facilitate earlier transition to the new process and to continue to drive single-design, multi-fab manufacturing capability. The 45nm low-power process is expected to be installed and fully qualified at Chartered, IBM and Samsung 300mm fabs by the end of 2007. |
CEO Comments
“As we enter the fourth quarter, customers are still working through their inventory situation. With easing oil prices and a more favorable interest rate environment, the upcoming holiday sell-through could be encouraging, leading to further reduction in inventory levels and a rebound in wafer demand in the near future. However, we are mindful that we are heading into a seasonally slow first quarter of 2007 and will continue to be cautious in managing our business,” said Chia Song Hwee, president & CEO of Chartered.
“We remain committed to our growth strategy and the direction of our company remains unchanged. We are seeing good traction with multiple customers at the 65nm node and are engaging with customers on 45nm. As we continue to focus on customer wins and further broadening our leading-edge engagements, it is important that we make structural improvements, even during a difficult market environment, to reduce the breakeven point further. We are not sparing any efforts doing that, as we drive the Company to a path of sustainable profitability and free cash-flow generation,” concluded Chia.
Review and Outlook
“Based on our current outlook, we expect Chartered revenues and revenues including our share of SMP for fourth quarter 2006 to be down approximately five percent, compared to the third quarter,” said Thomas.
“In comparison to the third quarter, we see weakness in the consumer sector primarily due to decline in revenues from video game devices and to a lesser extent in the communications sector, partially offset by strength in the computer sector. We expect a utilization rate of approximately 70 percent for the
fourth quarter. Revenues from 0.13-micron and below technologies, including 90nm, are expected to represent approximately 56 percent of our total business base revenues. Revenues from 90nm alone are expected to grow sequentially and contribute approximately 32 percent of our total business base revenues.”
The outlook for fourth quarter 2006 is as follows:
3Q 2006 | 4Q 2006 Guidance | |||||||||||
Actual | Midpoint and range | Sequential change | ||||||||||
Revenues | $ | 355.3M | $ | 338M,± $6M | Down 3% to Down 7% | |||||||
Revenues including Chartered’s share of SMP | $ | 383.1M | $ | 365M,± $7M | Down 3% to Down 7% | |||||||
ASP (c) | $ | 1,136 | $ | 1,125,± $20 | Up 1% to Down 3% | |||||||
ASP including Chartered’s share of SMP (c) | $ | 1,120 | $ | 1,104,± $25 | Up 1% to Down 4% | |||||||
Utilization | 74 | % | 70%,± 3 | % | — | |||||||
Gross profit (loss) | $ | 94.3M | $ | 68M,± $6M | — | |||||||
Net income (loss) (d) | $ | 24.4M | $ | 5M,± $5M | — | |||||||
Basic earnings (loss) per ADS | $ | 0.09 | $ | 0.01,± $0.02 | — |
(c) | Eight-inch equivalent wafers. | |
(d) | Net income includes the negative profit impact from losses attributable to minority interest, which was $2.2 million in third quarter 2006, and is projected to be approximately $5.0 million in fourth quarter 2006. |
Webcast Conference Call Today
Chartered will be discussing its third quarter 2006 results and fourth quarter 2006 outlook on a conference call today, October 20, 2006, at 8:30 a.m. Singapore time (US time 5:30 p.m. PT/8:30 p.m. ET, Thursday, October 19, 2006). 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 fourth quarter 2006, the Company anticipates issuing its mid-quarter guidance update, via news release, on Tuesday, December 12, 2006, 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.
4Q 2006 | ||||||||||||||||
3Q 2005 | 2Q 2006 | 3Q 2006 | Guidance | |||||||||||||
Actual | Actual | Actual | Midpoint | |||||||||||||
Revenues (e) | $ | 290.1M | $ | 364.8M | $ | 355.3M | $ | 338M | ||||||||
Chartered’s share of SMP revenues | $ | 26.4M | $ | 28.9M | $ | 27.8M | $ | 27M | ||||||||
Revenues including Chartered’s share of SMP | $ | 316.5M | $ | 393.7M | $ | 383.1M | $ | 365M | ||||||||
ASP (e) (f) | $ | 1,035 | $ | 1,089 | $ | 1,136 | $ | 1,125 | ||||||||
ASP of Chartered’s share of SMP revenues (f) | $ | 1,074 | $ | 1,004 | $ | 954 | $ | 900 | ||||||||
ASP including Chartered’s share of SMP (f) | $ | 1,039 | $ | 1,082 | $ | 1,120 | $ | 1,104 |
(e) | Determined in accordance with US GAAP. | |
(f) | Eight-inch equivalent wafers. |
Breakdown by Market Sector
REVENUES (US GAAP) (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Communications | 36 | % | 28 | % | 31 | % | 32 | % | 31 | % | ||||||||||
Computer | 24 | % | 19 | % | 18 | % | 24 | % | 36 | % | ||||||||||
Consumer | 35 | % | 48 | % | 49 | % | 41 | % | 31 | % | ||||||||||
Other (g) | 5 | % | 5 | % | 2 | % | 3 | % | 2 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Chartered’s share of SMP revenues(Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Communications | 54 | % | 42 | % | 75 | % | 63 | % | 51 | % | ||||||||||
Computer | 37 | % | 51 | % | 22 | % | 32 | % | 43 | % | ||||||||||
Consumer | 7 | % | 6 | % | 3 | % | 5 | % | 5 | % | ||||||||||
Other | 2 | % | 1 | % | — | — | 1 | % | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Revenues including Chartered’s share of SMP (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Communications | 38 | % | 29 | % | 34 | % | 34 | % | 32 | % | ||||||||||
Computer | 25 | % | 22 | % | 19 | % | 25 | % | 37 | % | ||||||||||
Consumer | 32 | % | 45 | % | 45 | % | 39 | % | 29 | % | ||||||||||
Other (g) | 5 | % | 4 | % | 2 | % | 2 | % | 2 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Breakdown by Region
Revenues (US GAAP) (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Americas | 74 | % | 76 | % | 72 | % | 78 | % | 79 | % | ||||||||||
Europe | 9 | % | 8 | % | 12 | % | 8 | % | 9 | % | ||||||||||
Asia-Pacific | 11 | % | 11 | % | 13 | % | 13 | % | 11 | % | ||||||||||
Japan | 3 | % | 3 | % | 3 | % | 1 | % | 1 | % | ||||||||||
Other (g) | 3 | % | 2 | % | — | — | — | |||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Chartered’s share of SMP Revenues (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Americas | 43 | % | 49 | % | 45 | % | 37 | % | 39 | % | ||||||||||
Europe | 28 | % | 28 | % | 18 | % | 21 | % | 20 | % | ||||||||||
Asia-Pacific | 9 | % | 17 | % | 30 | % | 29 | % | 30 | % | ||||||||||
Japan | 20 | % | 6 | % | 7 | % | 13 | % | 11 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
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REVENUES INCLUDING CHARTERED’S SHARE OF SMP (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
Americas | 72 | % | 74 | % | 70 | % | 75 | % | 76 | % | ||||||||||
Europe | 10 | % | 9 | % | 12 | % | 9 | % | 10 | % | ||||||||||
Asia-Pacific | 11 | % | 11 | % | 15 | % | 14 | % | 13 | % | ||||||||||
Japan | 4 | % | 4 | % | 3 | % | 2 | % | 1 | % | ||||||||||
Other (g) | 3 | % | 2 | % | — | — | — | |||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
BREAKDOWN BY TECHNOLOGY (micron)
REVENUES (US GAAP) (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
0.09 and below | 26 | % | 31 | % | 27 | % | 24 | % | 31 | % | ||||||||||
Up to 0.13 | 18 | % | 21 | % | 27 | % | 30 | % | 27 | % | ||||||||||
Up to 0.15 | — | — | — | — | — | |||||||||||||||
Up to 0.18 | 6 | % | 9 | % | 7 | % | 9 | % | 7 | % | ||||||||||
Up to 0.25 | 11 | % | 7 | % | 9 | % | 9 | % | 9 | % | ||||||||||
Up to 0.35 | 23 | % | 21 | % | 19 | % | 16 | % | 16 | % | ||||||||||
Above 0.35 | 13 | % | 9 | % | 11 | % | 12 | % | 10 | % | ||||||||||
Other (g) | 3 | % | 2 | % | — | — | — | |||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
CHARTERED’S SHARE OF SMP REVENUES (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
0.09 and below | — | — | — | — | — | |||||||||||||||
Up to 0.13 | — | — | — | — | — | |||||||||||||||
Up to 0.15 | 47 | % | 45 | % | 26 | % | 19 | % | 12 | % | ||||||||||
Up to 0.18 | 43 | % | 40 | % | 56 | % | 75 | % | 80 | % | ||||||||||
Up to 0.25 | 5 | % | 3 | % | 5 | % | 4 | % | 2 | % | ||||||||||
Up to 0.35 | 5 | % | 12 | % | 13 | % | 2 | % | 6 | % | ||||||||||
Above 0.35 | — | — | — | — | — | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
REVENUES INCLUDING CHARTERED’S SHARE OF SMP (Percentage of Total)
3Q 2005 | 4Q 2005 | 1Q 2006 | 2Q 2006 | 3Q 2006 | ||||||||||||||||
0.09 and below | 24 | % | 28 | % | 25 | % | 22 | % | 29 | % | ||||||||||
Up to 0.13 | 17 | % | 20 | % | 25 | % | 28 | % | 25 | % | ||||||||||
Up to 0.15 | 4 | % | 4 | % | 2 | % | 1 | % | 1 | % | ||||||||||
Up to 0.18 | 9 | % | 12 | % | 11 | % | 14 | % | 13 | % | ||||||||||
Up to 0.25 | 10 | % | 6 | % | 9 | % | 9 | % | 8 | % | ||||||||||
Up to 0.35 | 21 | % | 20 | % | 18 | % | 15 | % | 15 | % | ||||||||||
Above 0.35 | 12 | % | 8 | % | 10 | % | 11 | % | 9 | % | ||||||||||
Other (g) | 3 | % | 2 | % | — | — | — | |||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
(g) 3Q 2005 — 4Q 2005: Includes revenues from services related to generation of customers’ mask sets.
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About Chartered
Chartered Semiconductor Manufacturing (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 the needs of customers through its collaborative, joint development approach on a technology roadmap that extends to 45nm. Chartered’s strategy is based on open and comprehensive design enablement solutions, manufacturing enhancement methodologies, and a commitment to flexible sourcing. In Singapore, the company operates a 300mm fabrication facility and four 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 fourth quarter of 2006; projected revenues and average selling prices (including Chartered’s share of SMP), utilization rate, gross profit, net income or profit and earnings per ADS and the expected growth of wafer shipments and revenue (including Chartered’s share of SMP); our expectation of revenue contribution from 0.13-micron and below technologies including 90nm; the revenue from 90nm as a percentage of our total business base revenues; the estimated capacity by fabs for the fourth quarter 2006; the expectation of customers working through their inventory positions and the upcoming holiday sell through; the commitment to our growth strategy and the direction of our company; our customers engagement at 65nm node and 45nm; making of structural improvements to reduce the breakeven point; driving the company to a path of sustainable profitability and free cash flow generation 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, excess inventory, life cycle, market outlook and trends or specific products; competition from other foundries; unforeseen delays, interruptions, performance level and technology mix in our fabrication facilities; our progress on leading-edge products; changes in capacity plans, allocation and process technology mix, 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, Infineon and Samsung); 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; demand and supply outlook in the semiconductor market and the economic conditions in the United States as well as globally. 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 2005 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.
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CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of US Dollars, except share and per share data)
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 | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2006 | 2005 | 2006 | |||||||||||||
Net revenue | $ | 290,133 | $ | 355,331 | $ | 665,521 | $ | 1,075,391 | ||||||||
Cost of revenue | 253,129 | 261,003 | 637,787 | 800,810 | ||||||||||||
Gross profit | 37,004 | 94,328 | 27,734 | 274,581 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 31,709 | 42,022 | 86,700 | 114,339 | ||||||||||||
Sales and marketing | 11,388 | 14,060 | 32,007 | 39,988 | ||||||||||||
General and administrative | 9,366 | 11,361 | 29,340 | 31,075 | ||||||||||||
Fab start-up costs | — | — | 22,697 | — | ||||||||||||
Other operating expense (income) | (173 | ) | 16 | 3,677 | (3,751 | ) | ||||||||||
Total operating expenses | 52,290 | 67,459 | 174,421 | 181,651 | ||||||||||||
Operating income (loss) | (15,286 | ) | 26,869 | (146,687 | ) | 92,930 | ||||||||||
Equity in income (loss) of SMP | 4,229 | 9,547 | (4,027 | ) | 27,664 | |||||||||||
Other income (loss), net | (4,387 | ) | 10,203 | 1,264 | (147 | ) | ||||||||||
Interest expense, net | (14,062 | ) | (10,770 | ) | (25,089 | ) | (35,306 | ) | ||||||||
Income (loss) before income taxes | (29,506 | ) | 35,849 | (174,539 | ) | 85,141 | ||||||||||
Income tax expense | 5,007 | 11,419 | 11,593 | 23,117 | ||||||||||||
Net income (loss) | (34,513 | ) | 24,430 | (186,132 | ) | 62,024 | ||||||||||
Less: Accretion to redemption value of convertible redeemable preference shares | 795 | 2,336 | 795 | 7,118 | ||||||||||||
Net income (loss) available to ordinary shareholders | $ | (35,308 | ) | $ | 22,094 | $ | (186,927 | ) | $ | 54,906 | ||||||
Net earnings (loss) per ordinary share and ADS | ||||||||||||||||
Basic net earnings (loss) per ordinary share | $ | (0.01 | ) | $ | 0.01 | $ | (0.07 | ) | $ | 0.02 | ||||||
Diluted net earnings (loss) per ordinary share | $ | (0.01 | ) | $ | 0.01 | $ | (0.07 | ) | $ | 0.02 | ||||||
Basic net earnings (loss) per ADS | $ | (0.14 | ) | $ | 0.09 | $ | (0.74 | ) | $ | 0.22 | ||||||
Diluted net earnings (loss) per ADS | $ | (0.14 | ) | $ | 0.08 | $ | (0.74 | ) | $ | 0.19 | ||||||
Number of common shares (in millions) used in computing: | ||||||||||||||||
Basic net earnings (loss) per ordinary share | 2,511.9 | 2,535.1 | 2,510.9 | 2,525.5 | ||||||||||||
Effect of dilutive options | — | 325.3 | — | 334.6 | ||||||||||||
Diluted net earnings (loss) per ordinary share | 2,511.9 | 2,860.4 | 2,510.9 | 2,860,1 | ||||||||||||
Number of ADS (in millions) used in computing: | ||||||||||||||||
Basic net earnings (loss) per ADS | 251.2 | 253.5 | 251.1 | 252.5 | ||||||||||||
Effect of dilutive options | — | 32.5 | — | 33.5 | ||||||||||||
Diluted net earnings (loss) per ADS | 251.2 | 286.0 | 251.1 | 286.0 | ||||||||||||
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)
Determined in accordance with US GAAP | ||||||||
As of | ||||||||
December 31, | September 30, | |||||||
2005 | 2006 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 819,856 | $ | 796,905 | ||||
Marketable investments | 22,467 | 2,314 | ||||||
Receivables, net | 184,897 | 187,329 | ||||||
Inventories | 134,240 | 166,697 | ||||||
Restricted cash | 2,832 | 42,494 | ||||||
Other current assets | 119,284 | 22,160 | ||||||
Total current assets | 1,283,576 | 1,217,899 | ||||||
Investment in SMP | 50,384 | 49,425 | ||||||
Technology licenses, net | 106,612 | 91,414 | ||||||
Property, plant and equipment, net | 2,049,695 | 2,117,731 | ||||||
Other non-current assets | 27,027 | 41,278 | ||||||
Total assets | $ | 3,517,294 | $ | 3,517,747 | ||||
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERENCE SHARES AND SHAREHOLDERS’ EQUITY | ||||||||
Payables | $ | 166,681 | $ | 216,843 | ||||
Current installments of long-term debt and capital lease obligations | 322,453 | 77,352 | ||||||
Other current liabilities | 244,119 | 198,316 | ||||||
Total current liabilities | 733,253 | 492,511 | ||||||
Long-term debt and capital lease obligations, excluding current installments | 1,169,034 | 1,329,843 | ||||||
Other non-current liabilities | 17,970 | 20,738 | ||||||
Total liabilities | 1,920,257 | 1,843,092 | ||||||
Convertible redeemable preference shares | 250,663 | 243,816 | ||||||
Shareholders’ equity | 1,346,374 | 1,430,839 | ||||||
Total liabilities, convertible redeemable preference shares and shareholders’ equity | $ | 3,517,294 | $ | 3,517,747 | ||||
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US Dollars)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US Dollars)
Determined in accordance with US GAAP | ||||||||
For The Nine Months Ended | ||||||||
September 30, | September 30, | |||||||
2005 | 2006 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | (186,132 | ) | $ | 62,024 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Equity in (income) loss of SMP | 4,027 | (27,664 | ) | |||||
Cash dividends received from SMP | 6,300 | 28,631 | ||||||
Depreciation and amortization | 375,236 | 383,965 | ||||||
Foreign currency exchange loss, net | 507 | 2,408 | ||||||
Gain on disposal of property, plant and equipment | (264 | ) | (4,008 | ) | ||||
Others, net | 1,368 | 4,844 | ||||||
Changes in assets and liabilities: | ||||||||
Receivables | (38,464 | ) | (7,612 | ) | ||||
Inventories | (69,875 | ) | (32,457 | ) | ||||
Other current assets | (569 | ) | (8,769 | ) | ||||
Payables and other liabilities | 126,402 | 20,163 | ||||||
Net cash provided by operating activities | 218,536 | 421,525 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Payments for property, plant and equipment | (525,010 | ) | (374,944 | ) | ||||
Payments for technology licenses | (6,015 | ) | (7,422 | ) | ||||
Refundable deposits placed with a vendor | — | (15,000 | ) | |||||
Refund of deposits placed with a vendor | — | 111,656 | ||||||
Proceeds from sale of property, plant and equipment | 319 | 8,852 | ||||||
Proceeds from redemption, maturity and disposal of marketable investments | 45,000 | 20,998 | ||||||
Return of capital from SMP | — | 4,133 | ||||||
Increase in restricted cash | (2,832 | ) | (39,662 | ) | ||||
Others | 631 | (540 | ) | |||||
Net cash used in investing activities | (487,907 | ) | (291,929 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Debt | ||||||||
Borrowings | 1,130,068 | 492,915 | ||||||
Repayments | (910,172 | ) | (635,010 | ) | ||||
Capital lease payments | — | (3,003 | ) | |||||
Receipts of customer deposits | 80,920 | 45,183 | ||||||
Refund of customer deposits | (3,267 | ) | (61,321 | ) | ||||
Issuance of ordinary shares | 1,946 | 2,182 | ||||||
Issuance of convertible redeemable preference shares | 248,069 | — | ||||||
Others | — | 5,752 | ||||||
Net cash provided by (used in) financing activities | 547,564 | (153,302 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 278,193 | (23,706 | ) | |||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (502 | ) | 755 | |||||
Cash and cash equivalents at the beginning of the period | 539,399 | 819,856 | ||||||
Cash and cash equivalents at the end of the period | $ | 817,090 | $ | 796,905 | ||||