Weak sales leave SMIC with loss for quarter
Semiconductor Manufacturing International Corp (SMIC), the mainland's largest contract chip maker, is hoping for better days after it reported weak earnings in the quarter to June and a dim outlook for the rest of the year.
'SMIC still has room for a lot of improvement and for opportunity to capture market share globally,' Chiu Tzu-yin, the company's newly appointed chief executive, said in a conference call with analysts yesterday. 'I hope to bring clearer direction to SMIC to focus on its specific value-added opportunity.'
The Shanghai-based firm on Wednesday reported a second-quarter net loss of US$3.8 million, from a net profit of US$96 million a year earlier and US$10.2 million in the past quarter, because of a slowdown in sales.
Gross margin fell to 14.3 per cent, compared with 16 per cent in the previous year and 18.6 per cent in the first quarter.
Revenue decreased 5.9 per cent to US$352.4 million from US$374.4 million a year ago and was down 4.9 per cent from US$370.6 million in the first quarter. Chief financial officer Gary Tseng said revenue in the quarter to September was forecast to decrease from 14 per cent to 17 per cent from the second quarter.
Gross margin was also expected to range from zero to 3 per cent.
'The overall demand from both international and domestic customers is weaker than expected due to relatively soft end-market consumption and high inventory, in addition to sudden customer product changes,' Tseng said.
'We currently do not see any particular strength from customer demand for the back-to-school and holiday seasons, so we currently remain cautious on our overall second-half outlook.'
Shares of SMIC fell 3.8 per cent to close at 38 HK cents yesterday.