SMIC Interim Results Announce Double-digit Revenue Growth for Two Consecutive Quarters

The major international semiconductor foundry manufacturer SMIC International Semiconductor Manufacturing Co., Ltd. announced its unaudited interim results for the six months ended June 30, 2012. Seizing the opportunity of the unexpected growth of the global semiconductor industry in the first half of this year, SMIC has achieved steady growth in the first half of the year. The company achieved a semi-annual sales of 755 million US dollars, an increase of 4.4% compared with the same period of last year, and achieved double-digit revenue growth in the first two quarters of this year, and raised revenue expectations twice. The company achieved a gross profit of US$141.6 million in the first half of the year, an increase of 18.9% over the same period of last year. The gross profit margin was maintained at double digits and sustained healthy growth. In the second quarter of the past, the company has also achieved a single-quarter revenue since its inception, and has turned losses in both operating profits and net profits. Capacity utilization has also climbed from 65.6% in the fourth quarter of last year to 95.2% in the second quarter of this year.

These developments have shown that SMIC's new management team has achieved good results with regard to a series of measures to improve capacity utilization, operational efficiency, and customer service. Dr. Qiu Ciyun, CEO and Executive Director of SMIC, said with joy: “On the one hand, we are committed to the differentiation strategy of the product line, to increase the added value and the average sales price of our products, and to accumulate according to our own characteristics and technologies. We can achieve better product specifications, smaller size, or lower energy consumption to meet customer requirements in competitive and relatively high-margin products. The utilization rate of our 8-port line in Shanghai has been high since this year. Operation shows that we are steadily moving in this direction; on the other hand, we have achieved remarkable results in the production of 12 miles of advanced processes, and the 65/55-nm revenue share has climbed to nearly one-third in the second quarter. The 45/40nm revenue will also significantly increase in the second half of the year, and will continue to research and develop advanced technologies such as 28nm in order to continue to strengthen SMIC's leading position in the wafer foundry industry in mainland China and shorten its lead with the industry. The gap."

For the second half of the year's expectations, Dr. Qiu expressed with confidence that “we are satisfied with the progress of our business this year. Looking forward to the second half of the year, we believe that with our improved quality, improved operational efficiency, differentiated products, and reduced shipments , as well as a solid relationship with international and local customers, will be able to become the preferred Chinese OEM service provider for a long time."