Chartered Reports Fourth Quarter and Year 2002 Results.Business Editors MILPITAS Milpitas (mĭl'pē`təs), city (1990 pop. 50,686), Santa Clara co., W Calif., a suburb of San Jose, southeast of San Francisco; inc. 1954. Manufactures include computers and paint. , Calif.--(BUSINESS WIRE)--Jan. 28, 2003 Chartered Semiconductor (Nasdaq:CHRT CHRT Canadian Human Rights Tribunal CHRT Chert (lithological term) CHRT Consolidated Human Resource Technology ) 4Q 2002 -- In February, Chartered signed agreements with the Virtual Component Exchange (VCX) and Avant! Corporation as a part of the Company's commitment to provide the foundry industry with innovative ways for designers to access complete and flexible solutions that address their design challenges. These programs focus on improving the overall time to market for Chartered's customers and reducing costs by increasing the probability of first-time silicon success. -- In April, Chartered and Legerity entered into a long-term manufacturing agreement, establishing Chartered as a preferred foundry for Legerity's bipolar communications IC products. Chartered's solutions are used by Legerity in providing products to the communications market, including high-voltage line interface devices for voice over broadband, public voice network applications, and high-speed, low-power line driver products for ADSL applications. -- In April, Chartered announced that it had jointly developed breakthrough low-power processes at 0.18-micron and 0.13-micron technology nodes with STMicroelectronics, for applications such as mobile phones and personal digital assistants, and for use in other communications, consumer and industrial applications. -- In the second quarter, as part of the Company's commitment to an open, flexible IP model that will improve overall time to market for customers, Chartered announced joint initiatives to reduce time-to-use for third-party IP in systems-on-chip designs and to streamline the selection and acquisition process of silicon-hardened IP targeted for Chartered processes. Agreements were announced with Unive and Fujitsu Digital Technology to make their specialized mixed-signal IP available worldwide through Chartered's Virtual Component Exchange connection. Chartered also announced that it had entered into a licensing agreement with ARM, as the first foundry to use ARM cores as validation vehicles in shortening time to market for customers. -- In June, Chartered's board of directors appointed Chia Song Hwee president & CEO. In conjunction with Chia's appointment, the board also named George Thomas as vice president & CFO, succeeding Chia. -- In September, Chartered announced a joint technology agreement with IMEC, Europe's leading independent R&D center for microelectronics, that is expected to result in Chartered offering 0.18-micron silicon germanium (SiGe) BiCMOS manufacturing capabilities by the second half of 2003. -- In October, Alliance Semiconductor Corporation announced its 18-megabit synchronous SRAM family fabricated using Chartered's 0.13-micron copper process technology. The 18-megabit synchronous SRAM supports Alliance's aggressive product roadmap for devices currently using Chartered's 0.13-micron technology and in the future, 90-nm technology. -- In October, Chartered received net proceeds of approximately $612 million from its eight-for-ten rights offering. The Company issued 1,109.6 million new shares as part of this offering. -- In November, Chartered and IBM announced a joint development and manufacturing agreement designed to provide customers with greater access to leading-edge semiconductor technologies and sourcing flexibility. Under the multi-year development agreement, Chartered and IBM will jointly develop and align on 90-nm and 65-nm logic processes for foundry chip production on 300 millimeter (mm) silicon wafers. Under the agreement, the two companies may also explore an extension to include 45-nm development. In addition, the agreement also includes a reciprocal manufacturing arrangement between Chartered and IBM. Chartered will be able to offer its customers capacity in IBM's new 300mm chip manufacturing facility in East Fishkill, N.Y. and in turn, IBM expects to utilize capacity in Chartered's 300mm Fab 7 in Singapore, after it becomes operational. Chartered Semiconductor Manufacturing Chartered Semiconductor Manufacturing SGX: C27 NASDAQ: CHRT (abbreviated CSM) is the world's fourth largest dedicated independent semiconductor foundry, with its headquarters and main operations located in the Woodlands Industrial Park, Kranji Singapore. (Nasdaq:CHRT) (SGX-ST:CHARTERED), one of the world's top three silicon foundries See foundry. , today announced revenues and net loss for its fourth quarter and year ended December December: see month. 31, 2002. "The market environment for our industry continued to be very challenging during 2002," said Chia Song Hwee, president & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Chartered. "At the beginning of the year, most market observers expected that 2002 would be a year of solid growth. However, the latest estimates indicate that there was little or no year-over-year growth as three quarters of sequential One after the other in some consecutive order such as by name or number. increase were followed by an abnormally ab·nor·mal adj. Not typical, usual, or regular; not normal; deviant. [Alteration (influenced by ab-1) of obsolete anormal, from Medieval Latin low fourth quarter. For Chartered, revenues including SMP (Symmetric MultiProcessing) A multiprocessing architecture in which multiple CPUs, residing in one cabinet, share the same memory. SMP systems provide scalability. As business increases, additional CPUs can be added to absorb the increased transaction volume. grew 62% from fourth quarter 2001 to fourth quarter 2002, compared to the semiconductor market, which market observers estimate grew approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 20% over that period. While this strength in relative performance -- largely driven by shipments at the leading-edge technologies -- is a step in the right direction for Chartered, we need to move more quickly in returning Chartered to profitability. "In fourth quarter 2002, shipments of 0.18-micron and below product represented 39% of total revenues, up from 13% in the year-ago quarter. And also during the quarter, we achieved our goal of first revenue shipments of our 0.13-micron product offering. Even more important to Chartered's future, we announced during the quarter a milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. joint-development agreement with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) for 90-nanometer (nm) and 65-nm technologies. We believe this puts us at the forefront of technology development in our industry," Chia said. Summary of Fourth Quarter 2002 Performance -- Net revenues were $107.9 million in fourth quarter 2002, down 16.7% compared to third quarter 2002. Including Chartered's share of Silicon Manufacturing Partners (SMP or Fab 5), net revenues were $125.3 million, down 10.7% from $140.4 million in the third quarter, primarily due to the computer segment and to a lesser extent, the memory segment partially offset by increases in the communications segment. SMP is a minority-owned joint-venture company and therefore, under the Company's US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). reporting, its revenues are not consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: . Compared to fourth quarter 2001, net revenues were up 41.9% from $76.1 million. Including Chartered's share of SMP, net revenues were $125.3 million, up 62.1% from $77.3 million in the year-ago quarter. Revenues were significantly higher in the communications segment, and to a lesser extent, the consumer and computer segments. -- Gross loss was $53.9 million, or negative 49.9% of net revenues, an improvement from a loss of $74.5 million, or negative 98.0% of net revenues in the year-ago quarter, primarily due to significantly higher revenues. -- Research and development (R&D) expenses were $28.1 million, an increase of 33.7% from the year-ago quarter, primarily due to a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact in fourth quarter 2001, related to cost sharing associated with the joint-development agreement with Agere. -- Sales and marketing expenses were $9.8 million, down 33.2% compared to $14.7 million in the year-ago quarter, primarily due to lower support for customer prototyping (1) Creating a demo of a new system. Prototyping is essential for clarifying information requirements. The design of a system (functional specs) must be finalized before the system can be built. activity. -- Other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $10.0 million in fourth quarter 2002, associated with the workforce re-sizing announced in October October: see month. 2002 and a fixed asset write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. . -- Equity in loss of our minority-owned joint-venture fab, SMP (Fab 5), was a loss of $11.5 million compared to a loss of $27.9 million in the year-ago quarter, primarily due to significantly higher revenues. -- Other income was $4.4 million, up 147.3% from $1.8 million in fourth quarter 2001, primarily due to an increase in grant income. -- Net interest expense was $4.7 million compared to a net expense of $5.8 million in the year-ago quarter, primarily due to lower interest rates resulting in lower interest expense. -- Exchange gain was $0.3 million, compared to $4.4 million in fourth quarter 2001, due to the fluctuations of the Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and yen and Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). dollar against the US dollar. -- Minority interest in loss of our joint-venture fab, Chartered Silicon Partners (CSP (1) (Certified Systems Professional) An earlier award for successful completion of an ICCP examination in systems development. See ICCP. (2) (Commerce Service P or Fab 6), was $17.6 million compared to $18.9 million in the year-ago quarter, primarily due to higher revenues, partially offset by higher depreciation. -- Net loss of $108.7 million, or negative 100.7% of net revenues, reflected an improvement of $18.5 million from a net loss of $127.2 million, or negative 167.2% of net revenues, in the year-ago quarter. -- Loss per American Depositary Share American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. (ADS) and loss per share in fourth quarter 2002 were $0.45 and $0.05 respectively, compared with a loss per ADS and loss per share of $0.80 and $0.08 respectively in fourth quarter 2001. Average ADS count and ordinary share count increased by 81.9 million and 818.6 million respectively, primarily due to the eight-for-ten rights offering completed in October 2002. Summary of Year 2002 Performance -- Net revenues were $449.2 million, down 2.9% compared to $462.7 million in 2001. Including Chartered's share of its minority-owned joint-venture company, Silicon Manufacturing Partners (SMP or Fab 5), net revenues were $484.8 million, up 1.2% from $479.0 million a year ago. SMP is a minority-owned joint-venture company and therefore, under the Company's US GAAP reporting, its revenues are not consolidated. Revenues were up in the consumer, computer and communications segment and down significantly in the memory segment. -- Gross loss was $179.5 million, or negative 40.0% of net revenues, an improvement from a loss of $202.6 million or negative 43.8% of net revenues in 2001, primarily due to reductions in manufacturing cost. -- Research and development (R&D) expenses increased 14.9% to $95.3 million from $82.9 million in 2001, due to increased investments to accelerate the Company's technology roadmap The context of product management The existence of product managers in the product software industry indicates that software is becoming more and more commercialized as a standard product. , which provides customers a breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is of processes enabling systems-level integration. -- Pre-production fab start-up Start-up The earliest stage of a new business venture. costs were $8.3 million, all related to Fab 7, compared to $13.3 million in 2001, primarily due to moderated activity level during the year. -- Sales and marketing expenses were $41.2 million, up 6.5% compared to $38.7 million in 2001, primarily due to expansion of worldwide sales and marketing activities to further enhance the level of customer support. -- Other operating expenses were $10.0 million in 2002, associated with the workforce re-sizing announced in October 2002 and a fixed asset write-off. -- Equity in loss of our minority-owned joint-venture fab, SMP (Fab 5), was a loss of $84.8 million compared to a loss of $92.7 million a year ago, primarily due to higher revenues. -- Other income was $23.6 million, up 19.8% from $19.7 million in 2001, primarily due to an increase in grant income. -- Net interest expense was $25.0 million compared to an income of $6.6 million in 2001, primarily due to lower interest income resulting from lower interest rates and to a lesser extent a lower average cash balance. -- Exchange loss was $2.0 million, compared to a gain of $4.2 million, primarily due to currency fluctuations of the Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. and Singapore dollar against the US dollar. -- Minority interest in loss of our joint-venture fab, CSP (Fab 6), was $55.6 million compared to $72.6 million in 2001, reflecting the improved financial performance of this fab which resulted primarily from significantly higher revenues, partially offset by increased depreciation. -- Net loss of $417.1 million, or negative 92.8% of net revenues, reflected an increase of $33.1 million from a net loss of $384.0 million, or negative 83.0% of net revenues in 2001. -- Loss per American Depositary Share (ADS) and loss per share in 2002 were $2.32 and $0.23 respectively, compared with the loss per ADS and loss per share of $2.42 and $0.24 respectively in 2001. Average ADS count and ordinary share count increased by 21.0 million and 210.1 million respectively, primarily due to the eight-for-ten rights offering completed in October 2002. Wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. Shipments and Average Selling Prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. -- Shipments in fourth quarter 2002 were 104.9 thousand wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. (eight-inch equivalent), an increase of 45.5% compared to 72.1 thousand wafers (eight-inch equivalent) in fourth quarter 2001. Shipments in fourth quarter 2002 decreased by 6.2% compared to 111.9 thousand wafers (eight-inch equivalent) shipped in third quarter 2002. Shipments in 2002 were 417.0 thousand wafers (eight-inch equivalent), an increase of 6.7% compared to 390.7 thousand wafers (eight-inch equivalent) in 2001. -- Average Selling Price (ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). ) decreased by 2.5% to $1,029 per wafer in fourth quarter 2002 compared to $1,055 per wafer in fourth quarter 2001. Compared to third quarter 2002, ASP declined 11.1% from $1,157 per wafer, primarily due to a shift in customer mix and to a lesser extent, pricing declines. ASP decreased by 9.0% to $1,077 per wafer in 2002, compared to $1,184 per wafer in 2001, primarily due to pricing declines which more than offset the favorable impact of a richer product mix. -- Capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. in the fourth quarter 2002 was 39% compared to 25% in the year-ago quarter. Compared to third quarter 2002, capacity utilization was unchanged at 39%. Capacity utilization was 37% in 2002, compared to 35% in 2001. The capacity level in fourth quarter 2002 decreased approximately 1% from third quarter 2002. The capacity level for 2002 increased approximately 4% from 2001. Market Dynamics The following business statistics tables provide information on revenues by market segment, region and technology. These tables include revenues from Chartered's share of its minority-owned joint-venture company, SMP (Fab 5), which under the Company's US GAAP reporting are not consolidated.
Revenue Breakdown by Market Segment
Percentage of Revenues (%)
Market Segment 4Q 2001 1Q 2002 2Q 2002 3Q 2002 4Q 2002
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Communications 22 23 30 40 44
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Computer 52 44 47 40 37
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Consumer 16 22 13 13 14
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Memory 8 9 9 6 4
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Other 2 2 1 1 1
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Revenue Breakdown by Region
Percentage of Revenues (%)
Region 4Q 2001 1Q 2002 2Q 2002 3Q 2002 4Q 2002
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Americas 75 66 71 73 62
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Europe 7 5 7 14 16
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Asia-Pacific 7 11 11 8 15
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Japan 11 18 11 5 7
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Revenue Breakdown by Technology
Percentage of Revenues (%)
Technology Node (micron) 4Q 2001 1Q 2002 2Q 2002 3Q 2002 4Q 2002
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0.13 and below 0 0 0 0 1
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Up to 0.15 0 0 0 0 2
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Up to 0.18 13 10 24 40 36
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Up to 0.25 23 30 24 19 19
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Up to 0.35 34 31 29 21 24
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Above 0.35 30 29 23 20 18
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Chartered's top five customers in 2002, in order of revenue significance (excluding revenues from SMP) were: Agilent (Agilent Technologies, Santa Clara, CA, www.agilent.com) The test and measurement subsidiary of HP. In 1999, HP split off the division that started the company into an independent subsidiary named Agilent Technologies. At the time, the $2. , Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. , Broadcom Broadcom Corporation is an American supplier of integrated circuits (ICs) for broadband communications. Founded in 1991 by Henry Samueli (chairman and CTO) and Henry Nicholas, it became a public company in 1998 and now employs over 5,000 people worldwide. , Ricoh Ricoh Company, Ltd. (株式会社リコー and Standard Microsystems. Collectively, these customers accounted for approximately 53% of total revenues in 2002. Agilent, Motorola and Broadcom each exceeded 10% of total revenues. Year 2002 Highlights and Events -- In February, Chartered signed agreements with the Virtual Component Exchange (VCX) and Avant! Corporation as a part of the Company's commitment to provide the foundry industry with innovative ways for designers to access complete and flexible solutions that address their design challenges. These programs focus on improving the overall time to market for Chartered's customers and reducing costs by increasing the probability of first-time silicon success. -- In April, Chartered and Legerity entered into a long-term manufacturing agreement, establishing Chartered as a preferred foundry for Legerity's bipolar communications IC products. Chartered's solutions are used by Legerity in providing products to the communications market, including high-voltage line interface devices for voice over broadband, public voice network applications, and high-speed, low-power line driver products for ADSL applications. -- In April, Chartered announced that it had jointly developed breakthrough low-power processes at 0.18-micron and 0.13-micron technology nodes with STMicroelectronics, for applications such as mobile phones and personal digital assistants, and for use in other communications, consumer and industrial applications. -- In the second quarter, as part of the Company's commitment to an open, flexible IP model that will improve overall time to market for customers, Chartered announced joint initiatives to reduce time-to-use for third-party IP in systems-on-chip designs and to streamline the selection and acquisition process of silicon-hardened IP targeted for Chartered processes. Agreements were announced with Unive and Fujitsu Digital Technology to make their specialized mixed-signal IP available worldwide through Chartered's Virtual Component Exchange connection. Chartered also announced that it had entered into a licensing agreement with ARM, as the first foundry to use ARM cores as validation vehicles in shortening time to market for customers. -- In June, Chartered's board of directors appointed Chia Song Hwee president & CEO. In conjunction with Chia's appointment, the board also named George Thomas as vice president & CFO, succeeding Chia. -- In September, Chartered announced a joint technology agreement with IMEC, Europe's leading independent R&D center for microelectronics, that is expected to result in Chartered offering 0.18-micron silicon germanium (SiGe) BiCMOS manufacturing capabilities by the second half of 2003. -- In October, Alliance Semiconductor Corporation announced its 18-megabit synchronous SRAM family fabricated using Chartered's 0.13-micron copper process technology. The 18-megabit synchronous SRAM supports Alliance's aggressive product roadmap for devices currently using Chartered's 0.13-micron technology and in the future, 90-nm technology. -- In October, Chartered received net proceeds of approximately $612 million from its eight-for-ten rights offering. The Company issued 1,109.6 million new shares as part of this offering. -- In November, Chartered and IBM announced a joint development and manufacturing agreement designed to provide customers with greater access to leading-edge semiconductor technologies and sourcing flexibility. Under the multi-year development agreement, Chartered and IBM will jointly develop and align on 90-nm and 65-nm logic processes for foundry chip production on 300 millimeter (mm) silicon wafers. Under the agreement, the two companies may also explore an extension to include 45-nm development. In addition, the agreement also includes a reciprocal manufacturing arrangement between Chartered and IBM. Chartered will be able to offer its customers capacity in IBM's new 300mm chip manufacturing facility in East Fishkill, N.Y. and in turn, IBM expects to utilize capacity in Chartered's 300mm Fab 7 in Singapore, after it becomes operational. Review and Outlook "We believe that 2003 will be a transition year for the semiconductor industry, with a somewhat weak first half followed by accelerating growth in the subsequent quarters, as the global economies begin to improve," said George Thomas George Thomas may refer to:
The Fabless Semiconductor Association (FSA) defines fabless as follows: Fabless (without fab) refers to the business methodology of outsourcing the manufacturing of silicon wafers, which hundreds of semiconductor companies have adopted. and accelerated strategic outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. by integrated device manufacturers See IDM. . "Looking at Chartered's total business base, which includes our share of SMP, revenues are expected to increase 5 to 10% and average selling price is expected to be essentially flat, sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen in first quarter 2003," Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs continued. "By market segment, declines in the computer segment, where we believe one or two customers are working through excess inventory, are being more than offset by increased revenues to the communications segment. We are again benefiting from success in ramping 0.18-micron and below product, and expect a revenue percentage contribution in the low 40s, compared to 10% in first quarter 2001. We are continuing to look for additional ways to improve Chartered's cost effectiveness and return to profitability more quickly." The outlook for the first quarter 2003 is as follows: -- Revenues: down approximately 5-10% sequentially. Revenues including Chartered's share of SMP, up approximately 5-10% sequentially. SMP is a minority-owned joint-venture company and therefore, under the Company's US GAAP reporting, its revenues are not consolidated -- ASP: down approximately 10% sequentially. ASP including Chartered's share of SMP, essentially flat sequentially -- Utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be : in the low 40s -- Gross loss: approximately $58 million to $60 million -- Net loss: approximately $96 million to $99 million -- Loss per ADS: approximately $0.38 to $0.40 For year 2003: -- R&D expenditures: approximately $120 million, up approximately 26%, compared to $95 million in 2002 -- Capital expenditures: approximately $275 million, compared to $420 million in 2002 -- Depreciation and amortization: approximately $435 million, compared to $452 million in 2002 -- Wafer capacity: approximately 1,233 thousand wafers (eight-inch equivalent), compared to 1,193 thousand wafers in 2002 As indicated in November November: see month. , the reciprocal Bilateral; two-sided; mutual; interchanged. Reciprocal obligations are duties owed by one individual to another and vice versa. A reciprocal contract is one in which the parties enter into mutual agreements. manufacturing agreement with IBM will allow Chartered to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. the pilot production of Fab 7 until late third quarter 2004. "In 2002, Chartered began to see the results of our efforts to close the technology gap and broaden our service offering, as evidenced by new customer engagements and expanded relationships with existing customers. In addition, the volume of contacts from existing and prospective customers since the November 2002 announcement of our joint development and 300mm sourcing agreement with IBM offers us further encouragement that this momentum will continue. Our financial resources of more than $1.2 billion in cash plus more than $0.5 billion in credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities give us substantial flexibility and strength in responding to market opportunities," said Chia. Webcast Conference Call Today Chartered will be discussing its fourth-quarter and year 2002 results and first-quarter 2003 outlook on a conference call today, January January: see month. 29, 2003, at 9:00 a.m. Singapore time (US time 5:00 p.m. PT/8:00 p.m. ET, January 28, 2003). A webcast of the conference call will be available to all interested parties on Chartered's Web site at www.charteredsemi.com, under Investor Information, Releases & Confcalls, or at http://investor.charteredsemi.com/releases.cfm. Mid-Quarter Guidance The Company provides a guidance update midway Midway, island group (2 sq mi/5.2 sq km), central Pacific, c.1,150 mi (1,850 km) NW of Honolulu, comprising Sand and Eastern islands with the surrounding atoll. Discovered by Americans in 1859, Midway was annexed in 1867. A cable station was opened in 1903. through each quarter. For first quarter 2003, the Company anticipates issuing its mid-quarter guidance update, via news release, on Tuesday Tuesday: see week. , March 11, 2003, Singapore time. About Chartered Chartered Semiconductor Manufacturing, one of the world's top three silicon foundries, is forging a customized approach to outsourced Outsourced is a modern day comedy of cross-cultural conflict and romance, directed by John Jeffcoat, released in 2007. Synopsis Todd Anderson (Josh Hamilton) spends his days managing a customer call center for American Novelty Products in Seattle, until his job, semiconductor manufacturing by building lasting and collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. partnerships with its customers. The Company provides flexible and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. manufacturing solutions for customers, enabling the convergence convergence Mathematical property of infinite series, integrals on unbounded regions, and certain sequences of numbers. An infinite series is convergent if the sum of its terms is finite. of communications, computing computing - computer and consumer markets. In Singapore, Chartered operates five fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. facilities and has a sixth fab, which will be developed as a 300mm facility. A company with both global presence and perspective, Chartered is traded on both the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. (Nasdaq:CHRT) and on the Singapore Exchange “SGX” redirects here. For other uses, see SGX (disambiguation). Singapore Exchange Limited SGX: S68 (SGX) is the stock exchange in Singapore. SGX was formed on December 1 1999, following the merger of two established and well-respected financial (SGX-ST:CHARTERED). Chartered's 3,500 employees are based at 11 locations around the world. Information about Chartered can be found at www.charteredsemi.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the provisions of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our near term and long term outlook for the year 2003 and beyond including projected revenues (including Chartered's share of SMP), average selling prices, utilization, gross loss, net loss and loss per American Depositary Share; R&D expenditures, capital expenditures, depreciation and amortization, wafer capacity and pilot production of Fab 7; our current and future product and service offerings; our financial resources; our 0.18-micron SiGe See silicon germanium. BiCMOS manufacturing capabilities; our joint development of 90-nm and 65-nm processes with IBM and opportunity for 45-nm development; our reciprocal manufacturing arrangement with IBM; our ability to offer 300mm capacity; and our expectation of the foundry industry growth rate, the computer and communications segment; our expected revenue contribution from our 0.18-micron and below products and our ability to close the technology gap and broaden our service offering 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 market outlook and trends, specifically in the foundry services and communications and computer segments; the growth rate of fabless companies and the outsourcing strategy of integrated device manufacturers; the rate of semiconductor market recovery; economic conditions in the United States as well as globally; customer demands; unforeseen delays or interruptions in our plans for our fabrication facilities (including Fab 7); the performance level of and technology mix in our fabrication facilities; the successful implementation of our partnership, technology and supply alliances; and competition. 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 at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. . In addition to the foregoing factors, a description of certain other risks and uncertainties which could cause actual results to differ materially can be found in the section captioned "Risk Factors" in our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on 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.
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. Dollars, except share and per share data)
US GAAP
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2002 2001 2002
---------- ---------- --------- ----------
Net revenue $76,066 $107,925 $462,656 $449,241
Cost of revenue 150,615 161,790 665,261 628,726
---------- ---------- --------- ----------
Gross loss (74,549) (53,865) (202,605) (179,485)
---------- ---------- --------- ----------
Operating expenses:
Research and development 20,991 28,059 82,897 95,285
Fab start-up costs 2,330 2,586 13,329 8,338
Sales and marketing 14,742 9,846 38,659 41,182
General and administrative 9,143 8,127 42,671 43,103
Other Operating Expenses -- 10,025 -- 10,025
---------- ---------- --------- ----------
Total operating expenses 47,206 58,643 177,556 197,933
---------- ---------- --------- ----------
Operating loss (121,755) (112,508) (380,161) (377,418)
Equity in loss of SMP (27,869) (11,521) (92,683) (84,846)
Other income 1,766 4,367 19,718 23,632
Interest income 6,807 4,954 46,225 16,637
Interest expense (12,577) (9,630) (39,652) (41,661)
Exchange gain (loss) 4,384 264 4,216 (1,966)
---------- ---------- --------- ----------
Loss before income taxes (149,244) (124,074) (442,337) (465,622)
Income tax expense 3,229 (2,191) (14,244) (7,029)
---------- ---------- --------- ----------
Loss before minority
interest (146,015) (126,265) (456,581) (472,651)
Minority interest in loss
of CSP 18,863 17,613 72,629 55,563
---------- ---------- --------- ----------
Net loss $(127,152) $(108,652) $(383,952)$(417,088)
========== ========== ========= ==========
Net loss per share and ADS(1)
Basic net loss per share $ (0.08) $ (0.05) $ (0.24) $ (0.23)
Diluted net loss per share (0.08) (0.05) (0.24) (0.23)
Basic net loss per ADS $ (0.80) $ (0.45) $ (2.42) $ (2.32)
Diluted net loss per ADS (0.80) (0.45) (2.42) (2.32)
Number of shares (in millions)
used in computing:
- basic net loss per
share 1,590.3 2,408.8 1,589.0 1,799.1
- effect of dilutive
options -- -- -- --
-------- -------- -------- ---------
- diluted net loss per
share 1,590.3 2,408.8 1,589.0 1,799.1
-------- -------- -------- ---------
Number of ADS (in millions)
used in computing:
- basic net loss per ADS 159.0 240.9 158.9 179.9
- effect of dilutive
options -- -- -- --
-------- -------- -------- ---------
- diluted net loss per
ADS 159.0 240.9 158.9 179.9
-------- -------- -------- ---------
(1) Share and per share data reflect
a retroactive adjustment due to the rights offering.
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. Dollars)
U.S. GAAP
As of
-----------------------------
December 31, December 31,
2001 2002
------------ -------------
Assets
Cash and cash equivalents $ 1,041,616 $ 1,210,925
Accounts receivable 91,419 76,918
Inventories 12,766 21,275
Other current assets 16,439 22,927
------------ -------------
Total current assets 1,162,240 1,332,045
Property, plant and equipment, net 1,853,421 1,861,231
Investment in SMP 77,406 33,764
Other non-current assets 51,275 110,860
------------ -------------
Total assets $ 3,144,342 $ 3,337,900
============ =============
Liabilities and Shareholders' Equity
Accounts payable $ 82,743 $ 126,993
Current installments of long-term
debt 198,160 64,001
Accrued operating expenses 153,635 141,016
Other current liabilities 85,215 57,976
------------ -------------
Total current liabilities 519,753 389,986
Long-term debt, excluding current
installments 914,070 1,115,930
Other non-current liabilities 66,298 38,885
------------ -------------
Total liabilities 1,500,121 1,544,801
Minority interest 61,589 7,640
Shareholders' equity 1,582,632 1,785,459
------------ -------------
Total liabilities and
shareholders' equity $ 3,144,342 $ 3,337,900
============ =============
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. Dollars)
US GAAP
For The Twelve Months Ended
-----------------------------
December 31, December 31,
2001 2002
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (383,952) $ (417,088)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Equity in loss of SMP 2,722 44,651
Depreciation and amortization 444,061 452,417
Foreign exchange loss (gain) 2,637 (1,642)
Minority interest in loss of CSP (72,629) (55,563)
Loss (gain) on disposal of
property, plant and equipment 100 (784)
Other (6,579) 5,840
Changes in operating working capital:
Accounts receivable 105,116 11,295
Amount due to/from ST, ST
affiliates and SMP, net 31,614 (30,661)
Inventories 21,237 (8,509)
Prepaid expenses (381) (2,176)
Trade accounts payable (2,776) 6,190
Accrued operating expenses (51,335) (12,619)
Other current liabilities (5,066) (2,266)
------------ -------------
Net cash provided by (used in)
operating activities 84,769 (10,915)
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property,
plant, equipment and other assets 15,654 20,978
Purchase of property, plant and
equipment (489,645) (419,501)
Technology fees paid (6,000) (48,803)
------------ -------------
Net cash used in investing
activities (479,991) (447,326)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Customer deposits, net (8,919) (11,599)
Long-term debt
Borrowings 679,625 228,000
Repayments (155,540) (206,176)
Issuance of shares by the Company,
net 4,425 616,947
Capital lease payments (6,883) --
------------ -------------
Net cash provided by financing
activities 512,708 627,172
------------ -------------
Net increase in cash and cash
equivalents 117,486 168,931
Effect of exchange rate changes on
cash and cash equivalents 14 378
Cash at the beginning of the period 924,116 1,041,616
------------ -------------
Cash at the end of the period $1,041,616 $1,210,925
============ =============
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