Chartered Reports Results for First Quarter 2007.* Chartered revenues of $323.8 million in 1Q 2007, down 8.8 percent from 1Q 2006 and down 4.5 percent sequentially. Revenues including Chartered's share of 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. of $345.3 million, down 10.6 percent from 1Q 2006 and down 5.0 percent sequentially. * Net income of $5.3 million, compared to net income of $22.0 million in 1Q 2006 and net income of $5.1 million in the previous quarter. MILPITAS, Calif. -- 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 CHRT Canadian Human Rights Tribunal CHRT Chert (lithological term) CHRT Consolidated Human Resource Technology )(SGX-ST:CHARTERED), one of the world's top dedicated semiconductor foundries, today announced its results for first quarter 2007. "As the industry continued to work through the excess inventory coupled with the usual seasonal slowness in the first quarter, Chartered revenues in first quarter 2007 were down 4.5 percent and revenues including our share of SMP were down 5.0 percent from the previous quarter. The revenue decline was primarily due to weakness in the consumer sector and to a lesser extent the computer sector, partially offset by strength in the communications sector. Revenues from 0.13-micron and below technologies, including those from 90 nanometer One billionth of a meter. Nanometers are used to measure the wavelengths of light. See angstrom and metric system. (nm), accounted for 57 percent of our total business revenues. Revenues from 90nm alone contributed 27 percent of our total business base revenues. Net income for the quarter was $5 million, in line with the previous guidance," said George Thomas George Thomas may refer to:
Summary of First Quarter 2007 Performance * Revenues were $323.8 million in first quarter 2007, down 8.8 percent from $355.2 million in first quarter 2006. Revenues including Chartered's share of SMP were $345.3 million, down 10.6 percent from $386.1 million in the year-ago quarter, primarily due to weakness in the consumer sector and to a much lesser extent the communications sector, partially offset by strength in the computer sector. Sequentially, revenues were down 4.5 percent compared to $339.1 million in fourth quarter 2006. Revenues including Chartered's share of SMP were down 5.0 percent from $363.7 million in fourth quarter 2006, primarily due to weakness in the consumer sector and to a lesser extent the computer sector, partially offset by strength in the communications sector. * Gross profit was $71.6 million, or 22.1 percent of revenues, down from a gross profit of $92.8 million, or 26.1 percent of revenues in the year-ago quarter, primarily due to lower revenues resulting from lower shipments and lower average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. (ASP) per wafer. Gross profit was up 5.7 percent sequentially from $67.7 million, or 20.0 percent of revenues in fourth quarter 2006, primarily due to lower cost per wafer resulting from higher production levels supporting higher inventory and due to a less rich production mix, partially offset by lower ASP. * Other revenue primarily relates to rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time from SMP (Fab 5) and was $5.6 million compared to $5.0 million in the year-ago quarter. * Research and development (R&D) expenses were $37.9 million, an increase of 8.5 percent from the year-ago quarter, primarily due to higher development activities related to the advanced 65nm and 45nm technology nodes See technology generation. . * Sales and marketing expenses were $14.2 million, up 5.0 percent compared to $13.6 million in the year-ago quarter, primarily due to higher financial support for pre-contract customer design validation activities. Compared to the previous quarter, sales and marketing expenses were down 7.2 percent from $15.4 million, primarily due to lower payroll-related expenses. * General and administrative (G&A) expenses were $9.9 million, an increase of 2.5 percent compared to $9.7 million in the year-ago quarter. Compared to the previous quarter, G&A expenses were down 17.9 percent from $12.1 million, primarily due to lower payroll-related expenses. * Equity in income of Chartered's minority-owned joint-venture fab, SMP (Fab 5), was $5.3 million compared to $10.2 million in the year-ago quarter and $8.4 million in the previous quarter, primarily due to lower revenues resulting from lower ASP and lower shipments. * Net interest expense was $8.1 million, compared to $14.7 million in the year-ago quarter, primarily due to higher interest capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. associated with the ramp of Fab 7. * The financial position of Chartered's consolidated 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), continued to be in a shareholders' deficit in first quarter 2007, and therefore none of the loss of $8.7 million in the first quarter was allocated to the minority interest. At the end of first quarter 2007, CSP's shareholders' deficit was $428.6 million. * Net income was $5.3 million, or 1.6 percent of revenues, compared to a net income of $22.0 million, or 6.2 percent of revenues in the year-ago quarter and a net income of $5.1 million or 1.5 percent of revenues in the previous quarter. * Basic earnings per American Depositary Share American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. (ADS) and basic earnings per share in first quarter 2007 were $0.01 and $0.00 respectively, compared with basic earnings per ADS and basic earnings per share of $0.08 and $0.01 respectively in first quarter 2006. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings per ADS and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in first quarter 2007 were $0.01 and $0.00 respectively, compared with diluted earnings per ADS and diluted earnings per share of $0.08 and $0.01 respectively in first quarter 2006. Wafer Shipments and Average Selling Prices (eight-inch equivalent) * Shipments in first quarter 2007 were 299.2 thousand wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. , a decrease of 6.0 percent compared to 318.2 thousand wafers in first quarter 2006. Shipments in first quarter 2007 increased by 1.3 percent compared to 295.5 thousand wafers shipped in fourth quarter 2006. Shipments including Chartered's share of SMP were 325.6 thousand wafers, a decrease of 6.8 percent compared to 349.4 thousand wafers in first quarter 2006. Shipments including Chartered's share of SMP in first quarter 2007 increased 0.8 percent compared to 322.9 thousand wafers shipped in fourth quarter 2006. * ASP was $1,071 per wafer in first quarter 2007, compared to $1,135 per wafer in fourth quarter 2006, primarily due to lower shipment of 90nm wafers in the first quarter. ASP including Chartered's share of SMP was $1,051 per wafer in first quarter 2007 compared to $1,115 per wafer in fourth quarter 2006. Capacity and Utilization 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 first quarter 2007 was 70 percent compared to 82 percent in the year-ago quarter, and 70 percent in fourth quarter 2006. Capacity in first quarter 2007 was up approximately eight percent compared to first quarter 2006 and was essentially flat compared to fourth quarter 2006. Capacity utilization is based on total shipments and total capacity, both of which include Chartered's share of SMP. [TABLE OMITTED] [TABLE OMITTED] Market Dynamics The following business statistics tables provide information on revenues including Chartered's share of SMP by market sector, region and technology. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] Recent Highlights * Chartered announced the extension of its joint development efforts 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) to include 32nm bulk CMOS (Complementary Metal Oxide Semiconductor) Pronounced "c-moss." The most widely used integrated circuit design. It is found in almost every electronic product from handheld devices to mainframes. technology. The joint collaboration has enabled Chartered to accelerate its 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. for leading-edge manufacturing solutions, spanning four major generations of advanced process technology, including 90nm, 65nm, 45nm and 32nm logic processes. * Chartered announced the re-denomination, from Singapore dollars to US dollars, of the terms of the call option it had entered into in March 2006. The modification results in the 2006 Option being denominated in the Company's functional currency. Review and Outlook "As we move into the second quarter, we are seeing resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of growth across several of our customers and applications. Based on current demand levels from our customers, we are expecting wafer shipments to grow approximately 15 percent sequentially and translate to a utilization rate of approximately 77 % for the second quarter, an improvement of seven percentage points over the previous quarter. However, primarily as a result of lower shipment of 90nm wafers to the computer sector, we expect Chartered revenues and revenues including our share of SMP to be essentially flat sequentially," 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. The outlook for second quarter 2007 is as follows: [TABLE OMITTED] CEO Closing Comments "It is encouraging that wafer shipments are expected to see a double-digit sequential growth in the second quarter, indicating that the industry is on track for recovery. However, we do have the challenge of lower 90nm shipments to the computer sector, which dominated our leading-edge shipments in the past two quarters, impacting our revenue growth in the second quarter. Barring any severe macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. issues which are difficult to predict, we continue to expect growth for the foundry industry in the second half of the year, driven primarily by seasonal strength as well as the continuing depletion of excess inventory across the semiconductor supply chain. We are executing slightly ahead of our schedule at 65nm and now expect to start commercial shipments in the second quarter. In the same quarter, we expect our revenue contribution from 65nm, including revenues from both SOI (Silicon On Insulator) A chip architecture that increases transistor switching speed by reducing capacitance (build-up of electrical charges in the transistor's elements), and thus reducing the discharge time. The power requirement is also reduced in some designs. and bulk technologies, to be approximately five percent of our total business base revenues," said Chia. Webcast Conference Call Today Chartered will be discussing its first quarter 2007 and second quarter 2007 outlook on a conference call today, April 27, 2007, at 8:30 a.m. Singapore time (US time 5:30 p.m. PT/8:30 p.m. ET, Thursday, April 26, 2007). 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 Investor relations The process by which the corporation communicates with its investors. , or at http://ir.charteredsemi.com. Mid-Quarter Guidance The Company provides a guidance update midway through each quarter. For second quarter 2007, the Company anticipates issuing its mid-quarter guidance update, via news release, on Friday, June 8, 2007, Singapore time. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] 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 32nm. 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 fabrication (fab´rikā´sh  n),n the construction or making of a restoration. facility and four 200mm facilities. 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 outlook for the second quarter of 2007; projected revenues and average selling prices (including Chartered's share of SMP), utilization rate, gross profit, net income and earnings per ADS; the resumption of growth across several of our customers and applications; our expectation of growth of wafer shipments sequentially and translating to an improved utilization rate for the second quarter; the challenge of lower 90nm shipments impacting our revenue growth in the second quarter; our expectation of growth for the foundry industry in the second half of the year as well as the continuing depletion of excess inventory across the semiconductor supply chain; the 65nm execution to be slightly ahead of schedule and the start of commercial shipments in the second quarter and the revenue contribution from 65nm, including revenues from both SOI and bulk technologies as a percentage of our total business base revenues 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 Fabless Company 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. , the 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. strategy of integrated device manufacturers See IDM. ("IDM (1) See identity management. (2) (Integrated Device Manufacturer) A company that performs every step of the chip-making process, including design, manufacture, test and packaging. Examples of IDMs are Intel, AMD, Motorola, IBM, TI and Lucent. ") 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 2006 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. 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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