Chartered Reports Results for Second Quarter 2006.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. -- 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): --Chartered revenues of $364.8 million in 2Q 2006, up 88.0 percent from 2Q 2005 and up 2.7 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . 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 $393.7 million, up 79.0 percent from 2Q 2005 and up 2.0 percent sequentially. --Net income of $12.3 million, compared to net loss of $67.1 million in 2Q 2005 and net income of $25.3 million in the previous quarter. Chartered Semiconductor Manufacturing (Nasdaq:CHRT) (SGX-ST:CHARTERED), one of the world's top dedicated semiconductor foundries, today announced its results for second quarter 2006. "Chartered revenues in second quarter 2006 were up 88 percent and revenues including our share of SMP were up 79 percent compared to the year-ago quarter, in line with the guidance we provided on June June: see month. 6, 2006. Revenues from 0.13-micron and more advanced technologies accounted for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 50 percent of our total business base revenues, reflecting the technology position we have today," said George Thomas George Thomas may refer to:
Summary of Second Quarter 2006 Performance --Revenues were $364.8 million in second quarter 2006, up 88.0 percent from $194.0 million in second quarter 2005. Revenues including Chartered's share of SMP were $393.7 million, up 79.0 percent from $219.9 million in second quarter 2005, primarily due to significant growth in the consumer sector followed by the communications and computer sectors. Sequentially, revenues were up 2.7 percent from $355.2 million in first quarter 2006. Revenues including Chartered's share of SMP were up 2.0 percent from $386.1 million in first quarter 2006 primarily due to strength in the computer sector and to a lesser extent the communications sector, partially offset by weakness in the consumer sector. --Gross profit was $87.9 million, or 24.1 percent of revenues, up from a gross profit of $0.4 million, or 0.2 percent of revenues in the year-ago quarter, primarily due to significantly higher revenues. Gross profit was down $4.5 million sequentially from $92.4 million, or 26.0 percent of revenues in first quarter 2006, despite higher revenues, due to higher cost per 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. resulting from a less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mix associated with production levels during the quarter. --Research and development (R&D) expenses were $38.2 million, compared to $27.7 million in the year-ago quarter, primarily due to higher activities related to the advanced 65nm technology node See technology generation. and development of design kits and intellectual property solutions. Sequentially, R&D expenses were higher compared to $34.1 million in first quarter 2006, primarily due to higher activities related to the advanced 65nm technology node. --Pre-production fab start-up Start-up The earliest stage of a new business venture. cost was nil in second quarter 2006 as Fab 7 started commercial production during second quarter 2005. Pre-production fab start-up cost was $7.9 million in second quarter 2005. --Sales and marketing expenses were $12.2 million, up 20.2 percent compared to $10.1 million in the year-ago quarter, primarily due to higher payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. related expenses and higher financial support for pre-contract 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. activities. Compared to the previous quarter, sales and marketing expenses were down 11.7 percent from $13.8 million, primarily due to lower expenses related to Electronic Design Automation (EDA (1) (Electronic Design Automation) Using the computer to design, lay out, verify and simulate the performance of electronic circuits on a chip or printed circuit board. ) offerings. --General and administrative (G&A) expenses were $9.9 million, compared to $10.7 million in second quarter 2005. --Equity in income of Chartered's minority-owned joint-venture fab, SMP (Fab 5), was an income of $7.9 million compared to an income of $0.8 million in the year-ago quarter, primarily due to lower depreciation and higher revenues. Compared to the previous quarter, equity in income of SMP was down 21.9 percent from $10.2 million, primarily due to lower revenues. --Other income (loss), net, was a charge of $7.8 million compared to a credit of $3.6 million in the year-ago quarter and compared to a charge of $2.5 million in the previous quarter, primarily due to losses resulting from foreign currency fluctuations and changes in fair value of an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. . --Net interest expense was $10.1 million, compared to $8.6 million in the year-ago quarter, primarily due to higher interest expense resulting from higher interest rates and lower 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, partially offset by higher interest income. Compared to the previous quarter, net interest expense was down 27.5 percent from $14.0 million primarily due to higher interest income resulting from higher principal balances and interest rates. --The financial position of Chartered's 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: 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 capital deficit in second quarter 2006, and therefore none of the loss of $7.8 million in the second quarter was allocated to the minority interest. At the end of second quarter 2006, CSP's capital deficit was $408.5 million. --Net income was $12.3 million, or 3.4 percent of revenues, compared to a net loss of $67.1 million, or negative 34.6 percent of revenues, in the year-ago quarter, and a net income of $25.3 million, or 7.1 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 second quarter 2006 were $0.04 and $0.00 respectively, compared with basic loss per ADS and basic loss per share of $0.27 and $0.03 respectively in second quarter 2005. Basic earnings (loss) per share is computed by deducting from net income or adding to net (loss) the accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the to redemption value Redemption Value refers to the value that is placed on a party's head after they wrong you in some way. It is seen as the payment you are willing to make to get justice. of the convertible redeemable Redeemable Eligible for redemption under the terms of an indenture. preference shares and using the weighted-average number of common shares outstanding. Wafer Shipments and Average Selling Prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. (eight-inch equivalent) --Shipments in second quarter 2006 were 327.0 thousand wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. , an increase of 60.4 percent compared to 203.8 thousand wafers in second quarter 2005, and an increase of 2.7 percent compared to 318.2 thousand wafers shipped in first quarter 2006. Shipments including Chartered's share of SMP in second quarter 2006 were 355.7 thousand wafers, an increase of 58.5 percent compared to 224.5 thousand wafers in second quarter 2005 and an increase of 1.8 percent compared to 349.4 thousand wafers in first quarter 2006. --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). ) was $1,089 per wafer in first quarter and second quarter 2006. ASP including Chartered's share of SMP was $1,082 per wafer in second quarter 2006, compared to $1,080 per wafer in first quarter 2006. Capacity and 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 --Capacity utilization in second quarter 2006 was 82 percent compared to 65 percent in the year-ago quarter, and 82 percent in first quarter 2006. Capacity in second quarter 2006 was up approximately 26 percent compared to second quarter 2005 and up approximately two percent compared to first quarter 2006. 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. 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
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
Thousand 8" equivalent wafers 2005 2005 2005 2006 2006
----------------------------------------------------------------------
Total wafers shipped 224.5 295.2 345.8 349.4 355.7
----------------------------------------------------------------------
Total capacity 346.5 401.4 435.9 427.5 436.4
----------------------------------------------------------------------
Utilization 65% 74% 79% 82% 82%
----------------------------------------------------------------------
Capacity by Fab
----------------------------------------------------------------------
(Thousand 8" 2Q 3Q 4Q 1Q 2Q Est. 3Q
equivalent wafers) 2005 2005 2005 2006 2006 2006
----------------------------------------------------------------------
Fab 2 137.7 139.2 145.7 142.6 144.1 145.7
----------------------------------------------------------------------
Fab 3 74.3 74.2 74.2 69.5 70.3 71.0
----------------------------------------------------------------------
Fab 5
(Chartered's share) 35.8 36.2 35.6 34.3 34.6 35.0
----------------------------------------------------------------------
Fab 6 89.4 100.5 112.9 114.5 115.8 117.0
----------------------------------------------------------------------
Fab 7 (a) 9.3 51.3 67.5 66.6 71.6 89.5
----------------------------------------------------------------------
Total 346.5 401.4 435.9 427.5 436.4 458.2
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(a) Fab 7 started commercial shipment in June 2005.
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)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 44% 38% 29% 34% 34%
----------------------------------------------------------------------
Computer 34% 25% 22% 19% 25%
----------------------------------------------------------------------
Consumer 16% 32% 45% 45% 39%
----------------------------------------------------------------------
Other (b) 6% 5% 4% 2% 2%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Breakdown by Region
Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 58% 72% 74% 70% 75%
----------------------------------------------------------------------
Europe 17% 10% 9% 12% 9%
----------------------------------------------------------------------
Asia-Pacific 16% 11% 11% 15% 14%
----------------------------------------------------------------------
Japan 5% 4% 4% 3% 2%
----------------------------------------------------------------------
Other (b) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Breakdown by Technology (micron)
Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below 0% 24% 28% 25% 22%
----------------------------------------------------------------------
Up to 0.13 23% 17% 20% 25% 28%
----------------------------------------------------------------------
Up to 0.15 6% 4% 4% 2% 1%
----------------------------------------------------------------------
Up to 0.18 18% 9% 12% 11% 14%
----------------------------------------------------------------------
Up to 0.25 11% 10% 6% 9% 9%
----------------------------------------------------------------------
Up to 0.35 26% 21% 20% 18% 15%
----------------------------------------------------------------------
Above 0.35 12% 12% 8% 10% 11%
----------------------------------------------------------------------
Other (b) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
(b) 2Q 2005 - 4Q 2005: Includes revenues from services related to
generation of customers' mask sets.
Recent Highlights and Events --Chartered signed an agreement with Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. for the manufacturing of CPU CPU in full central processing unit Principal component of a digital computer, composed of a control unit, an instruction-decoding unit, and an arithmetic-logic unit. products - using 65nm Silicon-on-Insulator (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. ) semiconductor technology - for Microsoft's Xbox A video game console from Microsoft that was designed to compete with Sony's PlayStation and Nintendo's GameCube. Introduced in 2001 with a 733 MHz Pentium III CPU, 5x DVD drive and custom-designed graphics processor, the Xbox also includes four game controller ports, Ethernet networking 360 game consoles See video game console. . Production is expected to begin in the first quarter of 2007. This follows Chartered's successful manufacturing of 90nm SOI CPU products for Xbox 360 game consoles, through an 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) . --Chartered announced the licensing of 90nm SOI technology from IBM. The agreement enables Chartered to expand the use of the technology to areas such as consumer, multi-media, communications, automotive and industrial applications, thereby delivering more choice and flexibility to foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. customers for manufacturing their leading-edge products. --Chartered began first revenue shipments of AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. 64 processors in June 2006. AMD and Chartered ramped 300mm production at Fab 7 in record time, hitting all major milestones and starting production at mature yields. Initial shipments out of Chartered consisted of microprocessors This is a list of microprocessors. Intel
Review and Outlook "As we go into the third quarter, we are seeing changes in outlook from our customers," said 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 . "We believe customers are cautious about their inventory positions, and some are reacting to softer-than-usual seasonality in some of the end markets. As a result of this, our outlook for the third quarter 2006 is now weaker than what we had anticipated earlier. However, this weakness is offset to a significant extent by the new businesses such as the AMD microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. ramp in the third quarter. "Based on our current outlook, we expect Chartered revenues for third quarter 2006 to be essentially flat and revenues including our share of SMP to be slightly down, compared to the second quarter. In comparison to the second quarter, we see significant weakness in the consumer sector, primarily due to decline in revenues from video game devices. The communications sector is expected to be weaker to a lesser extent, offset by strength in the computer sector. We expect a utilization rate of approximately 75 percent for the third quarter, after comprehending a sequential One after the other in some consecutive order such as by name or number. increase in capacity of approximately five percent. Revenues from 0.13-micron and below technologies, including 90nm, are expected to represent around 51 percent of our total business base revenues. 90nm revenues alone are expected to grow approximately 25 percent sequentially and contribute approximately 28 percent of our total business base revenues." The outlook for third quarter 2006 is as follows:
2Q 2006 3Q 2006 Guidance
-------- -----------------------------
Actual Midpoint and Sequential
range change
----------------------------- -------- ----------------- -----------
Down 2% to
Revenues $364.8M $362M, +/- $6M up 1%
----------------------------- -------- ----------------- ----------
Revenues including Flat to
Chartered's share of SMP $393.7M $387M, +/- $7M down 3%
----------------------------- -------- ----------------- ----------
Up 1% to
ASP (c) $1,089 $1,117, +/- $20 up 5%
----------------------------- -------- ----------------- ----------
ASP including Chartered's Flat to
share of SMP (c) $1,082 $1,102, +/- $25 up 4%
----------------------------- -------- ----------------- ----------
Utilization 82% 75%, +/- 3% -
----------------------------- -------- ----------------- ----------
Gross profit (loss) $87.9M $90M, +/- $6M -
----------------------------- -------- ----------------- ----------
Net income (loss) (d) $12.3M $11M, +/- $5M -
----------------------------- -------- ----------------- ----------
Basic earnings (loss) per ADS $0.04 $0.03, +/- $0.02 -
----------------------------- -------- ----------------- ----------
(c) Eight-inch equivalent wafers.
(d) Net income includes the negative profit impact from losses
attributable to minority interest, which was $3.8 million in
second quarter 2006, and is projected to be approximately $4.0
million in third quarter 2006.
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. Closing Comments "The recent change in the semiconductor market outlook is largely unanticipated. While we are on track to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. new engagements such as AMD and customers using our value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: solutions, we do see the general market weakness slowing our overall growth plan for this year," said Chia Song Hwee, president & CEO of Chartered. "There are near-term near-term adj. Of, for, or involving a short period of time in the near future. challenges that we need to address due to the current market environment. However, we remain committed to our growth strategy and the direction of our company remains unchanged. As we execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on our 90nm engagements, we are also currently engaging multiple customers at the 65nm node node, in astronomy, point at which the orbit of a body crosses a reference plane. One reference plane that is often used is the plane of the earth's orbit around the sun (ecliptic). and are pursuing opportunities from new markets and customers," concluded Chia. Webcast Conference Call Today Chartered will be discussing its second quarter 2006 results and third quarter 2006 outlook on a conference call today, July July: see month. 21, 2006, at 8:30 a.m. 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). time (US time 5:30 p.m. PT/8:30 p.m. ET, Thursday Thursday: see week. , July 20, 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 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 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 third quarter 2006, the Company anticipates issuing its mid-quarter guidance update, via news release, on Wednesday Wednesday: see week. , September September: see month. 6, 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.
----------------------------------------------------------------------
3Q 2006
2Q 2005 1Q 2006 2Q 2006 Guidance
Actual Actual Actual Midpoint
----------------------------------------------------------------------
Revenues (e) $194.0M $355.2M $364.8M $362M
----------------------------------------------------------------------
Chartered's share of SMP
revenues $25.9M $30.9M $28.9M $25M
----------------------------------------------------------------------
Revenues including Chartered's
share of SMP $219.9M $386.1M $393.7M $387M
----------------------------------------------------------------------
----------------------------------------------------------------------
ASP (e) (f) $913 $1,089 $1,089 $1,117
----------------------------------------------------------------------
ASP of Chartered's share of
SMP revenues (f) $1,253 $992 $1,004 $925
----------------------------------------------------------------------
ASP including Chartered's
share of SMP (f) $944 $1,080 $1,082 $1,102
----------------------------------------------------------------------
(e) Determined in accordance with US GAAP.
(f) Eight-inch equivalent wafers.
Breakdown by Market Sector
Revenues (US GAAP) (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 43% 36% 28% 31% 32%
----------------------------------------------------------------------
Computer 32% 24% 19% 18% 24%
----------------------------------------------------------------------
Consumer 18% 35% 48% 49% 41%
----------------------------------------------------------------------
Other (g) 7% 5% 5% 2% 3%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Chartered's share of SMP revenues (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 44% 54% 42% 75% 63%
----------------------------------------------------------------------
Computer 51% 37% 51% 22% 32%
----------------------------------------------------------------------
Consumer 3% 7% 6% 3% 5%
----------------------------------------------------------------------
Other 2% 2% 1% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 44% 38% 29% 34% 34%
----------------------------------------------------------------------
Computer 34% 25% 22% 19% 25%
----------------------------------------------------------------------
Consumer 16% 32% 45% 45% 39%
----------------------------------------------------------------------
Other (g) 6% 5% 4% 2% 2%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Breakdown by Region
Revenues (US GAAP) (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 63% 74% 76% 72% 78%
----------------------------------------------------------------------
Europe 11% 9% 8% 12% 8%
----------------------------------------------------------------------
Asia-Pacific 17% 11% 11% 13% 13%
----------------------------------------------------------------------
Japan 5% 3% 3% 3% 1%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Chartered's share of SMP Revenues (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 17% 43% 49% 45% 37%
----------------------------------------------------------------------
Europe 66% 28% 28% 18% 21%
----------------------------------------------------------------------
Asia-Pacific 4% 9% 17% 30% 29%
----------------------------------------------------------------------
Japan 13% 20% 6% 7% 13%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 58% 72% 74% 70% 75%
----------------------------------------------------------------------
Europe 17% 10% 9% 12% 9%
----------------------------------------------------------------------
Asia-Pacific 16% 11% 11% 15% 14%
----------------------------------------------------------------------
Japan 5% 4% 4% 3% 2%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Breakdown by Technology (micron)
Revenues (US GAAP) (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below - 26% 31% 27% 24%
----------------------------------------------------------------------
Up to 0.13 26% 18% 21% 27% 30%
----------------------------------------------------------------------
Up to 0.15 - - - - -
----------------------------------------------------------------------
Up to 0.18 14% 6% 9% 7% 9%
----------------------------------------------------------------------
Up to 0.25 12% 11% 7% 9% 9%
----------------------------------------------------------------------
Up to 0.35 29% 23% 21% 19% 16%
----------------------------------------------------------------------
Above 0.35 15% 13% 9% 11% 12%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Chartered's share of SMP Revenues (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below - - - - -
----------------------------------------------------------------------
Up to 0.13 3% - - - -
----------------------------------------------------------------------
Up to 0.15 50% 47% 45% 26% 19%
----------------------------------------------------------------------
Up to 0.18 47% 43% 40% 56% 75%
----------------------------------------------------------------------
Up to 0.25 - 5% 3% 5% 4%
----------------------------------------------------------------------
Up to 0.35 - 5% 12% 13% 2%
----------------------------------------------------------------------
Above 0.35 - - - - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below - 24% 28% 25% 22%
----------------------------------------------------------------------
Up to 0.13 23% 17% 20% 25% 28%
----------------------------------------------------------------------
Up to 0.15 6% 4% 4% 2% 1%
----------------------------------------------------------------------
Up to 0.18 18% 9% 12% 11% 14%
----------------------------------------------------------------------
Up to 0.25 11% 10% 6% 9% 9%
----------------------------------------------------------------------
Up to 0.35 26% 21% 20% 18% 15%
----------------------------------------------------------------------
Above 0.35 12% 12% 8% 10% 11%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
(g) 2Q 2005 - 4Q 2005: Includes revenues from services related to
generation of customers' mask sets.
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 One billionth of a meter. Nanometers are used to measure the wavelengths of light. See angstrom and metric system. (nm), enabling today's system-on-chip See SoC. designs. The company further serves the needs of customers through its 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. , joint development approach on a 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. 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 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 third 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 (i) 0.13-micron and below technologies and (ii) 90nm as a percentage of our total business base revenues; the percentage growth of 90nm revenues; the inventory positions of our customers; the weakness in our outlook for the third quarter 2006 and the possible offset by new businesses such as the AMD microprocessor ramp; the weakness in the consumer sector and communications sector and possible offset by the strength in the computer sector; our commitment to our growth strategy and the direction of our company; our customer engagement at 65nm node and the estimated capacity by fabs for the third quarter 2006 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 The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as and process technology mix, unavailability un·a·vail·a·ble adj. Not available, accessible, or at hand. un  a·vail 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 CompanyThe 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 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 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.
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
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 Six Months Ended
June 30, June 30,
2005 2006 2005 2006
--------- --------- ---------- ---------
Net revenue $194,035 $364,829 $ 375,388 $720,060
Cost of revenue 193,591 276,965 384,658 539,807
--------- --------- ---------- ---------
Gross profit (loss) 444 87,864 (9,270) 180,253
--------- --------- ---------- ---------
Operating expenses:
Research and development 27,676 38,173 54,991 72,317
Fab start-up costs 7,876 - 22,697 -
Sales and marketing 10,112 12,158 20,619 25,928
General and
administrative 10,663 9,856 19,974 20,153
Other operating
expense (income) 3,874 184 3,850 (3,767)
--------- --------- ---------- ---------
Total operating
expenses 60,201 60,371 122,131 114,631
--------- --------- ---------- ---------
Operating income (loss) (59,757) 27,493 (131,401) 65,622
Equity in income (loss)
of SMP 776 7,947 (8,256) 18,117
Other income (loss), net 3,628 (7,821) 5,651 (10,350)
Interest expense, net (8,601) (10,125) (11,027) (24,097)
--------- --------- ---------- ---------
Income (loss) before
income taxes (63,954) 17,494 (145,033) 49,292
Income tax expense 3,147 5,170 6,586 11,698
--------- --------- ---------- ---------
Net income (loss) (67,101) 12,324 (151,619) 37,594
Less: Accretion to
redemption value of
convertible redeemable
preference shares - 2,358 - 4,782
--------- --------- ---------- ---------
Net income (loss)
available to common
shareholders $(67,101) $ 9,966 $(151,619) $ 32,812
========= ========= ========== =========
Net earnings (loss) per
common share and ADS
Basic net earnings
(loss) per common share $ (0.03) $ 0.00 $ (0.06) $ 0.01
Diluted net earnings
(loss) per common share $ (0.03) $ 0.00 $ (0.06) $ 0.01
Basic net earnings
(loss) per ADS $ (0.27) $ 0.04 $ (0.60) $ 0.13
Diluted net earnings
(loss) per ADS $ (0.27) $ 0.03 $ (0.60) $ 0.11
Number of common shares
(in millions) used in
computing:
Basic net earnings
(loss) per common
share 2,511.0 2,527.2 2,510.4 2,520.5
Effect of dilutive
options - 332.6 - 339.4
--------- --------- ---------- ---------
Diluted net earnings
(loss) per common
share 2,511.0 2,859.8 2,510.4 2,859.9
========= ========= ========== =========
Number of ADS (in
millions) used in
computing:
Basic net earnings
(loss) per ADS 251.1 252.7 251.0 252.1
Effect of dilutive
options - 33.3 - 33.9
--------- --------- ---------- ---------
Diluted net earnings
(loss) per ADS 251.1 286.0 251.0 286.0
========= ========= ========== =========
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)
Determined in accordance with US GAAP
As of
-----------------------------
December 31, June 30,
2005 2006
-------------- ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 819,856 $ 937,942
Marketable investments 22,467 23,078
Receivables, net 184,897 219,261
Inventories 134,240 167,576
Other current assets 122,116 17,018
-------------- ------------
Total current assets 1,283,576 1,364,875
Investment in SMP 50,384 47,825
Technology licenses, net 106,612 97,101
Property, plant and equipment, net 2,049,695 2,092,971
Other non-current assets 27,027 44,622
-------------- ------------
Total assets $ 3,517,294 $3,647,394
============== ============
LIABILITIES, CONVERTIBLE REDEEMABLE
PREFERENCE SHARES AND SHAREHOLDERS' EQUITY
Payables $ 166,681 $ 230,987
Current installments of long-term debt
and capital lease obligations 322,453 161,746
Other current liabilities 244,119 211,332
-------------- ------------
Total current liabilities 733,253 604,065
Long-term debt and capital lease
obligations, excluding current
installments 1,169,034 1,363,681
Other non-current liabilities 17,970 28,163
-------------- ------------
Total liabilities 1,920,257 1,995,909
Convertible redeemable preference shares 250,663 241,481
Shareholders' equity 1,346,374 1,410,004
-------------- ------------
Total liabilities, convertible
redeemable preference shares
and shareholders' equity $ 3,517,294 $3,647,394
============== ============
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US Dollars)
Determined in accordance with US GAAP
For The Six Months Ended
-----------------------------
June 30, June 30,
2005 2006
-------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(151,619) $ 37,594
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Equity in income (loss) of SMP 8,256 (18,117)
Cash dividends received from SMP 6,300 20,683
Depreciation and amortization 239,356 264,458
Foreign exchange (gain) loss, net 354 2,503
Gain on disposal of property, plant
and equipment (91) (4,025)
Others, net 5,309 12,481
Changes in assets and liabilities:
Receivables 14,321 (38,227)
Inventories (44,393) (33,336)
Other current assets (2,528) (2,820)
Payables and other liabilities 103,891 20,861
-------------- ------------
Net cash provided by operating activities 179,156 262,055
-------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (347,950) (231,507)
Payments for technology licenses (3,088) (5,000)
Purchases of other investments - (600)
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 127 8,659
Proceeds from redemption and maturity of
marketable investments 30,000 -
Return of capital from SMP - 4,133
Others (950) (3,537)
-------------- ------------
Net cash used in investing activities (321,861) (131,196)
-------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt
Borrowings 472,124 493,100
Repayments (343,134) (513,548)
Capital lease payments - (2,185)
Receipts of customer deposits 80,000 45,183
Refund of customer deposits (1,634) (42,707)
Issuance of ordinary shares 1,162 1,612
Others - 5,752
-------------- ------------
Net cash provided by (used in) financing
activities 208,518 (12,793)
-------------- ------------
Net increase in cash and cash
equivalents 65,813 118,066
Effect of exchange rate changes on cash
and cash equivalents (352) 20
Cash and cash equivalents at the
beginning of the period 539,399 819,856
-------------- ------------
Cash and cash equivalents at the
end of the period $ 604,860 $ 937,942
============== ============
All currency figures stated in this report are in US dollars. The financial statement amounts in this report are determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. 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 Clarity is the property of being clear or transparent. Clarity can refer to one's ability to clearly visualize an object or concept, as in thought, understanding, and the "mind's eye", as well as the traditional notion of visual perception, that is, with the , in Appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. 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. |
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