Please also be reminded of the Safe Harbor statement which provides as follows. SMIC's statements of its current expectation are forward looking statements, subject to significant risk and uncertainties.
The actual results may differ materially from those contained in such forward-looking statements. Information as to those factors that could cause actual results to vary can be found in SMIC's Form 20-F filed with the United States Securities and Exchange Commission on June 29, 2010.
For today's agenda, our President and CEO, Dr. David N.K. Wang will speak on SMIC's key initiatives and comment on our business. Following that, CFO, Gary Tseng will walk us through our first quarter 2011 financial results and followed by second quarter 2011 guidance. Then we will open the call for questions-and-answers.
I will now turn the call over to our CEO, Dr. David Wang.Dr. David N. K. Wang Thank you, En-Ling. Good morning and good evening to everyone. Thank you for joining us. Today, I’m going to highlight our first quarter performance, our outlook for 2011, several of our recent events, our technology progress and our position in the strengthening Chinese market. Highlighting our first quarter performance, revenue increased 7% year-over-year and decreased 9% quarter-over-quarter to US$371 million. The quarter-over-quarter revenue decline was largely due to first quarter seasonality and our key customer transition through 65 and 45-nanometer. Despite these situations, China is placed resilient and in the first quarter, China sales grew 54% year-over-year and 3% quarter-over-quarter, and now account for 36% of our revenue. Looking into the second quarter, as mentioned previously, our customer transition to 65-nanometer and 45-nanometer were also impact our second quarter revenue, for the well rebound in the second half of the year. As we have a large percentage exposure for the communications market, Q2 is also in part – impacted by communication customers experiencing paradigm shifts in the T&T [ph] sector. Due to this paradigm shift the Japan earthquake disruption for semiconductor supply chain, sound continued adjustment to inventory levels, as well as our continued customer transition to 65-nano and 45 nanometers, we expect our Q2 revenue to decrease as guided.