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Semiconductor Manufacturing International's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Please also be reminded of the Safe Harbor Statement which provides as follows. SMIC's statements of its current expectations are forward-looking statements subject to significant risks 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 April 27, 2012.

I will now turn the call over to our CEO, T.Y. Chiu, for the opening remarks.

T.Y. Chiu

Thank you, En-Ling. Greetings to everyone. Thank you for joining us for our earning webcast.

I'm very pleased to report a solid second quarter results with revenue $421 million. This is a new sales record for SMIC, with a quarter-to-quarter increase of 26.8% and a growth of 19.7% over the same period last year. We have a positive operating profit and a net profit of $7.1 million.

SMIC has benefited from strong customer demand across the board, and in particular, an 87% quarter-to-quarter increase in our 65nm/55nm revenue. Also we are experiencing a strong demand increase for our specialty processes including power management IC, EEPROM, and others. As a result, the overall revenue growth exceeded our original guidance.

I would also like to point out that -- our significantly higher gross margin of 24% compared to 12% in the first quarter. This is primarily due to increased utilization as well as enhanced efficiency in all of our fabs. We are pleased with our progress in improving efficiency. As such, we are making progress in lowering our breakeven utilization. We are enjoying good overall fab utilization as a result of industry demand improvement and our own emphasis and effort. The second quarter overall utilization was 95% as compared to 74% in the first quarter.

Stock quotes in this article: SMI 

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