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CHARTERED SEMICONDUCTOR REPORTS RECORD
REVENUES IN 1999 YEAR-END RESULTS
Fourth Quarter Results Mark Return to Profitability
Addition of Capacity will be Accelerated
to Accommodate Surge in Wafer Demand
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*All
currency figures stated in this news release are in
US dollars
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SINGAPORE -- January 21, 2000 -- Chartered Semiconductor
Manufacturing (Nasdaq:CHRT and SGX:CHARTERED) has announced
record net revenues for its fiscal year ended December
31, 1999, and significant net revenue growth for its fourth
quarter. The Company reported annual net revenues of $694.3
million for 1999, an increase of 64% over annual net revenues
of $422.6 million reported for 1998. Fourth-quarter net
revenues were $216.2 million, up 104% from $106.0 million
in net revenues from the same quarter a year ago. Net
revenues, including our share of the minority-owned joint-venture
company, were $707.6 million for 1999 and $228.9 million
for the fourth-quarter 1999, resulting in growth rates
of 67% year-over-year and 116% quarter-over-quarter.
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The 1999 earnings per American Depositary Share (ADS)
and earnings per share (EPS) on a fully diluted basis
were a loss of $0.32 and a loss of $0.03 respectively,
compared with a loss of $2.42 and a loss of $0.24 respectively
in 1998. The fourth-quarter 1999 earnings per ADS and
EPS on a fully diluted basis were $0.18 and $0.02 respectively,
compared with a loss of $0.78 and a loss of $0.08 respectively
in the same quarter a year ago.
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Fourth-quarter 1999 net income of $22.1 million (which
included a non-cash stock-based compensation charge of
$8.0 million and several fourth-quarter items totaling
a credit of $10.2 million) reflected an improvement of
$99.2 million from negative $77.2 million in the fourth-quarter
1998. For the fourth-quarter 1999, higher volume of shipments,
improved utilization of capacity and higher average selling
prices drove the gross profit to $71.4 million, or 33%
of net revenue, from a negative $6.4 million, or negative
6% of net revenue in the same quarter a year ago. The
fourth-quarter 1998 net loss included a $31.8 million
charge associated with the termination of a development
program and a non-cash stock-based compensation credit
of $0.7 million.
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Net loss for 1999 was $32.6 million, an improvement of
$166.2 million over 1998. As a result of higher volume
of shipments and improved capacity utilization, gross
profit for 1999 improved to $167.2 million, or 24% of
net revenue, from negative $17.0 million, or negative
4% of net revenue, in 1998. The 1999 net loss included
a $20.1 million non-cash stock-based compensation charge
and a $6.5 million charge associated with the termination
of a development program. The 1998 net loss included a
$31.8 million charge associated with the termination of
a development program and a $2.8 million non-cash stock-based
compensation credit.
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In 1999, the Company increased its research and development
(R&D) investment by 36% to $58.9 million due principally
to expenses for the development of 0.25um and 0.18um process
technologies, as well as other advanced processes.
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Regional Market Dynamics
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The addition of new customers in Europe marked the region
as the Company's fastest growing geographical sales area.
Together with increased wafer demand in the United States
-- the Company's largest region -- Chartered's quarter-over-quarter
and year-over-year performance saw significant growth.
Including our share of the minority-owned joint-venture
company, 1999 revenues in Europe totaled $95.2 million,
versus 1998 revenues of $6.9 million; North America revenues
totaled $484.5 million in 1999, while 1998 revenues for
the region totaled $265.4 million. In Japan, 1999 revenues
rose to $20.3 million from $5.0 million in 1998. The Asia-Pacific
region saw a reduction in revenues to $107.6 million in
1999 from $145.3 million in 1998. The lower revenue in
Asia-Pacific reflects the Company's strategic shift away
from commodity chips to a sharper focus on systems-level
technologies and communications market requirements.
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"We believe our strategy to support industry innovators
requiring systems-level solutions and our focus on specific
market segments are responsible for our overall revenue
growth," said Barry Waite, president and CEO of Chartered.
"This strategy manifested itself most notably in Europe
with its high concentration of companies with communications
and systems expertise."
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Average Selling Prices and Wafer Demand
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Average selling prices (ASPs) also showed marked improvement
in the fourth-quarter 1999 as the Company was able to
increase shipments of wafers with a higher mix of advanced
technology. Average selling prices increased 37% from
$825 per wafer in the fourth-quarter 1998 to $1131 per
wafer in the fourth-quarter 1999. Average selling prices
increased by 4% from $961 per wafer in 1998 to $999 per
wafer in 1999. Adjusted to exclude the terminated print-head
business, ASPs increased 26% from the fourth quarter of
1998 to the fourth quarter of 1999 and 2% from 1998 to
1999.
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The combined factors of new customers and increased wafer
demand spurred wafer shipments from 439,700 in 1998 to
695,300 wafers in 1999, an increase of 255,600 or 58%.
Wafer shipments in the fourth quarter totaled 191,200
-- an increase of 62,700 wafers, or 49%, over shipments
of 128,500 in the same period a year ago.
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Capacity Ramp Acceleration
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Based on the current semiconductor market outlook and
customer demand for Chartered's services, the Company
intends to double manufacturing capacity from approximately
700,000 wafers per year to 1.4 million wafers by the end
of 2001. The accelerated capacity plan involves a two-phased
approach that is intended to provide ongoing additional
capacity expansion. First, the Company plans to increase
capacity within its existing production facilities. The
existing clean-room in Fab 2 will be expanded and the
subfloor areas in Fab 1 and Fab 3 will be converted into
manufacturing floors. The expected increased efficiencies
realized by maximizing current space utilization will
result in the capability to produce approximately 20,000
additional eight-inch wafers per month -- about the same
output of some fabrication facilities. Capacity in year
2000 is expected to be approximately 970,000 eight-inch
equivalent wafers.
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During the 2000 fiscal year, Chartered plans to break
ground for the construction of a new eight-inch wafer
fabrication facility. The
new facility is expected to have a production capacity
of approximately 60,000 eight-inch wafers per month and
is expected to be capable of fabricating wafers with 0.15um
and smaller process geometries. The cost of construction
and equipment
in the new facility is currently estimated at approximately
$2.1 billion. First wafer output at the new facility is
expected to occur in mid-2001.
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To support its plan for accelerated capacity growth, the
Company has raised its year 2000 estimate of total capital
expenditures for itself and its joint-venture fabrication
facilities to approximately $1.4 billion. This represents
an increase of 102% over its 1999 capital expenditures.
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Summarizing highlights of the year, Barry Waite said,
"Chartered has established itself as a top-tier foundry
through its focus on systems-level technologies supporting
industry innovators. Going forward, our customers and
partners have high expectations of Chartered's support
capabilities. Our results show that we are making solid
steps in the right direction. We will continue to invest
in technology, capacity and the right skills to enhance
Chartered's role as a long-term, premier pure-play foundry."
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About Chartered
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Chartered Semiconductor Manufacturing (Nasdaq:CHRT and
SES:CHART) is one of the world's leading independent foundries
providing wafer fabrication services. Guided by the tenets
of trust, service, partnership, advanced technology and
stability, the Company aims to provide world-class semiconductor
foundry services that enable customers to create and deliver
market-leading system-level solutions. Chartered operates
five fabrication facilities that serve high-growth, technologically
advanced applications such as communications and networking.
Headquartered in Singapore, Chartered employs approximately
3400 people at its 12 locations in North America, Asia
and Europe.
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Chartered completed its global initial public offering
in October 1999 and is traded in the United States on
Nasdaq and in Singapore on the Singapore Exchange (SGX).
The Company reported 1999 revenues of US $694.3 million.
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This news release contains forward-looking statements,
as defined in the safe harbor provisions of the United
States Private Securities Litigation Reform Act of 1995.
These forward-looking statements --including without limitation
statements relating to capacity acceleration, capital
expenditures, and the construction of a new facility more
particularly described under the heading "Capacity Ramp
Acceleration" -- reflect the Company's current views with
respect to future events and financial performance. These
statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially
from historical results or those anticipated. For example,
changes in the market outlook, customer demand, delays
in the delivery of equipment and regulatory issues could
affect our capacity acceleration plans, including the
construction of the new facility. Although the Company
believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can
give no assurance that its expectations will be attained.
In addition, a description of certain other risks and
uncertainties which could cause actual results to differ
materially from those indicated in the forward-ooking
statements can be found in the section captioned "Risk
Factors" in the Company's prospectus dated October 29,
1999. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
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