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CHARTERED SEMICONDUCTOR REPORTS FIRST-QUARTER
2000 Results
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Further
Penetration of the Communications Market and Continued
Operational Gains Result in Strong First Quarter
Performance
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*All
currency figures stated in this news release are
in US dollars
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- SINGAPORE
- April 19, 2000 -- Chartered Semiconductor Manufacturing
(Nasdaq: CHRT and SGX-ST: CHARTERED) has announced
financial results for its first-quarter ended March
31, 2000. The Company reported net revenues of $238.4
million (US)* for first-quarter 2000, an increase
of 82% over net revenues of $130.8 million in first-quarter
1999. Net revenues, including Chartered's share of
its minority-owned joint-venture company, were $261.6
million for the first-quarter, up 100% from $130.8
million in net revenues from the same quarter a year
ago.
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- The
first-quarter 2000 earnings per American Depositary
Share (ADS) and earnings per share (EPS) on a fully
diluted basis were $0.29 and $0.03 respectively, compared
with a loss of $0.35 and $0.04 respectively in first-quarter
1999.
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- Net
income for the first-quarter 2000 of $37.8 million
or 16% of net revenues, reflected an improvement of
$72.7 million from negative $34.9 million or negative
27% of net revenues in the first-quarter 1999. The
first-quarter 1999 net loss included a $6.5 million
charge associated with the termination of a development
program. For the first-quarter 2000, increased capacity
utilization and higher average selling prices on an
increased volume of shipments drove the gross profit
to $84.1 million, or 35% of net revenues, from $12.7
million, or 10% of net revenues in the same quarter
a year ago. These results continue to demonstrate
improved operating leverage as the Company ramps its
wafer fabs toward full production.
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- Additional
leverage was also achieved in operating expenses.
Recurring operating expenses as a percentage of net
revenues were 18% in first-quarter 2000 compared to
26% in first quarter 1999. In first-quarter 2000,
the Company incurred $11.7 million related to pre-production
start-up costs in Fab 6. We currently expect Fab 6
to produce its first revenue wafers in mid second-quarter
2000, two months ahead of the earlier plan.
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- "Our
strong first quarter results reflect the continued
execution of our strategies for better serving the
communications markets while continuing to push for
operational excellence. We have gained additional
margin benefits from improved operating leverage as
each of our fabs was able to achieve higher output
and efficiencies" said Barry Waite, President &
CEO of Chartered, summarizing the results of the quarter.
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- Wafer
Shipments and Average Selling Prices
- Shipments
in first-quarter 2000 were 210.1 thousand wafers (eight-inch
equivalent), an increase of 37% compared to 153.8
thousand in first-quarter 1999. This was primarily
due to the addition of new customers and higher demand
resulting from what the Company believes is the increased
trend toward outsourcing by Integrated Device Manufacturers
(IDMs) and System OEMs. Average selling prices (ASPs)
improved in first-quarter 2000 compared to the same
period last year primarily as a result of wafer shipments
with a higher mix of advanced technologies. ASPs increased
by 24% to $1,134 per wafer in first-quarter 2000 compared
to $916 per wafer (adjusted to exclude the terminated
print-head business) in first-quarter 1999. On a comparable
basis, ASP in fourth-quarter 1999 was $1,108, with
a product mix similar to that of the first-quarter
2000.
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- Market
Dynamics
- The
Company continued to make good progress in moving
its product mix toward value-added systems-level technologies.
For the twelve months ending March 31, 2000, 48% of
net revenues came from the communications market segment
compared to 44% in the twelve months ending December
31, 1999. This trend was also reflected geographically
as Europe, with its high concentration of IDMs and
systems companies serving the global communications
market, continued to record the fastest growth.
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Breakdown by market segments*
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Twelve
months ending
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December
31, 1999
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March
31, 2000
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Market
Segment
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%
of Net revenues
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%
of Net revenues
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Communications
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44
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48
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Computer
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34
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30
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Consumer
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14
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14
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Memory
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7
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7
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Others
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1
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1
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Breakdown
by region*
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Twelve
months ending
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December
31, 1999
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March
31, 2000
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Region
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%
of Net revenues
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%
of Net revenues
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America
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69
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64
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Europe
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13
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19
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Asia
– Pacific
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15
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14
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Japan
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3
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3
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* Including Chartered’s share of its minority-owned
joint-venture company
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“This quarter’s results continue to validate our strategic
direction. Chartered is well positioned to take advantage
of the two mega-trends that the semiconductor industry
is witnessing: faster adoption of the foundry outsourcing
business model, and the explosive growth in communications.
We will continue to invest in technology, capacity
and the right skills to enhance our positioning in
the marketplace,” Waite said.
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Outlook
- The
Company believes that the outlook for longer-term
growth in the foundry services market continues to
strengthen. Dataquest has recently increased their
growth projections as has International Data Corporation
who, in a March 2000 report, projected a 40% compound
annual growth rate for the period 1999 through 2004,
driven by assumptions that both integrated device
manufacturers and systems OEMs will step up their
outsourcing significantly in the coming years. We
believe that Chartered has the appropriate business
model and strategy to take advantage of this opportunity.
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About Chartered
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Chartered
Semiconductor Manufacturing (Nasdaq: CHRT and SGX-ST:
CHARTERED) 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 11 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
Securities Trading Limited (SGX-ST). The Company
reported 1999 net revenues of US $694.3 million.
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Safe Harbor Statement under the provisions of the
United States Private Securities Litigation Reform
Act of 1995
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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
the statements relating to the production of the
first revenue wafers at Fab 6, the increased trends
in outsourcing by the Company's customers and the
Company's position to take advantage of it, the
Company's continued investment in technology, capacity
and skills, the outlook for longer-term growth in
the foundry services market and the appropriateness
of the Company's business model and strategy, reflect
the Company's 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. For example, delays
and interruptions in the production schedule for
our Fab 6 and changes in the market outlook and
customer demands could affect the foregoing forward-looking
statements. 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.
A description of certain of the risks and uncertainties
which could cause actual results to differ materially
from those indicated in the forward-looking statements
can be found in the section captioned "Risk Factors"
in the Company's Annual Report on Form 20-F filed
with the U.S. Securities and exchange Commission.
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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