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Printable Version
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CHARTERED REPORTS RECORD SECOND-QUARTER
2000 RESULTS
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Strong Second-Quarter Performance Due to Higher
Wafer Shipments, Productivity Improvements and Richer
Mix
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- *All
currency figures stated in this news release are in US
dollars
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Revenues
of $271.4 million, up 66% from 2Q 1999
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Earnings per ADS of $0.43, up $0.57 from 2Q 1999
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Earnings per ordinary share of $0.04, up $0.05 from
2Q 1999
- SINGAPORE
-- July 21, 2000 -- Chartered Semiconductor Manufacturing
(Nasdaq: CHRT and SGX-ST: CHARTERED) today announced record
revenues and net income for its second-quarter ended June
30, 2000, marking the sixth consecutive quarter of solid
growth and improved operating performance.
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"Our strong second-quarter results reflect the accelerated
productivity improvements we have been able to achieve
across our fabs and the continued success of our strategies
in the marketplace. We have been able to drive operational
improvements in parallel with our focus on customer and
product mix enrichment," reported Barry Waite, president
& CEO of Chartered, summarizing the results of the
quarter.
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Highlights of Second-Quarter Performance
- Net
revenues grew to $271.4 million for second-quarter 2000,
up 66% compared to $163.9 million in second-quarter 1999.
The significant increase in revenues was due primarily
to higher shipments, improved customer and product mix,
and enhanced pricing. Including Chartered's share of its
minority-owned joint-venture company, net revenues were
$299.6 million, up 83% from $164.0 million in the same
quarter a year ago.
- Gross
profit was $94.8 million, or 34.9% of net revenues, up
from $34.8 million, or 21.2% of net revenues, in the same
quarter a year ago, driven primarily by higher revenues
and lower unit costs. The second-quarter results included
costs associated with the start-up of Fab 6 and other
fab expansion projects, which were approximately 7% of
net revenues.
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Recurring
operating expenses, which exclude pre-production fab
start-up costs and stock-based compensation charges,
as a percentage of net revenues were 17.8% compared
to 20.6% in second-quarter 1999. General and administrative
(G&A) expenses increased $10.5 million due primarily
to increased staffing and other payroll related expenses.
Research and development (R&D) expense increased
by $6.9 million primarily due to additional investments
in next generation technology and modules in support
of our strategy to provide a full suite of process technologies
necessary for enabling system level integration. In
second-quarter 2000, Chartered incurred $5.6 million
related to pre-production start-up costs in Fab 6 and
Fab 7.
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Net
income of $58.0 million, or 21.4% of net revenues,
reflected an improvement of $71.6 million from negative
$13.6 million, or negative 8.3% of net revenues, in
the same quarter a year ago. Higher net interest income
accounted for $12.8 million of this improvement.
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Earnings
per American Depositary Share (ADS) and earnings per
share (EPS) were $0.43 and $0.04 respectively on a diluted
basis, compared with a loss of $0.14 and $0.01 respectively
in second-quarter 1999. Average diluted ADS count and
ordinary share count increased by 37.3 million and 372.8
million respectively, primarily due to the initial public
offering in October 1999 and the follow-on offering
in May 2000.
Wafer
Shipments and Average Selling Prices
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Shipments in second-quarter 2000 were 226.2 thousand
wafers (eight-inch equivalent), an increase of 45% compared
to 156.5 thousand (adjusted to exclude the terminated
print-head business) in second-quarter 1999. High growth
networking and related communications markets accounted
for the majority of this increased demand.
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Average Selling Price (ASP) increased by 19% to $1,200
per wafer in second-quarter 2000 compared to $1,007 per
wafer (adjusted to exclude the terminated print-head business)
in second-quarter 1999. ASP improved as a result of customer
and product mix enrichment and enhanced pricing.
- Capacity
utilization was 107% in second-quarter of the year compared
to 103% during the same quarter last year.
Market
Dynamic
The
communications segment continued to be the largest contributor
to revenues, in line with our strategic emphasis on delivering
a suite of technologies and services centered on the needs
of communications markets.
Revenue
Breakdown by Market Segment*
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Twelve
months ending
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March
31, 2000
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June
30, 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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48
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52
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Computer
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30
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25
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Consumer
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14
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15
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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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- *Including
Chartered's share of its minority-owed joint-venture company
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Revenue Breakdown by Region*
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Twelve
months ending
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March
31, 2000
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June
30, 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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64
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59
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Europe
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19
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24
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Asia – Pacific
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14
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13
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Japan
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3
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4
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*Including Chartered's share of its minority-owed joint-venture
company
Highlights of Second-Quarter Activities and Achievements
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With accreditation received during the quarter, all of
Chartered's production fabs, excluding the newly operational
Fab 6, now have attained the highly coveted QS-9000 certification.
This internationally recognized standard couples ISO 9000
discipline with more rigorous application of continuous
improvement and defect prevention methodologies.
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Chartered's new fab, Fab 6 started producing revenue wafers
in the month of May 2000, two months ahead of the original
schedule. Construction of Fab 7, a 60,000 wafer per month
mega-fab, continued on schedule during the quarter, with
first wafer output planned for mid-2001.
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In May 2000, the eFAB™ Alliance, formed by Agilent Technologies
Inc., Chartered Semiconductor Manufacturing, Lucent Technologies
and Motorola selected RosettaNet to be the beneficiary
of their joint work on foundry e-commerce interfaces.
Utilizing this, RosettaNet will architect the first open
industry standard for secure electronic communications
between foundries and their customers, suppliers and marketing
partners. We believe this arrangement will reinforce Chartered's
leadership in the industry and its partnering strategy
to provide flexible manufacturing solutions for its customers.
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In May 2000, Chartered successfully completed a follow-on
global offering of ordinary shares and ADSs. The Company
sold 89.7 million ordinary shares (or ADS equivalent)
raising approximately $566 million, net of expenses. The
funds will be used primarily for capital expenditures.
With the proceeds from this offering, Chartered has strengthened
its balance sheet and has substantial operating flexibility
going forward.
"We
are pleased with the recent accomplishments of Chartered employees
worldwide. Our market focus and dedication to operational
excellence is clearly visible to our customers and evident
in our financial results. As the world's third largest foundry,
we remain focussed on enabling our customers to create and
deliver market-leading solutions," concluded Barry Waite.
Outlook
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.
About
Chartered
Chartered Semiconductor Manufacturing (Nasdaq: CHRT and SGX-ST:
CHARTERED) is one of the world's top three 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.
Chartered 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.
Safe
Harbor Statement under the provisions of the United States
Private Securities Litigation Reform Act of 1995
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 initial
production of Fab 7, 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 construction or production schedules
for our Fab 7 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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