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SMIC Reports 2017 Second Quarter Results

BEIJING, Aug. 8, 2017  -- Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended June 30, 2017.

Second Quarter 201 7 Highlights

  • Revenue was $751.2 million in 2Q17, a decrease of 5.3% QoQ from $793.1 million in 1Q17 and an increase of 8.8% YoY from $690.2 million in 2Q16.
  • Gross profit was $194.1 million in 2Q17, compared to $220.8 million in 1Q17 and $217.8 million in 2Q16.
  • Gross margin was 25.8% in 2Q17, compared to 27.8% in 1Q17 and 31.6% in 2Q16.

Third Quarter 201 7 Guidance:

The following statements are forward looking statements based on current expectations and involved risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below. The Company expects:

  • Revenue to be flat to up by 3% QoQ.
  • Gross margin to range from 22% to 24%.
  • Non-GAAP operating expenses, excluding the effect of employee bonus accrual, government funding and gain from the disposal of living quarters, to range from $179 million to $185 million.
  • Non-controlling interests of our majority-owned subsidiaries to range from zero to positive $3 million (losses to be borne by non-controlling interests).

Dr. Haijun Zhao, SMIC's Chief Executive Officer, commented, "Our second quarter revenue grew 8.8% year over year and declined 5.3% quarter over quarter. Most of our year over year growth, by application, came from automotive and industrial, and by device, from CMOS image sensors, NOR flash, application processors and power IC.

This year our team continues to ramp up 28nm, which will be one of our primary growth drivers. 28nm grew 12-fold year over year and 24.8% quarter over quarter, and is on track to reach high single-digits contribution by Q4 this year. In addition, we are happy to see that fingerprint sensors have begun to pick up strongly. We also see continued growth in flash memory and collaborate closely with our clients to capture opportunities in new handset models, IOT, automotive, and industrial segments.

Our sustainable profitability strategy remains: to fully utilize existing assets, differentiate technology, and advance technology to serve the migration of our customers' products. First, we must work to expand our cooperation with existing customers. Second, we aim for excellence in mature technology. Third, we aim to improve specialty platforms in which we already hold good market share, such as CIS, special MCU, flash memory and others.

Although the near-term outlook is not as seasonally expected, we work diligently to maintain our position as the foundry-of-choice in China. Through deepening cooperation with customers, enhancing product quality/service/and offerings, SMIC is in a great position to benefit from the broad-based growth in the semiconductor market."