China's SMIC reports yet another loss - Network World

Skip Links

DNSstuff.com
Get information about your IP
IP Information
50+ On-demand DNS and network tools

Data Center

Videos

rssRss Feed
Get instant email notification when white papers, webcasts, executive guides are added to our library.  Stay informed and up-to-date with the latest on IT Technologies with Network World's Resource Alerts.
Audio

Don't get 'Green Scammed'. Listen now!

Network World's Newsmaker of the Week

Cisco opens ISR routers to developers; SaaS providers cut costs with open source. Listen now!

Network World 360

Additional Resources

RSS

FEATURED WHITEPAPERS

Auditing and Recovery for Active Directory: What's New in Windows Server 2008 NetPro

Windows Server 2008 is not intended to be a "one size fits all" solution and Microsoft relies on third-party solutions to enhance and extend Windows Server 2008 to accommodate functions like auditing, backup and recovery. Here, we look specifically at audit and recovery capabilities for Active Directory and learn where Windows Server 2008 toolset leaves off, and where the right third-party solution can provide broader coverage and enhanced management capabilities.

RSS

FEATURED REPORTS

Executive Guide: Storage Heats Up HP

Get the latest on storage technologies that allow IT professionals to better cope with new IT demands. Learn how storage technologies can help you successfully tackle e-Discover, regulatory compliance, green data center initiatives and the data explosion. Get all the details now.

RSS

FEATURED WEBCASTS

Learn how to Create a More Efficient Virtualized Data Center Novell

Find out how you can consolidate Windows workloads and create a more efficient virtualized data center in this informative webcast, "Reduce Complexity and Cost - Windows Server Consolidation with Virtualization." Six concise webcast modules are available for your viewing. Watch them all consecutively or only the topics that interest you. The modules cover performance, user case studies, enterprise-level support, managing windows workloads, setup and configuration and the future of virtualization. Learn more today. Register below to learn more and be entered to win an Archos 605 Portable Media Player.

IT Buyer's Guides

View All Buyer's Guides

Free Newsletters

Sign up and receive the latest news, reviews and trends on your favorite technology topics

Save The Date!
What They Are Saying

Shareholders need to demand long-term assestment of Management performance instead of just short term....- Anonymous

Join the Discussion

Partner Content

Explore the Ultrium Edge

The powerful tape technology can address data security with tape encryption as well as long term data protection.

Find out more

Disk and Tape Square Off

Discover what disk and tape really cost -- and which solution provides lower total cost of ownership and optimizes energy use for your organization

Download the White Paper

Don't Fall For The Myths

The Clipper Group explores the truth behind the myths of tape, digging into the misconceptions in the disk vs. tape debate.

Download the White Paper

Will You Add Tape Too?

Over two thirds of disk-only users look to add tape back into storage infrastructure according to recent survey.

Download Survey Information

China's SMIC reports yet another loss

By Sumner Lemon , IDG News Service , 07/26/2007
  • Social Web 
  • Email 
  • Feedback 
  • Close

Red ink continues to flow from Semiconductor Manufacturing International Corp. China's largest chip maker reported another loss during the second quarter as its struggle with profitability dragged on.

SMIC reported a second-quarter loss of $2.1 million on revenue of $374.8 million. Excluding subsidies from the Chinese government, SMIC's losses were greater still. Without this non-operating income, the company turned in a loss of $8.6 million.

By comparison, SMIC reported a profit of $1.4 million on revenue of $361.4 million during the same period last year. But the company's profit during that period came as the result of an $18.9 million tax credit. Without that one-time gain, the company had a loss of $17.3 million.

These are dark days for SMIC, once the darling of pundits who predicted the company would lead China to dominate the contract chip-making market. Instead the Shanghai company has struggled to turn a profit in recent years, even as rivals in Taiwan and Singapore showed better results.

Richard Chang, SMIC's founder and CEO, described the second quarter as a "most difficult quarter" during a conference call with analysts. Chang said the company will post better results during the third and fourth quarters. "Our goal is still to be profitable for the entire year," he said.

SMIC reported a $9 million profit during the first quarter, thanks to a $6 million tax credit and a one-time gain of $27.2 million from the sale of used chip-making equipment. These results underscore SMIC's recent reliance on one-time gains to turn a profit.

SMIC's gross margin -- which shows the basic profitability of the chips it makes -- underscores the company's profitability problem. SMIC's gross margin during the second quarter was 10.3%.

By comparison, Taiwan Semiconductor Manufacturing Co. (TSMC), the top contract chip maker, reported its gross margin during the same period was 43%. Singapore's Chartered Semiconductor Manufacturing's second-quarter gross margin was 24.2%.

More troubling for SMIC, the company's gross margin has declined over time, suggesting it's under pressure to cut its manufacturing prices. During the second quarter of 2006, the company's gross margin was 12%.

1 | 2 |  Next >
Comment
Login
Forgot your account info?
Add comment
Anonymous comments subject to moderator approval. Register here for member benefits.
Have a NetworkWorld account? Log in here. Register now for a free account.
First Name
Last Name
E-mail
Zip Code