Press Releases

SMIC Reports 2016 Third Quarter Results

07 Nov 2016

All currency figures stated in this report are in US Dollars unless stated otherwise.

The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).

Shanghai, China – November 7, 2016. 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 September 30, 2016.

Third Quarter 2016 Highlights

  • Revenue was a record high of $774.8 million in 3Q16, an increase of 12.3% QoQ from $690.2 million in 2Q16 and an increase of 36.0% YoY from $569.9 million in 3Q15.
  • Gross profit was $232.1 million in 3Q16, compared to $217.8 million in 2Q16 and $182.4 million in 3Q15.
  • Gross margin was 30.0% in 3Q16, compared to 31.6% in 2Q16 and 32.0% in 3Q15.
  • Net profit for the period attributable to SMIC was $113.6 million in 3Q16, as compared to $97.6 million in 2Q16 and $82.6 million in 3Q15.
  • Return on equity was 11.4% in 3Q16, compared to 10.2% in 2Q16 and 9.3% in 3Q15.

Fourth Quarter 2016 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 increase by 5% to 7% QoQ.
  • Gross margin to range from 28% to 30%.
  • 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 $184 million.
  • Non-controlling interests of our majority-owned subsidiaries to range from positive $37 million to positive $39 million (losses to be borne by non-controlling interests).

Dr. Tzu-Yin Chiu, SMIC’s Chief Executive Officer and Executive Director commented, “SMIC is seeing robust demand across the board and we reiterate our growth target of 20% compounded annual growth from 2016 to 2019. In 2016, SMIC is growing in excess of 28% YoY. We are forecasting growth for both 4Q16 and 1Q17 given current visibility. We are on track to achieve another record year of revenue and net profit attributable to SMIC.

We had a fantastic third quarter, achieving our 7th consecutive quarter of revenue growth and 18th consecutive quarter of profit. Our revenue was a record high of $774.8 million, representing a growth of 36.0% YoY and 12.3% QoQ. Our net profit attributable to SMIC was also a record high of 113.6 million, a growth of 37.4% YoY and 16.3% QoQ. This marks the first time our quarterly net profit exceeds $100 million, and the second consecutive quarter to exceed 10% ROE.

We are still experiencing robust demand from various regions, applications, and nodes, and we are addressing the demand opportunities by laying the foundation for continued growth with prudent expansion to meet customers’ needs. In the last month, we announced several new fab construction projects to address our diverse demand. Actual production capacity will only be executed with careful planning to meet overlapping conditions of assured customer demand, technological readiness, and sustained profitability.”

Conference Call / Webcast Announcement

Date: November 8, 2016
Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code:

China +86 400-620-8038 (Pass code: SMIC)
Hong Kong +852 3018-6771 (Pass code: SMIC)
Taiwan +886 2-2650-7825 (Pass code: SMIC)
United States, New York +1 845-675-0437 (Pass code: SMIC)

The call will be webcast live with audio at or

An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.

About SMIC

Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in mainland China. SMIC provides integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 28 nanometer. Headquartered in Shanghai, China, SMIC has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm mega-fab in Shanghai; a 300mm mega-fab and a majority-owned 300mm fab for advanced nodes in Beijing; 200mm fabs in Tianjin and Shenzhen; and a majority-owned joint-venture 300mm bumping facility in Jiangyin; additionally, in Italy SMIC has a majority-owned 200mm fab. SMIC also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.

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Safe Harbor Statements
(Under the Private Securities Litigation Reform Act of 1995)

This press release contains, in addition to historical information, “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements under “Fourth Quarter 2016 Guidance”, “CapEx Summary” and the statements contained in the quotes of our CEO are based on SMIC’s current assumptions, expectations and projections about future events. SMIC uses words like “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “target” and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC’s actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with the cyclical nature of the semiconductor industry, changes in demand for our products, competition in our markets, our reliance on a small number of customers, orders or judgments from pending litigation, intensive intellectual property lawsuits in semiconductor industry and financial stability in end markets, general economic conditions and fluctuations in currency exchange rates.

Investors should consider the information contained in SMIC’s filings with the U.S. Securities and Exchange Commission (“SEC”), including its annual report on 20-F filed with the SEC on April 25, 2016, especially the consolidated financial statements, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited (“SEHK”) from time to time, including current reports on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC’s future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as may be required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.

About Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Measures

To supplement SMIC’s consolidated financial results presented in accordance with IFRS, SMIC uses in this press release non-GAAP measures of operating results that are adjusted to exclude finance cost, depreciation and amortization, income tax expenses, the effect of employee bonus accrual, government funding and gain from the disposal of living quarters. This earnings release also includes fourth quarter 2016 guidance for non-GAAP operating expenses. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. This earnings release includes EBITDA margin and non-GAAP operating expenses which consist of total operating expenses as adjusted to exclude the effect of employee bonus accrual, government funding and gain from the disposal of living quarters. These non-GAAP financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for financial measures prepared in accordance with IFRS, and should be read only in conjunction with the Group's financial measures prepared in accordance with IFRS. The Group's non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies.

SMIC believes that use of these non-GAAP financial measures facilitates investors’ and management’s comparisons to SMIC’s historical performance. The Group’s management regularly uses these non-GAAP financial measures to understand, manage and evaluate the Group's business and make financial and operational decisions.

The accompanying table has more information and reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis because the effect of these adjustment items excluded for the purpose of non-GAAP operating expenses guidance are subject to some unpredictable conditions that cannot be estimated with reasonable certainty.

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