China-based IC foundry Semiconductor Manufacturing International (SMIC) expects to post revenue growth of 3-6% sequentially in the fourth quarter of 2015, with gross margin ranging from 28% to 30%.
"We have achieved a strong 2015 so far, our best historically in terms of revenue, profitability and utilization," said SMIC CEO and executive director Tzu-Yin Chiu. "We expect growth again in the fourth quarter, which would represent four consecutive quarters of growth in 2015. With our Q4 guidance, our 2015 revenue is expected to grow more than 10% year over year."
"We have started to book small 28nm revenue contributions in Q3 this year," Chiu also noted.
SMIC reported revenues of US$569.9 million in the third quarter of 2015 representing increases of 4.3% on quarter and 9.2% on year. Gross margin was 32% in the third quarter, compared with 32.3% in the second quarter and 25.9% during the same period in 2014.
SMIC's sales generated from 45nm and below processes accounted for 15.6% of the company's overall revenues in the third quarter compared with 15.3% in the second quarter and 10.4% in third-quarter 2014, the company revealed.
SMIC generated net profits of US$82.6 million in the third quarter of 2015, up 7.7% sequentially and 73.9% from a year earlier. Earnings per ADS for the quarter came to US$0.10..
Standing pat on capex
SMIC reiterated that its capital expenditure for 2015 foundry operations will be $1.5 billion, part of which will come from the Chinese government. TSMC last month cut its capex to about $8 billion.
SMIC said its strength is in part due to customers among the nearly 600 design houses in China and growth from international customers that have become more interested in manufacturing in China. During the third quarter, nearly 48 percent of the company’s sales came from customers in China, followed by North America at 34 percent. The company said its 2015 sales will probably grow more than 10 percent from a year ago.
SMIC said its capacity utilization exceeded 100 percent during the third quarter on strong demand for communications products, and its fabs will probably remain fully utilized during the fourth quarter and through the early part of next year.