SMIC is expected in the two quarter is expected to be profitable in the three quarter

According to an analyst expects SMIC's second quarter results will be expected and may be profitable in the third quarter. The company will announce its second quarter results on Thursday, July 28th. Investment bank Piper Jaffray (Minneapolis) analyst C. William Lu also improved SMIC 2005 results are expected that the second half of the outlook is better than expected.

The investment bank expects SMIC second quarter loss of $0.09 per share, sales of $283 million 600 thousand. Lu is expected in a report, SMIC performance and expectations are consistent, the average sales price fell 2% compared with the previous quarter, wafer shipments increased by 17%, the capacity of the operating rate of 87%." SMIC in the first quarter of this year, sales of $248 million 800 thousand, an increase of $291 million 800 thousand in the first quarter sales of $14.7%. SMIC said its net loss in the first quarter of this year rose to $30 million, while the loss of only $fourth in the last quarter of $11 million 200 thousand.

Part of the reason for the loss is due to the cost of litigation settlement between the two sides caused by the cost of electricity. TSMC said last year that it had reached an out of court settlement with the mainland's chip foundry SMIC on patent infringement and related issues. In accordance with the terms of the settlement, in order to resolve the case involving patent and trade secret litigation, SMIC will pay TSMC about $175 million. But after a period of losses, SMIC may achieve profitability in the third quarter. Prior to this, Lu had expected SMIC third quarter loss of $0.05 per share, while analysts expected an average loss of $0.02 per share.

Lu said: "we expect the SMIC third quarter sales will be strong growth, we think the growth rate will reach 15-20%, the average sales price of last quarter and an increase of more than 10%, the wafer production capacity utilization rate above 90%." He expects growth in the four quarter of moderate, wafer shipments increased by an average of $6%, the average sales price growth and production capacity of about 95%." Lu core technology in view of the international advanced equipment, improve SMIC's 2005 full year forecast. Sales are expected to grow from $1 billion 170 million to $1 billion 240 million. Loss per share from the previously estimated $0.22 to $0.11.