SMIC's Q4 loss widens on weak economy


SEMICONDUCTOR Manufacturing International Corporation, the biggest made-to-order chip maker in the Chinese mainland, yesterday reported a wider loss because of a sluggish global economy which has dampened chip demand.

SMIC's loss widened to US$165.6 million in the fourth quarter, from a loss of US$88.1 million in the previous quarter.

Its revenue in the fourth quarter fell 29.1 percent annually to US$289.6 million.

Observers attributed SMIC's wider loss to weakness in the global economy, which crimped demand for chips used in mobile phones, TVs and cars.

But the Hong Kong-listed company and analysts predicted its revenue would rebound in the first quarter due to surging Chinese demand and advances in technology.

"With rising customer confidence and a recovering economy, we are seeing a rebound in the first quarter of this year, and we expect growth to continue in the second quarter," Chiu Tzu-Yin, chief executive of SMIC, said in a statement.

In the first quarter of this year, SMIC revenue may rise between 7 percent and 9 percent annually, according to the statement.

Chinese made-to-order chip makers may generate more revenue in 2012 because they have developed unique competitive abilities globally, said Vincent Gu, a Shanghai-based semiconductor analyst at IHS iSuppli, a US-based research firm.

He predicted that SMIC's China revenue is expected to expand 20 percent annually in 2012.


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