Semiconductor Manufacturing International Corp. · HKEX:981

Semiconductor Manufacturing International — Investor Presentation (February 2014)

28 slides from Semiconductor Manufacturing International's investor presentation, February 2014

  1. Slide 1: SMIC Investor Presentation

    SMIC Investor Presentation NYSE: SMI HKSE: 0981-HK February 2014

  2. Slide 2: Safe Harbor Statements

    Safe Harbor Statements Under the Private Securities Litigation Reform Act of 1995 This presentation 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 for

  3. Slide 3: Agenda: Introduction

     Introduction  Market Opportunity  Strategies for Profit Sustainability  Financial Performance  Concluding Remarks SMIC Investor Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 3 SMIC shall not be r

  4. Slide 4: SMIC: Largest China Based Semiconductor Foundry

    SMIC: Largest China Based Semiconductor Foundry Company Overview Strong Global Presence  Established in 2000, headquartered in Shanghai China China USA Beijing Tianjin  Listed both on HKSE and NYSE Santa Clara Italy China Headquarters  The leading semiconductor foundry in China Orange Shanghai Co

  5. Slide 5: The Leader of China Based Semiconductor Foundry

    The Leader of China Based Semiconductor Foundry Beijing 12’’ Fab 36K/mth (55-90nm, 0.13um) Beijing JV 12’’ Fab (under construction) Shanghai 12’’Fab Tianjin 8” Fab 12K/mth (28/40/45nm) 36K/mth (0.18-0.35um) Shenzhen 8” Fab Shanghai 8’’ Fab (under development) 90K/mth (0.11-0.35um) Fab 4Q13 Expansion

  6. Slide 6: Experienced Management Team

    Experienced Management Team  1997–2009: Chairman, Hua Hong Group (first 8‖ foundry in China) Chairman  1995–1998: Vice Minister, Ministry of Electronics Wenyi Zhang  1983–1995: CEO, IRICO (largest TV CRT manufacturer in China)  2009–2011: President & CEO, HHNEC (foundry) Chairman  2007–2009: Pr

  7. Slide 7: Sustainable Profitability and Growth

    Sustainable Profitability and Growth Unit: US$mm 2013 Financial Highlights 2,069 1,702  Revenue: $2,069 million, historical high, grew 21.6% YoY 1,319  Net profit*: $173.2 million, historical high, increased 6.6 times YoY  Cash from operations: $738 million, increased 69.6% YoY  Cash on hand: $4

  8. Slide 8: Market Opportunity

     Introduction  Market Opportunity  Strategies for Profit Sustainability  Financial Performance  Concluding Remarks SMIC Investor Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 8 SMIC shall not be r

  9. Slide 9: China IC Market is the Growth Engine for the Worldwide Semiconductor Industry

    China IC Market is the Growth Engine for the Worldwide Semiconductor Industry Total China IC Market & Local Brands Chinese vs. Global Fabless Market & Design Revenue (US$bn) (US$bn) During global Total China IC market Local brands* Local design financial crisis Post financial crisis 160 139 Chinese

  10. Slide 10: Mobile Devices are Key Drivers of China IC Market

    Mobile Devices are Key Drivers of China IC Market Semiconductor IC – Value Chain in China China Smartphone Unit Production (mm) Chinese Fabless Chinese ODMs 997 1,111 851 670 421 228 2011 2012 2013E 2014E 2015E 2016E Largest and Most Advanced China Tablets Unit Production Foundry in (mm) China 379 3

  11. Slide 11: SMIC is Well Positioned to Capture Strong Demand from the China IC Industry

    SMIC is Well Positioned to Capture Strong Demand from the China IC Industry SMIC’s Strong Position in China IC Ecosystem China’s Revenue Share at SMIC is Expanding Total 2007 2012 2013* Rev. $1.5B $1.7B $2.1B Material Eurasia Eurasia China 11.1% 11% 12% Fabless China Equipment China Fab-lite Eurasia

  12. Slide 12: Strategies for Profit Sustainability

     Introduction  Market Opportunity  Strategies for Profit Sustainability  Financial Performance  Concluding Remarks SMIC Investor Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 12 SMIC shall not be

  13. Slide 13: Executing Trio-Strategy for Sustainable Profitability & Growth

    Executing Trio-Strategy for Sustainable Profitability & Growth NEAR-TERM Fully utilize existing assets MEDIUM-TERM Differentiate technology, bringing added value & innovation LONG-TERM Pushing onward with advanced technology SMIC Investor Presentation All copyrights and IP belong to SMIC. For refere

  14. Slide 14: Near-term Strategy Execution

    Near-term Strategy Execution Revenue and Profit* Improvement  Delivering Quality 2,069  Improving Service 1,702 Revenue 1,319 Profit*  Increasing Efficiency  Providing Solutions (247) 23 173 US$mm  Profitability 2011 2012 2013** Improved Productivity Improved Asset Turnover Unit: US$K/Headcount

  15. Slide 15: Mid-term Differentiation Strategy

    Mid-term Differentiation Strategy Digital Logic 20/14nm RF/MS 28nm 28nm 40nm 40nm e-NVM CIS 65/55nm 65/55nm 55nm 65nm BSI Product 90nm 90nm 90nm 90nm BSI PMIC & Other IC 3DIC & Sensors Other IC 0.11µm 0.11µm 0.11µm 0.13µm BSI 12‖ Interposer Process 0.13µm 0.13µm 0.13µm 0.13µm FSI 0.13µm 0.13µm 0.13u

  16. Slide 16: Long-Term Strategy Execution

    Long-Term Strategy Execution 28nm  Process frozen  Entered Multi Project Wafer (MPW) stage for both PolySiON and HKMG  Over 100 IPs are prepared Technology  Worldwide design houses showing interests Roadmap 40nm  Accounted for 16.3% of wafer revenue in 4Q2013  New tape outs grew significantly

  17. Slide 17: Financial Performance

     Introduction  Market Opportunity  Strategies for Profit Sustainability  Financial Performance  Concluding Remarks SMIC Investor Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 17 SMIC shall not be

  18. Slide 18: Substantial Financial Improvement

    Substantial Financial Improvement (US$ millions) 2011 2012 2013* YoY Revenue 1,319 1,702 2,069 +22% Gross Margin 7.7% 20.5% 21.2% +0.7 ppts Profit (Loss)** (246.8) 22.8 173.2 +150.4 Capex 765 499 770 +271 Note: *2013 annual figures are based on unaudited results **Profit refers to profit attributabl

  19. Slide 19: Management Team Delivered Impressive Turnaround

    Management Team Delivered Impressive Turnaround Revenue, Utilization Rate Gross Profit, Net Profit*, Gross Margin (US$mm) (US$mm) Gross profit Net Profit Gross Margin 27.5% 95% 99% 24.1% 25.0% 92% 91% 89% 19.9% 21.0% 88% 87% 19.6% 18.9% 135.2 12.0% 126.8 74% 112.0 39 31 8 101.7 49 29 96.8 98.3 92.9

  20. Slide 20: EBITDA and Gross Debt to Equity

    EBITDA and Gross Debt to Equity EBITDA and Gross Debt to Equity (US$mm) 49.3% 50.1% 48.2% 47.6% 44.1% 45.2% 41.3% 43.1% 220 198 188 188 166 155 158 95 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 EBITDA D/E Note: EBITDA = Profit before tax + Depreciation and Amortization + Finance costs – Interest Income

  21. Slide 21: SMIC Convertible Bond offering

    SMIC Convertible Bond offering Oct. 24 2013 • SMIC successfully completed a $200M convertible bond offering • The transaction attracted strong demand from more than 100 global investors • Was multiple subscribed shortly after book opened • Total orders placed was over $1.8B. The CB terms achieved wa

  22. Slide 22: SMIC Cayman - Capital Raising

    SMIC Cayman - Capital Raising  Summary of terms Pricing date October 24, 2013 Issuer Semiconductor Manufacturing International Corporation Tenor 5-year maturity and 3-year put Deal size US$200M A forced conversion feature – the company could force early conversion after 2 years Call if stock price

  23. Slide 23: 1Q 2014 Guidance

    1Q 2014 Guidance* (US$ millions) 1Q 2014 QoQ Revenue $440M~$460M -9~-5% Gross Margin 16% ~ 19% -3.2 ~-0.2 ppts Non-GAAP $88M~$92M +3.7~+8.4 % Operating Expenses** Note: *This guidance is based on a number of assumptions that SMIC believes were reasonable as of Feb 17, 2014, the date of the SMIC’s ea

  24. Slide 24: Concluding Remarks

     Introduction  Market Opportunity  Strategies for Profit Sustainability  Financial Performance  Concluding Remarks SMIC Investor Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 24 SMIC shall not be

  25. Slide 25: Concluding Remarks

    Concluding Remarks Summary of Highlights The Right  SMIC is in the right location – located in China, the Location largest and fastest growing IC market The Right  SMIC is in the right market – strong focus on mobile Market business  SMIC has a focused profitability strategy Focused – Quality, Se

  26. Slide 26: Thank You

    Thank You Contact us: ir@smics.com SMIC Investor Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 26 SMIC shall not be responsible for any party’s reliance on these materials.

  27. Slide 27: Appendix

    Appendix To supplement SMIC’s consolidated financial results presented in accordance with IFRS, SMIC uses in this presentation measures of operating results that are adjusted to exclude wafer shipments from Wuhan Xinxin Semiconductor Manufacturing Corporation (―Wuhan Xinxin‖), which SMIC began gradu

  28. Slide 28: SMIC and JCET Establish a JV for back-end packaging

    SMIC and JCET Establish a JV for back-end packaging China's largest and most China’s largest packaging advanced semiconductor service provider foundry JV for 12" bumping and related testing to provide a high-quality, efficient and convenient one-stop-shop service for global customers focusing on the

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