Semiconductor Manufacturing International Corp. · HKEX:981
Semiconductor Manufacturing International — Investor Presentation (May 2017)
28 slides from Semiconductor Manufacturing International's investor presentation, May 2017
Slide 1: SMIC Presentation
SMIC Presentation NYSE: SMI HKSE: 0981-HK May 2017 This presentation is available at http://www.smics.com/download/ir_presentation.pdf
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
Slide 3: Agenda: Introduction, SMIC Performance, China Opportunity
Introduction SMIC Performance China Semiconductor Opportunity Strategies for Profitable Growth Concluding Remarks SMIC 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 respon
Slide 4: SMIC: Largest and Most Advanced IC Foundry in PRC
SMIC: Largest and Most Advanced IC Foundry in PRC Company Overview Strong Global Presence Italy China China Avezzano Beijing Tianjin Established in 2000, headquartered in Shanghai Germany USA China Italy Listed both on HKSE and NYSE Headquarters Shanghai The leading semiconductor foundry in Ch
Slide 5: SMIC's Brief History
SMIC’s Brief History 2,914 Revenue Net Profit attributable to SMIC 2,236 2,069 1,970 1,702 1,465 1,550 1,555 1,354 1,319 1,171 975 1,070 Q1: 793 366 377 173 253 Q1: 90 153 50 14 23 70 (3) (66) (44) (19) (440) 2014: Exited Wuhan business (103) (112) 2008: Completed exit (247) 2012: Net income 2016: R
Slide 6: Independent and International Board
Independent and International Board Executive Directors Zhou Zixue Gao Yonggang Chairman of the Board & Executive Director CFO & Executive Director • 2015 Joined SMIC • More than 20 years of experience in financial • 2009-2015 Chief Economist in MIIT management. • Previously Datang CFO Non-Executive
Slide 7: International and Experienced Management Team
International and Experienced Management Team 2009–2015: Chief Economist, Ministry of Industry and Information Technology of China (“MIIT”) Chairman 2008–2009: Director-General, Department of Finance Dr. Zhou Zixue of MIIT 2002–2008: Director-General, Ministry of Information Industry of China
Slide 8: 1Q17 Financial Highlights
1Q17 Financial Highlights Revenue: $793M, up 25% YoY Profit attributable to SMIC: $70M (20th consecutive profitable quarter) Gross profit: $221M, up 44% YoY EBITDA: $312M, record high Gross margin: 27.8% EBITDA margin: 39.4% Operating margin: 9.8% Cash & Other Financial Assets: $2.1B
Slide 9: 2016 Financial Achievements
2016 Financial Achievements SMIC Annual Revenue and Profit (US$mm) 2016 Financial Highlights Revenue from Wuhan Xinxin 3,500 Non-GAAP Revenue* Revenue: $2.9B, record high Profit attributable to SMIC 3,000 Gross Profit: $850M, record high 2,500 Gross Margin: 29.2% 2,000 107 Profit attributabl
Slide 10: SMIC Family of IC Manufacturing – Existing Fabs
SMIC Family of IC Manufacturing – Existing Fabs Beijing 12’’ Fab Shanghai 12’’Fab 48K/mth (55-90nm, 0.13um) 20K/mth (28/40/45nm) Beijing JV 12’’ Fab Italy LF 8” Fab 19K/mth (28/40/45nm) 40K/mth (90nm-0.18um) Shanghai 8’’ Fab 110K/mth (0.11-0.35um) Tianjin 8” Fab 45K/mth (0.13-0.35um) Monthly Fab She
Slide 11: New Fabs for Future Growth
New Fabs for Future Growth Tianjin • 8-inch fab • Targeting to be the World's Largest Integrated 8-inch IC Production Line Shanghai • Advanced 12-inch fab Shenzhen • Mature 12-inch fab • 1st 12-inch line in South China Actual production capacity will only be executed with careful planning to meet ov
Slide 12: Agenda: China Semiconductor Opportunity
Introduction SMIC Performance China Semiconductor Opportunity Strategies for Profitable Growth Concluding Remarks SMIC Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 12 SMIC shall not be respo
Slide 13: Improved Efficiency & Sustained Profitability
Improved Efficiency & Sustained Profitability Strong Revenues Growth (US$mm) Sustained Profit Capabilities 815 Net profit Gross Margin 793 Revenue excl. Wuhan Wuhan Revenue 775 32%32% 32% 30% 30% 28% 29% 29% 114104 690 27% 28% 24% 25% 26% 24% 98 21% 23% 83 20%20% 21% 77 75 19% 70 610634 39 31 8 57 5
Slide 14: Capex, EBITDA, and Cash levels
Capex, EBITDA, and Cash levels 2017 Capex Cash and EBITDA Guidance (US$mm) $2.3B Cash in hand * EBITDA Gross Debt/Equity Net Debt/Equity 56% 48% 47% 45% 2,158 39% 39% 2,109 34% 33% 27% 1,247 1,288 18% 1,063 767 16% 620 703 760 708 11% 409 1Q: 262 358 3% 312 $70mm 1% Foundry Non-foundry 2011 2012 201
Slide 15: Investment Grade Credit Rating
Investment Grade Credit Rating S&P investment grade BBB- long-term corporate credit rating since Oct 2013 Moody’s investment grade Baa3 corporate credit rating in Oct 2015 China Chengxin International Credit Rating Agency’s triple A rating in Nov 2015 Committed to Net Debt/EBITDA less than 2
Slide 16: Agenda: China Semiconductor Opportunity
Introduction SMIC Performance China Semiconductor Opportunity Strategies for Profitable Growth Concluding Remarks SMIC Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 16 SMIC shall not be respo
Slide 17: Rapid and Sustainable Growth of China IC Market
Rapid and Sustainable Growth of China IC Market China has become the world’s largest Chinese fabless market growth SMIC sees rapid growth of IC market (US$bn) (US$bn) revenue from China (US$mm) 2000 – China market share: 7% Chinese Fabless Global Fabless SMIC's China Revenue USA $64 Others $100 108
Slide 18: Rising Chinese Brands in Global Markets
Rising Chinese Brands in Global Markets Chinese System Brands Smartphone Brands Worldwide Shipment Share Y16 Shipment Ranking Y14~Y16 Samsung, Apple, and Huawei still dominate the Mobile Phone LCD TV market. More Chinese brands are surfacing ~40% of WW ~35% of WW 31% 29% 29% Others Others 3% 2% 3% T
Slide 19: China IC Market Drives Foundry Growth
China IC Market Drives Foundry Growth Total China IC Market & Local Brands & Design Local foundries Revenue (US$bn) Local foundries Local design 5 Local brands* Local design 18 2016E Total China IC market 71 153 2.2 Local brands 4.2 2008 27.0 79.2 *Including local system companies China Smartphone U
Slide 20: Agenda: Strategies for Profitable Growth
Introduction SMIC Performance China Semiconductor Opportunity Strategies for Profitable Growth Concluding Remarks SMIC Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 20 SMIC shall not be respo
Slide 21: Executing Three Prongs for Sustainable Profitability & Growth
Executing Three Prongs for Sustainable Profitability & Growth Fully utilize Fully utilize existing assets existing assets Differentiate and diversify technology portfolio to address broad market needs and profitable areas of growth Advance technology in preparation for the migration of the applicati
Slide 22: Technology Migration on Application
Technology Migration on Application 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 0.11µm BSI 12” Interposer Process Technology 0.13µm 0.13µm 0.13µm 0.13µm FSI / BSI
Slide 23: Recent Differentiated Technology Roll out
Recent Differentiated Technology Roll out 38nm • In risk production By continuing to roll out NAND • Mobile code storage new technologies, we are increasing our addressable • In mass production market and gaining new 55nm e-Flash • Both Overseas and Chinese market share • In qualification Worldwide
Slide 24: Investments in Innovation and Performance
Investments in Innovation and Performance R&D Expense vs Sales R&D Expense vs Sales (US$mm) 15% Q1: 14% 11% 10% 11% 11% 7% 318 237 191 194 190 145 Q1:108 2011 2012 2013 2014 2015 2016 2017 Accumulative Number of Design IP enabled Wafer Shipments Granted Patents vs Total Shipments (000, 8’ equivalent
Slide 25: Strategic M&A: LFoundry
Strategic M&A: LFoundry Cost Effective Beneficial/Strategic • SMIC acquired 70% stake in • LF capacity of 40K/mo, increases our LFoundry for a consideration of 339K/mo capacity by 11.8% (based on Q2’16 49 million EUR monthly capacity) • Entry into auto IC market • Access to excellent CIS/BSI technol
Slide 26: Agenda: Concluding Remarks
Introduction SMIC Performance China Semiconductor Opportunity Strategies for Profitable Growth Concluding Remarks SMIC 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 respo
Slide 27: Concluding Remarks
Concluding Remarks OPPORTUNITIES • China semiconductor ecosystem strengthening • Current customers’ IC market share gain • Room to grow our foundry market share • New customers & technology • New markets to penetrate • IOT rising Strong • M&A Execution Financial Channels • 2016 High utilizations • 2
Slide 28: Thank You
Thank You Contact us: ir@smics.com SMIC Presentation All copyrights and IP belong to SMIC. For reference only and may not be copied or distributed without written permission from SMIC. 28 SMIC shall not be responsible for any party’s reliance on these materials.