China's largest contract chip maker, Semiconductor Manufacturing International (SMIC), reported an eighth consecutive quarterly loss Thursday but said it hopes to become profitable late this year.
Revenue in the January to March quarter fell 46.2 percent from the previous quarter to $146.5 million as wafer shipments dropped by almost half, SMIC said in a statement.
Orders began recovering during the quarter and SMIC may reach profitability late this year or in 2010, Richard Chang, the company's CEO, said in a conference call with analysts.
"We are hopeful that the worst is behind us," Chang said.
SMIC posted a quarterly net loss of $178.4 million, adding 50 percent to the scale of its losses one year earlier and marking a decline from losses of $139.5 million in the previous quarter. Losses exceeded revenue because SMIC booked depreciation expenses of over $200 million related to one of its factories.
SMIC shored up its finances with new credit lines of $240 million from Chinese banks during the quarter, but it remains open to deals with strategic investors who can bring the firm added value, Chang said. The firm will spend up to $150 million this year to expand its 300-millimeter fabrication capacity, he said.
Recovering demand from China and from customers out of inventory have started boosting orders, SMIC said. The firm predicted revenue would rise by about 60 percent in the second quarter.
SMIC's business will recover fastest in communications rather than consumer products or PCs, Chang said. The firm expects a rise in chip orders this year as China rolls out a mobile network based on the domestically developed standard TD-SCDMA (Time Division Synchronous Code Division Multiple Access).