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EXHIBIT INDEX
99.1 Press release of the Company dated July 21, 2000.
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NEWS RELEASE
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MEDIA CONTACTS:
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Chartered Singapore: Chartered Singapore: For Chartered:
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Rita Srinivasan Maggie Tan Barbara Kalkis, Maestro PR
(65) 360.4368 (65) 360.4705 (1) 408.996.9975
[email protected] [email protected] [email protected]
INVESTOR CONTACT:
Larry James Suresh Kumar
(1) 408.941.1110 (65) 360.4060
[email protected] [email protected]
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ALL CURRENCY FIGURES STATED IN THIS REPORT ARE IN US DOLLARS
CHARTERED REPORTS RECORD SECOND-QUARTER 2000 RESULTS
Strong Second-Quarter Performance Due To
Higher Wafer Shipments, Productivity Improvements and Richer Mix
- REVENUES OF $271.4 MILLION, UP 66% FROM 2Q 1999
- EARNINGS PER ADS OF $0.43, UP $0.57 FROM 2Q 1999
EARNINGS PER ORDINARY SHARE OF $0.04, UP $0.05 FROM 2Q 1999
SINGAPORE -- July 21, 2000 -- Chartered Semiconductor Manufacturing (Nasdaq:
CHRT and SGX-ST: CHARTERED) today announced record revenues and net income for
its second-quarter ended June 30, 2000, marking the sixth consecutive quarter of
solid growth and improved operating performance.
"Our strong second-quarter results reflect the accelerated productivity
improvements we have been able to achieve across our fabs and the continued
success of our strategies in the marketplace. We have been able to drive
operational improvements in parallel with our focus on customer and product mix
enrichment," reported Barry Waite, president & CEO of Chartered, summarizing the
results of the quarter.
HIGHLIGHTS OF SECOND-QUARTER PERFORMANCE
- Net revenues grew to $271.4 million for second-quarter 2000, up 66% compared
to $163.9 million in second-quarter 1999. The significant increase in
revenues was due primarily to higher shipments, improved customer and
product mix, and enhanced pricing. Including Chartered's share of its
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minority-owned joint-venture company, net revenues were $299.6 million, up
83% from $164.0 million in the same quarter a year ago.
- Gross profit was $94.8 million, or 34.9% of net revenues, up from $34.8
million, or 21.2% of net revenues, in the same quarter a year ago, driven
primarily by higher revenues and lower unit costs. The second-quarter
results included costs associated with the start-up of Fab 6 and other fab
expansion projects, which were approximately 7% of net revenues.
- Recurring operating expenses, which exclude pre-production fab start-up
costs and stock-based compensation charges, as a percentage of net revenues
were 17.8% compared to 20.6% in second-quarter 1999. General and
administrative (G&A) expenses increased $10.5 million due primarily to
increased staffing and other payroll related expenses. Research and
development (R&D) expense increased by $6.9 million primarily due to
additional investments in next generation technology and modules in support
of our strategy to provide a full suite of process technologies necessary
for enabling system level integration. In second-quarter 2000, Chartered
incurred $5.6 million related to pre-production start-up costs in Fab 6 and
Fab 7.
- Net income of $58.0 million, or 21.4% of net revenues, reflected an
improvement of $71.6 million from negative $13.6 million, or negative 8.3%
of net revenues, in the same quarter a year ago. Higher net interest income
accounted for $12.8 million of this improvement.
- Earnings per American Depositary Share (ADS) and earnings per share (EPS)
were $0.43 and $0.04 respectively on a diluted basis, compared with a loss
of $0.14 and $0.01 respectively in second-quarter 1999. Average diluted ADS
count and ordinary share count increased by 37.3 million and 372.8 million
respectively, primarily due to the initial public offering in October 1999
and the follow-on offering in May 2000.
WAFER SHIPMENTS AND AVERAGE SELLING PRICES
- Shipments in second-quarter 2000 were 226.2 thousand wafers (eight-inch
equivalent), an increase of 45% compared to 156.5 thousand (adjusted to
exclude the terminated print-head business) in second-quarter 1999. High
growth networking and related communications markets accounted for the
majority of this increased demand.
- Average Selling Price (ASP) increased by 19% to $1,200 per wafer in
second-quarter 2000 compared to $1,007 per wafer (adjusted to exclude the
terminated print-head business) in second-quarter 1999. ASP improved as a
result of customer and product mix enrichment and enhanced pricing.
- Capacity utilization was 107% in second-quarter of the year compared to 103%
during the same quarter last year.
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MARKET DYNAMICS
The communications segment continued to be the largest contributor to revenues,
in line with our strategic emphasis on delivering a suite of technologies and
services centered on the needs of communications markets.
REVENUE BREAKDOWN BY MARKET SEGMENT*
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Twelve months ending
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March 31, 2000 June 30, 2000
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Market Segment % of Net revenues % of Net revenues
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Communications 48 52
Computer 30 25
Consumer 14 15
Memory 7 7
Other 1 1
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* Including Chartered's share of its minority-owned joint-venture company
REVENUE BREAKDOWN BY REGION*
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Twelve months ending
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March 31, 2000 June 30, 2000
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Region % of Net revenues % of Net revenues
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America 64 59
Europe 19 24
Asia - Pacific 14 13
Japan 3 4
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* Including Chartered's share of its minority-owned joint-venture company
HIGHLIGHTS OF SECOND-QUARTER ACTIVITIES AND ACHIEVEMENTS
- With accreditation received during the quarter, all of Chartered's
production fabs, excluding the newly operational Fab 6, now have attained
the highly coveted QS-9000 certification. This internationally recognized
standard couples ISO 9000 discipline with more rigorous application of
continuous improvement and defect prevention methodologies.
- Chartered's new fab, Fab 6 started producing revenue wafers in the month of
May 2000, two months ahead of the original schedule. Construction of Fab 7,
a 60,000 wafer per month mega-fab, continued on schedule during the quarter,
with first wafer output planned for mid-2001.
- In May 2000, the eFAB(TM) Alliance, formed by Agilent Technologies Inc.,
Chartered Semiconductor Manufacturing, Lucent Technologies and Motorola
selected RosettaNet to be the beneficiary of their joint work on foundry
e-commerce interfaces. Utilizing this, RosettaNet will
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architect the first open industry standard for secure electronic
communications between foundries and their customers, suppliers and
marketing partners. We believe this arrangement will reinforce Chartered's
leadership in the industry and its partnering strategy to provide flexible
manufacturing solutions for its customers.
- In May 2000, Chartered successfully completed a follow-on global offering of
ordinary shares and ADSs. The Company sold 89.7 million ordinary shares (or
ADS equivalent) raising approximately $566 million, net of expenses. The
funds will be used primarily for capital expenditures. With the proceeds
from this offering, Chartered has strengthened its balance sheet and has
substantial operating flexibility going forward.
"We are pleased with the recent accomplishments of Chartered employees
worldwide. Our market focus and dedication to operational excellence is clearly
visible to our customers and evident in our financial results. As the world's
third largest foundry, we remain focussed on enabling our customers to create
and deliver market-leading solutions," concluded Barry Waite.
OUTLOOK
The company believes that the market for foundry services continues to be strong
in the near term. Moreover, the longer-term outlook remains robust as growing
evidence indicates that the trend toward outsourcing by integrated device
manufacturers and systems OEMs is continuing to increase rapidly and is still in
an early stage. In the first half of 2000, Chartered invested over $410 million
in new capacity to support these growth opportunities and remains on track to
invest $1,050 million this year and $1,500 million next year in capital
expenditures and net equity investments in joint ventures. Our newly
strengthened balance sheet provides substantial flexibility to respond to market
opportunities.
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CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands of US Dollars, except share and per share data)
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Three Months Ended Six Months Ended
June 30, June 30,
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1999 2000 1999 2000
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Net revenue ................................................. $ 163,926 $ 271,382 $ 294,738 $ 509,791
Cost of revenue ............................................. 129,130 176,586 247,257 330,926
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Gross profit ................................................ 34,796 94,796 47,481 178,865
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Operating expenses:
Research and development ................................. 10,874 17,808 22,955 35,114
Fab start-up costs ....................................... -- 5,574 -- 17,242
Sales and marketing ...................................... 10,498 7,676 20,568 16,995
General and administrative ............................... 12,399 22,927 22,701 38,436
Costs incurred on termination of
development program .................................... -- -- 6,500 --
Stock-based compensation ................................. 1,645 732 3,289 1,841
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Total operating expenses ......................... 35,416 54,717 76,013 109,628
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Operating income (loss) ..................................... (620) 40,079 (28,532) 69,237
Equity in loss of CSP(1) .................................... (3,283) -- (5,937) --
Equity in income (loss) of SMP .............................. (6,213) 224 (12,051) (2,028)
Other income ................................................ 329 359 650 2,643
Interest income ............................................. 544 12,969 1,207 20,844
Interest expense ............................................ (4,473) (4,090) (9,094) (7,787)
Exchange gain (loss) ........................................ (455) 2,326 5,065 4,125
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Income (loss) before income taxes ........................... (14,171) 51,867 (48,692) 87,034
Income tax (expense) benefit ................................ 528 (4,242) 172 (8,012)
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Income (loss) before minority interest ...................... (13,643) 47,625 (48,520) 79,022
Minority interest in loss of CSP ............................ -- 10,336 -- 16,756
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Net income (loss) ........................................... $ (13,643) $ 57,961 $ (48,520) $ 95,778
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Net income (loss) per share and ADS
Basic net income (loss) per share ........................... $ (0.01) $ 0.04 $ (0.05) $ 0.07
Diluted net income (loss) per share ......................... (0.01) 0.04 (0.05) 0.07
Basic net income (loss) per ADS ............................. $ (0.14) $ 0.43 $ (0.49) $ 0.73
Diluted net income (loss) per ADS ........................... (0.14) 0.43 (0.49) 0.72
Number of shares (in millions) used in computing:
- basic net income (loss) per share ......................... 985.9 1,334.1 985.8 1,307.0
- diluted net income (loss) per share ....................... 985.9 1,358.7 985.8 1,333.3
Number of ADS (in millions) used in computing:
- basic net income (loss) per ADS ........................... 98.6 133.4 98.6 130.7
- diluted net income (loss) per ADS ......................... 98.6 135.9 98.6 133.3
Other Data:
Wafer shipped (8-inch equivalent, in thousands) ........ 173.5 226.2 327.3 436.4
Depreciation and amortization .......................... $ 77,807 $ 82,275 $ 142,617 $ 153,567
Capital expenditures & net equity
investments in JVs ................................ $ 98,159 $ 223,031 $ 145,031 $ 410,301
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Note (1): The equity accounting method was applied for the investment in CSP in
the period prior to October 1, 1999. From October 1, 1999 forward, CSP was
treated as a consolidated subsidiary.
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CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands of US Dollars)
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As of
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December 31, June 30,
1999 2000
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ASSETS
Cash and cash equivalents ....................................... $ 544,996 $1,005,298
Accounts receivable ............................................. 141,226 146,702
Inventories ..................................................... 33,619 36,038
Other current assets ............................................ 9,946 14,301
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Total current assets .................................. 729,787 1,202,339
Property, plant and equipment, net .............................. 1,282,106 1,561,237
Investment in SMP ............................................... 47,036 65,251
Other non-current assets ........................................ 73,979 49,499
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Total assets .......................................... $2,132,908 $2,878,326
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable ................................................ $ 152,401 $ 101,334
Current installments of obligations under capital leases ........ 5,767 6,199
Current installments of long-term debt .......................... 119,991 148,920
Accrued operating expenses ...................................... 127,147 164,201
Other current liabilities ....................................... 29,919 40,948
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Total current liabilities ............................. 435,225 461,602
Obligations under capital leases, excluding current
installments ............................................... 7,822 4,645
Long-term debt, excluding current installments .................. 423,668 455,998
Other liabilities ............................................... 67,279 55,401
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Total liabilities ..................................... 933,994 977,646
Minority interests .............................................. 57,164 86,406
Shareholders' equity ............................................ 1,141,750 1,814,274
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Total liabilities and shareholders' equity ............ $2,132,908 $2,878,326
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ABOUT CHARTERED
Chartered Semiconductor Manufacturing (Nasdaq: CHRT and SGX-ST: CHARTERED) is
one of the world's top three independent foundries providing wafer fabrication
services. Guided by the tenets of trust, service, partnership, advanced
technology and stability, the Company aims to provide world-class semiconductor
foundry services that enable customers to create and deliver market-leading
system-level solutions. Chartered operates five fabrication facilities that
serve high-growth, technologically advanced applications such as communications
and networking. Headquartered in Singapore, Chartered employs approximately 3400
people at its 11 locations in North America, Asia and Europe.
Chartered is traded in the United States on Nasdaq and in Singapore on the
Singapore Exchange Securities Trading Limited (SGX-ST). The Company reported
1999 net revenues of US $694.3 million.
For more information, visit the company's website, www.charteredsemi.com.
SAFE HARBOR STATEMENT UNDER THE PROVISIONS OF THE UNITED STATES PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This news release contains forward-looking statements, as defined in the safe
harbor provisions of the United States Private Securities Litigation Reform Act
of 1995. These forward-looking statements, including the statements relating to
the initial production of Fab 7, the increased trends in outsourcing by the
Company's customers and the Company's position to take advantage of it, the
Company's continued investment in technology, capacity and skills, the outlook
for longer-term growth in the foundry services market and the appropriateness of
the Company's business model and strategy, reflect the Company's current views
with respect to future events and financial performance, and are subject to
certain risks and uncertainties, which could cause actual results to differ
materially from historical results or those anticipated. For example, delays and
interruptions in the construction or production schedules for our Fab 7 and
changes in the market outlook and customer demands could affect the foregoing
forward-looking statements. Although the Company believes the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that its expectations will be attained. A
description of certain of the risks and uncertainties which could cause actual
results to differ materially from those indicated in the forward-looking
statements can be found in the section captioned "Risk Factors" in the Company's
Annual Report on Form 20-F filed with the U.S. Securities and Exchange
Commission. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
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