UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer Pursuant
to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
For the quarter ended March 31, 2009
Commission File Number 000-27811
CHARTERED SEMICONDUCTOR
MANUFACTURING LTD.
(Exact name of registrant as specified in its charter)
Not Applicable
(Translation of registrants name into English)
Republic of Singapore
(Jurisdiction of incorporation or organization)
60 Woodlands Industrial Park D
Street 2, Singapore 738406
(65) 6362-2838
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form
20-F or Form 40-F.
Form 20-F
þ
Form 40-F
o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):
o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):
o
Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes
o
No
þ
If Yes is marked, indicate below the file number assigned to registrant in connection with Rule
12g3-2(b). Not applicable.
The Company is incorporating by reference the information and exhibits set forth in this Form 6-K
into its registration statements on Form F-3 (Registration No. 333-155774); Form S-8 (Registration
No. 333-89849); Form S-8 (Registration No. 333-63814); Form S-8 (Registration No. 333-63816); Form
S-8 (Registration No. 333-116844) and Form S-8 (Registration No. 333-145081).
CURRENCY OF PRESENTATION AND CERTAIN DEFINED TERMS
In this document, unless otherwise indicated, all references to Chartered, the Company, we,
our and us refer to Chartered Semiconductor Manufacturing Ltd., a limited liability company
formed in the Republic of Singapore, and its subsidiaries. When we refer to Singapore dollars,
S$ and SGD in this document, we are referring to Singapore dollars, the legal currency of
Singapore. When we refer to U.S. dollars, dollars, $, US$ and USD in this document, we
are referring to United States dollars, the legal currency of the United States. When we refer to
Euro in this document, we are referring to Euro, the legal currency of certain member states of
the European Union. When we refer to Yen in this document, we are referring to Japanese Yen, the
legal currency of Japan, and when we refer to GBP in this document, we are referring to Great
British Pound, the legal currency of the United Kingdom.
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
This Quarterly Report contains forward-looking statements, as defined in the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking
statements, including, without limitation, statements relating to our belief that our sources of
liquidity and projected cash flows will be sufficient to meet our expected capital and research
and development expenditures, debt service obligations, investment and liquidity needs for at
least the next twelve months, and our expected capital expenditures for 2009, reflect our 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. Among the factors that could cause actual results to differ materially are
decreased consumer confidence, financial market turmoil and the deteriorating global economic
conditions; the ability to access or renew existing or to obtain additional financing and the
terms thereof; changes in the demands from our major customers; excess inventory, life cycle,
market outlook and trends for specific products; demand and supply outlook in the semiconductor
market; competition from existing foundries and new foundry companies resulting in pricing
pressures; product mix; unforeseen delays, interruptions and performance level of our fabrication
facilities; our progress on leading-edge products; changes in capacity plans, allocation and
process technology mix; unavailability of materials, equipment, manpower and expertise; access to
or delays in technological advances or our development of process technologies; the successful
implementation of our partnership, technology and supply alliances (including our joint
development agreements with IBM and the other joint development partners); the growth rate of
fabless companies; the outsourcing strategy of integrated device manufacturers (IDM) and our
expectation that IDMs will utilize foundry capacity more extensively. Although we believe the
expectations reflected in such forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be attained. In addition to the foregoing
factors, a description of certain other risks and uncertainties which could cause actual results
to differ materially can be found in Item 3. Key Information D. Risk Factors in our 2008
annual report on Form 20-F filed with the U.S. Securities and Exchange Commission. You are
cautioned not to place undue reliance on these forward-looking statements which reflect
managements current analysis of future events. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information, future events or
otherwise.
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
CHARTERED SEMICONDUCTOR MANUFACTURING LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
524,501
|
|
|
$
|
453,921
|
|
Restricted cash
|
|
|
69,560
|
|
|
|
65,127
|
|
Marketable securities
|
|
|
950
|
|
|
|
1,142
|
|
Receivables, less allowances of $2,451 in 2008 and $3,244 in 2009
|
|
|
224,428
|
|
|
|
167,066
|
|
Inventories
|
|
|
189,498
|
|
|
|
165,492
|
|
Other investments
|
|
|
19,634
|
|
|
|
6,622
|
|
Other current assets
|
|
|
19,840
|
|
|
|
32,990
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
1,048,411
|
|
|
|
892,360
|
|
|
|
|
|
|
|
|
|
|
Investment in associated companies
|
|
|
28,924
|
|
|
|
27,097
|
|
Technology licenses and other intangible assets, net
|
|
|
48,178
|
|
|
|
44,085
|
|
Property, plant and equipment, net
|
|
|
2,845,668
|
|
|
|
2,786,851
|
|
Other non-current assets
|
|
|
53,992
|
|
|
|
57,448
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
4,025,173
|
|
|
$
|
3,807,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERENCE SHARES AND TOTAL EQUITY
|
|
|
|
|
|
|
|
|
Payables
|
|
$
|
311,264
|
|
|
$
|
202,972
|
|
Current installments of long-term debt and capital lease obligations
|
|
|
163,232
|
|
|
|
164,413
|
|
Other current liabilities
|
|
|
102,355
|
|
|
|
93,860
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
576,851
|
|
|
|
461,245
|
|
|
|
|
|
|
|
|
|
|
Long-term debt and capital lease obligations, excluding current installments
|
|
|
1,677,228
|
|
|
|
1,685,213
|
|
Other non-current liabilities
|
|
|
61,801
|
|
|
|
64,200
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
2,315,880
|
|
|
|
2,210,658
|
|
|
|
|
|
|
|
|
|
|
Convertible redeemable preference shares
|
|
|
265,879
|
|
|
|
268,451
|
|
|
|
|
|
|
|
|
|
|
Ordinary share capital
|
|
|
2,706,244
|
|
|
|
2,705,198
|
|
Accumulated deficit
|
|
|
(1,208,166
|
)
|
|
|
(1,306,939
|
)
|
Accumulated other comprehensive loss
|
|
|
(54,664
|
)
|
|
|
(54,098
|
)
|
|
|
|
|
|
|
|
Total shareholders equity of Chartered
|
|
|
1,443,414
|
|
|
|
1,344,161
|
|
Noncontrolling interest in CSP
|
|
|
|
|
|
|
(15,429
|
)
|
|
|
|
|
|
|
|
Total equity
|
|
$
|
1,443,414
|
|
|
$
|
1,328,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities, convertible redeemable preference shares and total equity
|
|
$
|
4,025,173
|
|
|
$
|
3,807,841
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
CHARTERED SEMICONDUCTOR MANUFACTURING LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share units and per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
388,230
|
|
|
$
|
243,935
|
|
Cost of revenue
|
|
|
323,628
|
|
|
|
271,407
|
|
|
|
|
|
|
|
|
Gross profit (loss)
|
|
|
64,602
|
|
|
|
(27,472
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenue
|
|
|
5,610
|
|
|
|
1,816
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
45,445
|
|
|
|
48,008
|
|
Sales and marketing
|
|
|
17,592
|
|
|
|
12,843
|
|
General and administrative
|
|
|
10,794
|
|
|
|
10,598
|
|
Other operating expenses, net
|
|
|
2,484
|
|
|
|
2,952
|
|
|
|
|
|
|
|
|
Total operating expenses, net
|
|
|
76,315
|
|
|
|
74,401
|
|
|
|
|
|
|
|
|
|
|
Equity in income (loss) of associated companies, net
|
|
|
9,793
|
|
|
|
(1,630
|
)
|
Other income, net
|
|
|
10,510
|
|
|
|
199
|
|
Interest income
|
|
|
5,057
|
|
|
|
1,160
|
|
Interest expense and amortization of debt discount
|
|
|
(15,634
|
)
|
|
|
(15,062
|
)
|
|
|
|
|
|
|
|
Income (loss) before income tax
|
|
|
3,623
|
|
|
|
(115,390
|
)
|
Income tax expense (benefit)
|
|
|
1,232
|
|
|
|
(1,165
|
)
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
2,391
|
|
|
|
(114,225
|
)
|
Less: Net loss attributable to the noncontrolling interest in CSP
|
|
|
|
|
|
|
15,452
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Chartered
|
|
$
|
2,391
|
|
|
$
|
(98,773
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Accretion to redemption value of convertible redeemable preference shares
|
|
|
2,475
|
|
|
|
2,572
|
|
|
|
|
|
|
|
|
Net loss available to ordinary shareholders of Chartered
|
|
$
|
(84
|
)
|
|
$
|
(101,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per ordinary share*
|
|
|
(0.00
|
)
|
|
|
(0.03
|
)
|
Diluted net loss per ordinary share*
|
|
|
(0.00
|
)
|
|
|
(0.03
|
)
|
Basic net loss per ADS*
|
|
|
(0.00
|
)
|
|
|
(0.26
|
)
|
Diluted net loss per ADS*
|
|
|
(0.00
|
)
|
|
|
(0.26
|
)
|
|
|
|
|
|
|
|
|
|
Number of ordinary shares (in millions) used in computing:*
|
|
|
|
|
|
|
|
|
Basic net loss per ordinary share
|
|
|
3,829.9
|
|
|
|
3,835.3
|
|
Diluted net loss per ordinary share
|
|
|
3,829.9
|
|
|
|
3,835.3
|
|
|
|
|
|
|
|
|
|
|
Number of ADS (in millions) used in computing:*
|
|
|
|
|
|
|
|
|
Basic net loss per ADS
|
|
|
383.0
|
|
|
|
383.5
|
|
Diluted net loss per ADS
|
|
|
383.0
|
|
|
|
383.5
|
|
|
|
|
*
|
|
As adjusted retroactively for the rights offering see Note 4 of the unaudited condensed
consolidated financial statements for more details.
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
CHARTERED SEMICONDUCTOR MANUFACTURING LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
Net income (loss)
|
|
$
|
2,391
|
|
|
$
|
(114,225
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Net unrealized gains on change in cash flow hedging fair values
|
|
|
112
|
|
|
|
437
|
|
Reclassification of cash flow hedging (gains) losses into earnings
|
|
|
141
|
|
|
|
(207
|
)
|
Foreign currency translation
|
|
|
32
|
|
|
|
(198
|
)
|
Unrealized gains (losses) on available-for-sale securities
|
|
|
(1,080
|
)
|
|
|
192
|
|
Reclassification of realized losses on available-for-sale securities into earnings
|
|
|
|
|
|
|
365
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net
|
|
|
(795
|
)
|
|
|
589
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss), net
|
|
|
1,596
|
|
|
|
(113,636
|
)
|
Less: Comprehensive loss attributable to the noncontrolling interest in CSP
|
|
|
|
|
|
|
15,429
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to Chartered
|
|
$
|
1,596
|
|
|
$
|
(98,207
|
)
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
CHARTERED SEMICONDUCTOR MANUFACTURING LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF TOTAL EQUITY
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of Chartered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compre-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
hensive
|
|
Noncontrol-
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
Income
|
|
ling interest
|
|
|
|
|
Ordinary Share Capital
|
|
deficit
|
|
(Loss)
|
|
in CSP
|
|
Total Equity
|
|
|
No
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
Balance at January 1, 2008
|
|
|
2,539,626
|
|
|
|
2,710,006
|
|
|
|
(1,115,587
|
)
|
|
|
(53,270
|
)
|
|
|
|
|
|
|
1,541,149
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
(92,579
|
)
|
|
|
|
|
|
|
|
|
|
|
(92,579
|
)
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,394
|
)
|
|
|
|
|
|
|
(1,394
|
)
|
Accretion to redemption
value of convertible
redeemable preference
shares
|
|
|
|
|
|
|
(10,042
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,042
|
)
|
Issuance of shares
arising from share-based
awards
|
|
|
3,574
|
|
|
|
1,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,871
|
|
Employee share-based
compensation
|
|
|
|
|
|
|
4,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,432
|
|
Non-employee share-based
compensation
|
|
|
|
|
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31,
2008
|
|
|
2,543,200
|
|
|
|
2,706,244
|
|
|
|
(1,208,166
|
)
|
|
|
(54,664
|
)
|
|
|
|
|
|
|
1,443,414
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
(98,773
|
)
|
|
|
|
|
|
|
(15,452
|
)
|
|
|
(114,225
|
)
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
566
|
|
|
|
23
|
|
|
|
589
|
|
Accretion to redemption
value of convertible
redeemable preference
shares
|
|
|
|
|
|
|
(2,572
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,572
|
)
|
Issuance of shares
arising from share-based
awards
|
|
|
1,217
|
|
|
|
189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
189
|
|
Employee share-based
compensation
|
|
|
|
|
|
|
1,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,331
|
|
Non-employee share-based
compensation
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2009
|
|
|
2,544,417
|
|
|
|
2,705,198
|
|
|
|
(1,306,939
|
)
|
|
|
(54,098
|
)
|
|
|
(15,429
|
)
|
|
|
1,328,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
CHARTERED SEMICONDUCTOR MANUFACTURING LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
2,391
|
|
|
$
|
(114,225
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Equity in (income) loss of associated companies, net
|
|
|
(9,793
|
)
|
|
|
1,630
|
|
Cash dividends received from associated companies
|
|
|
8,972
|
|
|
|
|
|
Depreciation and amortization
|
|
|
133,247
|
|
|
|
125,390
|
|
Foreign exchange (gain) loss, net
|
|
|
(165
|
)
|
|
|
1,233
|
|
(Gain) loss on disposal of property, plant and equipment, net
|
|
|
46
|
|
|
|
(202
|
)
|
Others, net
|
|
|
4,385
|
|
|
|
2,999
|
|
Changes in assets and liabilities, net of effects from purchase of a subsidiary in 2008:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
11,138
|
|
|
|
58,796
|
|
Inventories
|
|
|
823
|
|
|
|
24,006
|
|
Other assets
|
|
|
(1,312
|
)
|
|
|
1,000
|
|
Payables and other liabilities
|
|
|
(7,734
|
)
|
|
|
(41,922
|
)
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
141,998
|
|
|
$
|
58,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Payments for property, plant and equipment
|
|
|
(95,498
|
)
|
|
|
(146,718
|
)
|
Payments for technology licenses
|
|
|
(3,986
|
)
|
|
|
(1,364
|
)
|
Purchase of a subsidiary, net of cash acquired of $6,523
|
|
|
(234,602
|
)
|
|
|
|
|
Refund of deposits placed with a vendor
|
|
|
400
|
|
|
|
257
|
|
Proceeds from sale of property, plant, equipment
|
|
|
2,715
|
|
|
|
3,539
|
|
Proceeds from redemption of other investments
|
|
|
30,048
|
|
|
|
5,627
|
|
Others, net
|
|
|
17
|
|
|
|
6
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
$
|
(300,906
|
)
|
|
$
|
(138,653
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Debt
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
230,151
|
|
|
|
89,890
|
|
Repayments
|
|
|
(307,013
|
)
|
|
|
(78,683
|
)
|
Capital lease payments
|
|
|
(1,117
|
)
|
|
|
(1,349
|
)
|
Refund of customer deposits
|
|
|
(5,609
|
)
|
|
|
|
|
Issuance of ordinary shares
|
|
|
584
|
|
|
|
189
|
|
(Increase) decrease in cash restricted for debt repayment
|
|
|
(418
|
)
|
|
|
4,433
|
|
Others, net
|
|
|
|
|
|
|
(321
|
)
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
$
|
(83,422
|
)
|
|
$
|
14,159
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
4,249
|
|
|
|
(4,791
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(238,081
|
)
|
|
|
(70,580
|
)
|
Cash and cash equivalents at the beginning of the period
|
|
|
743,173
|
|
|
|
524,501
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period
|
|
$
|
505,092
|
|
|
$
|
453,921
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
CHARTERED SEMICONDUCTOR MANUFACTURING LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
|
|
The interim condensed consolidated financial statements have been prepared in accordance with
United States of America (U.S.) generally accepted accounting principles (U.S. GAAP) and,
in the opinion of management, contain all adjustments necessary, all of which are of a normal
recurring nature except for the rights offering completed in April 2009 which resulted in
adjustments being made to the Companys share plans and agreements as discussed in Note 2 and
a retroactive adjustment to the net loss per ordinary share and ADS as discussed in Note 4, to
present fairly the financial information included herein. The accompanying interim unaudited
condensed consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and accompanying notes included in the Companys annual
report on Form 20-F for the year ended December 31, 2008.
|
|
|
|
The condensed consolidated balance sheet as of December 31, 2008 and the condensed
consolidated statement of total equity for the year ended December 31, 2008 included herein are
derived from the audited consolidated financial statements in the Companys annual report on
Form 20-F for the year ended December 31, 2008 and as reclassified upon adoption of Statement
of Financial Accounting Standards (SFAS) No. 160 Noncontrolling Interests in Consolidated
Financial Statements An Amendment of ARB No. 51, which requires the presentation of
noncontrolling interests within equity. The condensed consolidated balance sheet as of March
31, 2009, the condensed consolidated statement of total equity for the three months ended March 31,
2009, the condensed consolidated statements of operations,
comprehensive income (loss) and
cash flows for the three months ended March 31, 2008 and March 31, 2009 have not been audited.
|
|
|
|
The interim unaudited condensed consolidated financial statements reflect the accounts of
Chartered Semiconductor Manufacturing Ltd. (Chartered) and its majority-owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated in consolidation.
|
|
|
|
On March 31, 2008, the Company completed the acquisition of 100% of the shares in Hitachi
Semiconductor Singapore Pte. Ltd. from Hitachi, Ltd. and Hitachi Asia Ltd., for a total
consideration of $241,125 which consisted of cash and related direct costs of the acquisition.
In June 2008, the closing working capital price adjustment was finalized as provided for in
the purchase agreement, resulting in a revised purchase consideration of $243,595. Upon
completion of the acquisition, Hitachi Semiconductor Singapore Pte. Ltd. was renamed Chartered
Semiconductor Manufacturing (Tampines) Pte. Ltd. (CST or Fab 3E). The interim condensed
consolidated financial statements for the three months ended March 31, 2008 do not include the
results of Fab 3E.
|
|
|
|
Supplemental pro forma financial information is presented below as if the acquisition of Fab
3E occurred as of the beginning of January 1, 2008. The pro forma information presented below
does not purport to present what the actual results would have been had the acquisition in
fact occurred at January 1, 2008 nor does the information project results for any future
period.
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2008
|
|
|
(In thousands, except per share data)
|
Pro forma net revenue
|
|
$
|
432,574
|
|
Pro forma net income
|
|
|
6,642
|
|
Pro forma
net income available to ordinary shareholders of Chartered
|
|
|
4,167
|
|
Pro forma basic net earnings per ordinary share
|
|
|
0.00
|
|
Pro forma diluted net earnings per ordinary share
|
|
|
0.00
|
|
Pro forma basic net earnings per ADS
|
|
|
0.01
|
|
Pro forma diluted net earnings per ADS
|
|
|
0.01
|
|
|
|
Combined results for the Company and Fab 3E were adjusted for the following in order to
present the pro forma results in the table above:
|
|
|
|
Adjustment to revenue to reflect the lower selling prices under the
manufacturing agreement entered into with Renesas Technology Corp. in connection with
the acquisition;
|
|
|
|
|
Reversal of interest expense relating to a loan from a company related to
Hitachi, Ltd, that was recapitalized as Fab 3E shares in connection with the
acquisition;
|
|
|
|
|
Amortization charges relating to intangible assets acquired;
|
|
|
|
|
Increase in depreciation charges based on the assigned fair values of
property, plant and equipment acquired;
|
|
|
|
|
Adjustments made to reflect the historical financial statements of Fab 3E in
accordance with U.S. GAAP. Prior to
|
8
|
|
|
the acquisition by the Company, the financial
statements of Fab 3E were prepared in accordance with Singapore Financial Reporting
Standards;
|
|
|
|
|
Adjustment to foreign currency translation due to the change in functional
currency from the Singapore dollar to the U.S. dollar; and
|
|
|
|
|
Income tax effects related to the above pro forma adjustments.
|
|
|
The results of Fab 3Es operations have been included in the Companys consolidated statement
of operations from April 1, 2008.
|
|
|
|
Prior to the adoption of SFAS No. 160, none of Chartered Silicon Partners Pte Ltds (CSP)
losses had been allocated to the noncontrolling interest in the consolidated statements of
operations since the first quarter of 2003 onwards as the obligations of the noncontrolling
interest were reduced to zero in that quarter due to cumulative
losses. CSP subsequently reported profits in the first quarter of
2008 and the profits applicable to the noncontrolling interest in CSP
were taken to the consolidated statements of operation until the noncontrolling interests share of losses previously recorded in
the consolidated statements of operations is fully recovered. The
effect of not allocating profits of the noncontrolling interests in
CSP in the first quarter of 2008 resulted in an increase to the net
income attributable to Chartered by $4,193 for the three months ended
March 31, 2008.
|
|
|
|
The cumulative net losses not allocated to the noncontrolling shareholders of CSP according to
their proportionate ownership as of December 31, 2008 is $213,496.
|
|
|
|
SFAS No. 160 became effective for financial statements issued for fiscal years and interim
periods beginning after December 15, 2008. SFAS No. 160 requires that accounting and reporting
for minority interests be recharacterized as noncontrolling interests and classified as a
component of equity. SFAS No. 160 also establishes reporting requirements that provide
sufficient disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners.
|
|
|
|
Supplemental pro forma financial information is presented below as if SFAS No. 160 is not
adopted in the current quarter.
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2009
|
|
|
(In thousands, except per share data)
|
Pro forma net loss attributable to Chartered
|
|
|
114,225
|
|
Pro forma net loss available to ordinary shareholders of Chartered
|
|
|
116,797
|
|
Pro forma basic net loss per ordinary share
|
|
|
0.03
|
|
Pro forma diluted net loss per ordinary share
|
|
|
0.03
|
|
Pro forma basic net loss per ADS
|
|
|
0.30
|
|
Pro forma diluted net loss per ADS
|
|
|
0.30
|
|
|
|
On March 9, 2009, the Company announced a rights offering of approximately 6,869,926,194 new
ordinary shares (Shares), directly or in the form of American Depositary Shares (ADSs).
|
|
|
|
Pursuant to the rights offering:
|
|
|
|
27 new Shares were offered for every 10 Shares held at S$0.07 per rights
share; and
|
|
|
|
|
27 new ADSs were offered for every 10 ADSs held at a price of US$0.46 per
rights ADS.
|
|
|
The rights offering was completed on April 15, 2009 and net proceeds from the rights offering
were approximately $300 million.
|
|
|
|
In connection with this offering, adjustments were made with respect to:
|
|
|
|
the exercise price of, and number of ordinary shares issuable upon exercise
of, outstanding options issued under the 1999 employee share option plan (1999
Option Plan);
|
|
|
|
|
the number of ordinary shares issuable upon vesting of awards issued under
the restricted share unit plan (RSU Plan) and the performance share unit plan (PSU
Plan);
|
|
|
|
|
the conversion price of convertible redeemable preference shares (CRPS);
and
|
|
|
|
|
the strike prices and number of ordinary shares issuable under the call
option with Goldman Sachs International (GS).
|
9
|
|
As a result of the rights offering in March 2009, changes were made on March 18, 2009, being
the modification date, to both the exercise price and the number of outstanding share options
granted under the 1999 Option Plan. The adjustments were made by multiplying each existing
option exercise price by 0.6632 and multiplying the number of outstanding share options by
1.5078. The number of share options granted under the 1999 Option Plan increased by 51,146
options immediately after the modification.
|
|
|
|
The 1999 Option Plan expired on January 28, 2009.
|
|
|
As a result of the rights offering in March 2009, changes were made on March 18, 2009, being
the modification date, to the number of outstanding RSUs granted under the RSU Plan. The
adjustments were made by multiplying the number of outstanding RSUs by 1.5078. The number of
RSUs granted under the RSU Plan increased by 5,468 RSUs immediately after the modification.
|
|
|
As a result of the rights offering in March 2009, changes were made on March 18, 2009, being
the modification date, to the base number of outstanding PSUs granted under the PSU Plan. The
adjustments were made by multiplying the base number of outstanding PSUs by 1.5078. The base
number of outstanding PSUs granted under the PSU Plan increased by 2,234 PSUs immediately
after the modification.
|
|
|
|
The modification to the above share-based compensation plans as a result of the rights
offering in March 2009 did not result in any incremental compensation cost as the fair value
of the modified awards equals the fair value of the original awards immediately before the
modification.
|
|
(d)
|
|
Convertible redeemable preference shares
|
|
|
As of March 31, 2009, there are 28 outstanding CRPS, each with a redemption price of US$10.
Holders of the CRPS may convert the CRPS into new Shares or, subject to certain limitations,
ADSs at a conversion price of $0.8719 per Share at any time before the close of business on
the 7th business day prior to maturity or early redemption. Pursuant to the terms of the
Articles of Association of the Company, such conversion price is required to be adjusted on
account of the rights offering. Based on the number of Shares outstanding on the date of the
rights offering announcement, the number of Shares which the aggregate subscription price of
the rights offering would purchase at the average market price as of the date of the rights
offering announcement and the number of Shares which were issued pursuant to the rights
offering, the adjusted conversion price is US$0.4120 per Share. This adjustment was made
on March 18, 2009, being the modification date.
|
|
|
Pursuant to the provisions of the call option agreement with GS, GS is entitled to purchase up
to 214,800 of new ordinary shares (Options) at US$1.408 per share (Strike Price) and the
Company may terminate the transaction early, in whole or in part, if the closing price of the
Companys ordinary shares is equal to or higher than US$1.76 (equivalent to 125% of the
US$1.408 exercise price termed as the Higher Soft Call Strike Price) on each of any 20
business days in any consecutive 30 business day period. As a result of the rights offering,
the number of Options was adjusted from 214,800 to 323,883, the Strike Price was adjusted from
US$1.408 to US$0.9338, and the Higher Soft Call Strike Price was adjusted from US$1.76 to
US$1.1672 by GS on March 16, 2009.
|
|
|
The preparation of the interim unaudited condensed consolidated financial statements requires
management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure about contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the respective reporting
periods. Significant items subject to judgment and estimate include the amount of income tax
expense, the estimated useful lives and salvage values of long-lived assets, the recoverability of
the carrying value of long-lived assets, other-than-temporary impairment assessments of other
investments, available-for-sale securities and investments in other equity securities, the
realization of deferred income tax assets, the valuation of accounts receivable and inventories,
the determination of normal capacity of the Companys production facilities, the recognition of
revenue, the recognition and measurement of sales credits and returns allowance, the likelihood of
achieving the milestones attached to Government grants, managements projections of achievement of
performance conditions for grants under the performance share units plan over the performance
period, the fair value of share-based employee compensation awards and financial instruments, the
|
10
|
|
amount of asset retirement obligations and costs, and the valuation of net assets acquired
from purchase business combinations. These estimates and assumptions are based on managements
best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing
basis using historical experience and other factors, including the current economic
environment, which management believes to be reasonable under the circumstances. Management
adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit
markets; volatile equity, foreign currency and energy markets; and declines in consumer
spending have combined to increase the uncertainty inherent in such estimates and assumptions.
As future events and their effects cannot be determined with precision, actual results could
differ significantly from these estimates. Changes in those estimates resulting from
continuing changes in the economic environment will be reflected in the financial statements
in future periods.
|
|
|
|
During 2008, the Company revised the estimated useful lives of its twelve-inch process
equipment and machinery from five years to eight years and the related mechanical and
electrical installations from ten years to fifteen years. In addition, the estimated salvage
values of the related process equipment and machinery were reduced to zero. These changes were
made to better reflect the expected pattern of economic benefits from the use of the equipment
and machinery over time based on an analysis of the expected technology lifecycle, historical
usage experience and industry practices. The change in estimated useful lives and residual
values is a change in accounting estimate that was applied prospectively from October 1, 2008.
The impact of this change was a decrease in the Companys net loss by $29,787 and a decrease
in the Companys basic and diluted net loss per ADS by $0.08 for the three months ended March
31, 2009. Basic and diluted net loss per ordinary share for the three months ended March 31,
2009 decreased by $0.01.
|
|
|
|
During 2008, the Company changed the estimated useful lives for certain technology-related
intangible assets classified under Technology licenses in the consolidated balance sheets
from three to five years. The change was made to better reflect the expected pattern of
economic benefits from the use of the intangible assets over time based on an analysis of the
expected future usage of the underlying technology and historical usage experience. The change
in estimated useful lives is a change in accounting estimate that was applied prospectively
from October 1, 2008. The impact of this change was a decrease in the net loss of the Company
by $1,209 for the three months ended March 31, 2009. Basic and diluted net loss per ADS and
ordinary share for the three months ended March 31, 2009 were not affected by the impact of
this change.
|
|
|
|
4.
|
|
Net Earnings (Loss) Per Ordinary Share
|
|
|
Basic net earnings (loss) per ordinary share is computed by deducting from (adding to) net
income (loss) available to ordinary shareholders of Chartered the accretion to redemption
value of the convertible redeemable preference shares and dividing the resulting amount of net
income (loss) available to ordinary shareholders of Chartered by the weighted-average number
of ordinary shares outstanding. Diluted net earnings (loss) per ordinary share is computed
using the weighted-average number of ordinary shares outstanding plus potentially dilutive
securities, which includes the dilutive effect of share options using the treasury stock
method, the dilutive effect of restricted share units, the impact of contingently issuable
share-based awards with performance conditions and the dilutive effect of ordinary shares
issuable upon the assumed conversion of the Companys convertible securities. The accretion
charges on convertible securities are added back to net income available to ordinary
shareholders of Chartered when the related ordinary share equivalents are included in
computing diluted net earnings (loss) per ordinary share.
|
11
|
|
As a result of the rights offering, the weighted average number of ordinary shares and ADS
used in computing basic and diluted net loss per ordinary share and ADS, respectively, were
adjusted to take effect of the bonus element contained within the rights offering as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
Basic and diluted net loss per ordinary share
|
|
|
|
|
|
|
|
|
before adjustment for rights offering
|
|
|
(0.00
|
)
|
|
|
(0.04
|
)
|
retroactive adjustment for rights offering
|
|
|
0.00
|
|
|
|
0.01
|
|
after adjustment for rights offering
|
|
|
(0.00
|
)
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per ADS
|
|
|
|
|
|
|
|
|
before adjustment for rights offering
|
|
|
(0.00
|
)
|
|
|
(0.40
|
)
|
retroactive adjustment for rights offering
|
|
|
0.00
|
|
|
|
0.14
|
|
after adjustment for rights offering
|
|
|
(0.00
|
)
|
|
|
(0.26
|
)
|
|
|
|
|
|
|
|
|
|
Number of ordinary shares (in millions) used in
computing basic and diluted net loss per ordinary
share:
|
|
|
|
|
|
|
|
|
before adjustment for rights offering
|
|
|
2,540.0
|
|
|
|
2,543.6
|
|
retroactive adjustment for rights offering
|
|
|
1,289.9
|
|
|
|
1,291.7
|
|
after adjustment for rights offering
|
|
|
3,829.9
|
|
|
|
3,835.3
|
|
|
|
|
|
|
|
|
|
|
Number of ADS (in millions) used in computing
basic and diluted net loss per ordinary share:
|
|
|
|
|
|
|
|
|
before adjustment for rights offering
|
|
|
254.0
|
|
|
|
254.4
|
|
retroactive adjustment for rights offering
|
|
|
129.0
|
|
|
|
129.1
|
|
after adjustment for rights offering
|
|
|
383.0
|
|
|
|
383.5
|
|
|
|
The Company excluded certain potentially dilutive securities for each period presented from
its diluted net earnings (loss) per ordinary share computation because:
|
|
i.
|
|
The exercise price or conversion price of the securities exceeded the
average fair value of the Companys share price; or
|
|
|
ii.
|
|
The total assumed proceeds under the treasury stock method resulted in
negative incremental shares; or
|
|
|
iii.
|
|
The accretion to redemption value of convertible securities per ordinary
share obtainable on conversion was higher than the basic net earnings per ordinary
share, as adjusted for the effect of any potentially dilutive securities which were
more dilutive than the convertible securities; or
|
|
|
iv.
|
|
The conditions for the vesting of the performance share units were not
expected to be met; or
|
|
|
v.
|
|
The Company has net losses available to ordinary shareholders of Chartered.
|
|
|
The below information, including those of the comparative periods, reflect the effects of the
rights offering.
|
|
|
|
A summary of the excluded potentially dilutive securities is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
Convertible redeemable preference shares
|
|
|
688,029
|
|
|
|
688,029
|
|
Call option with Goldman Sachs International
|
|
|
323,883
|
|
|
|
323,883
|
|
Employee share options
|
|
|
164,253
|
|
|
|
148,206
|
|
Performance share units
|
|
|
3,286
|
|
|
|
6,632
|
|
Restricted share units
|
|
|
5,841
|
|
|
|
16,236
|
|
|
|
As of March 31, 2009, the conversion price of the
convertible redeemable preference shares, the per share exercise
price of the call option with GS and the weighted-average exercise
price of employee stock options outstanding was $0.4120, $0.9338 and
$1.21, respectively, as adjusted for the rights offering.
|
12
|
|
In the first quarter of 2009, to encourage employers to preserve jobs and help Singaporeans
stay employed, the Singapore government introduced the Jobs Credit Scheme (Scheme) in the
2009 Budget. Employers will receive cash grants up to 12% on the first S$2,500 of the
qualifying monthly wages of each employee paid from October 2008 to September 2009 on a
quarterly basis. The condition of the grant is that the employee must continue to be on the
Companys payroll in the following month subsequent to a quarter. Employers will then receive
payments at the end of the subsequent quarter in March, June, September and December 2009.
Such payments have been granted tax exemption by the Singapore government.
|
|
|
|
The Company will recognize the grant at the end of each quarter when there is reasonable
assurance that the condition will be complied with and that the grant will be received. As the
Scheme was only introduced in the first quarter of 2009, the grant relating to qualifying
monthly wages paid from October 2008 to December 2008 was recognized in the first quarter of
2009, together with the grant relating to qualifying monthly wages paid from January 2009 to
March 2009.
|
|
|
|
For the three months ended March 31, 2009, $4,582 was recorded as a reduction of the related
payroll expenses which the Scheme intended to reimburse, of which $2,383 had been received on
March 31, 2009 and the remaining amount is expected to be received in June 2009.
|
|
|
Inventories consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
Raw materials
|
|
$
|
12,509
|
|
|
$
|
10,606
|
|
Work-in-progress
|
|
|
169,002
|
|
|
|
146,431
|
|
Consumable supplies and spares
|
|
|
7,987
|
|
|
|
8,455
|
|
|
|
|
|
|
|
|
|
|
$
|
189,498
|
|
|
$
|
165,492
|
|
|
|
|
|
|
|
|
|
|
The Company has an investment in a private enhanced cash fund (Fund), which is managed by an
external financial institution and consists primarily of corporate debt, mortgage-backed
securities and asset-backed securities. Due to the nature of the securities that the Fund
invests in, the Funds underlying securities have been exposed to adverse market conditions
that have affected the value of the collateral and the liquidity of the Fund. As a result, in
December 2007, the investment manager of the Fund halted demand redemptions and announced its
intention to liquidate the Fund. The investment in the Fund, which was classified as cash
equivalent since the time of placement in 2003, was reclassified to Other investments as of
December 31, 2007. As the redemption of a portion of the Fund is not expected to be within the
next 12 months, $7,393 was reclassified from Other investments to Other non-current assets
as of March 31, 2009.
|
|
|
|
The Company received cash proceeds of $30,048 and $5,627 in redemptions from the Fund for the
three months ended March 31, 2008 and three months ended March 31, 2009, resulting in a
realized loss of $52 and a realized gain of $8 on the redemptions for the three months ended
March 31, 2008 and three months ended March 31, 2009, respectively. The Company recorded an
other-than-temporary impairment loss of $1,037 for the three months ended March 31, 2008. No
other-than-temporary impairment loss was recorded for the Fund for the three months ended
March 31, 2009. As of December 31, 2008 and March 31, 2009, the fair value of the Companys
pro-rata share of the remaining investment in the Fund was $19,634 and $14,015, respectively.
|
|
|
There is no significant change in the liability for unrecognized tax benefits, as provided
under Financial Accounting Standards Board Interpretation (FIN) No. 48, as of March 31, 2009
as compared to December 31, 2008. The Company anticipates that the FIN 48 liabilities recorded
for the Year of Assessment 2003 (fiscal year 2002) amounting to $377 would be reversed out
within the next 12 months as the statute of limitations for the Comptroller of Income Tax to
raise any additional assessment for that tax year will lapse by December 31, 2009.
|
13
|
|
The Company is subject to taxation in Singapore and other foreign tax jurisdictions. A summary
of the tax years that remain
subject to examination in the Companys major tax jurisdictions are:
|
|
|
|
|
|
Fiscal years that remain subject to examination as of
|
Major tax jurisdiction
|
|
March 31, 2009
|
Singapore
|
|
2005 and forward
|
United States of America
|
|
2006 and forward
|
|
|
|
9.
|
|
Long-term Debt and Obligations under Capital Leases
|
|
|
Long-term debt consists of:
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
Floating rate loans:
|
|
|
|
|
|
|
|
|
$653,131 EXIM Guaranteed Loan
|
|
$
|
459,771
|
|
|
$
|
397,876
|
|
$609,733 EXIM Guaranteed Loan
|
|
|
90,463
|
|
|
|
181,692
|
|
Société Générale Term Loan
|
|
|
119,234
|
|
|
|
107,311
|
|
JBIC/SMBC Term Loan (Tranche B)
|
|
|
71,841
|
|
|
|
71,841
|
|
5.645% JBIC/SMBC Term Loan (Tranche A)
|
|
|
71,841
|
|
|
|
71,841
|
|
5.75% senior notes due 2010
|
|
|
373,546
|
|
|
|
373,763
|
|
6.00% amortizing bonds due 2010
|
|
|
20,351
|
|
|
|
15,486
|
|
6.25% senior notes due 2013
|
|
|
298,125
|
|
|
|
298,220
|
|
6.375% senior notes due 2015
|
|
|
247,397
|
|
|
|
247,476
|
|
Others
|
|
|
7,775
|
|
|
|
7,312
|
|
|
|
|
|
|
|
|
|
|
|
1,760,344
|
|
|
|
1,772,818
|
|
Less: Current installments of long-term debt
|
|
|
(157,512
|
)
|
|
|
(157,808
|
)
|
|
|
|
|
|
|
|
Long-term debt, excluding current installments
|
|
$
|
1,602,832
|
|
|
$
|
1,615,010
|
|
|
|
|
|
|
|
|
|
|
Obligations under capital leases:
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
Minimum future lease payments
|
|
$
|
121,497
|
|
|
$
|
115,106
|
|
Amount representing interest at rates of 5.9% to 7.8%
|
|
|
(41,381
|
)
|
|
|
(38,298
|
)
|
|
|
|
|
|
|
|
Present value of minimum future lease payments
|
|
|
80,116
|
|
|
|
76,808
|
|
Less: Current installments
|
|
|
(5,720
|
)
|
|
|
(6,605
|
)
|
|
|
|
|
|
|
|
Obligations under capital leases, excluding current installments
|
|
$
|
74,396
|
|
|
$
|
70,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current installments of:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
157,512
|
|
|
$
|
157,808
|
|
Obligations under capital leases
|
|
|
5,720
|
|
|
|
6,605
|
|
|
|
|
|
|
|
|
|
|
$
|
163,232
|
|
|
$
|
164,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current portion, excluding current installments:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
1,602,832
|
|
|
$
|
1,615,010
|
|
Obligations under capital leases
|
|
|
74,396
|
|
|
|
70,203
|
|
|
|
|
|
|
|
|
|
|
$
|
1,677,228
|
|
|
$
|
1,685,213
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
Interest Rates as of
|
|
|
December 31,
|
|
March 31,
|
|
|
2008
|
|
2009
|
Debt obligations at floating rates
|
|
|
3.25
|
%
|
|
|
1.66
|
%
|
Debt obligations at fixed rates
|
|
|
6.05
|
%
|
|
|
6.05
|
%
|
Obligations under capital leases
|
|
|
7.10
|
%
|
|
|
7.10
|
%
|
|
|
In January 2009, the Company repaid $61,895 of the drawdown from the $653,131 Export-Import
Bank of the United States (EXIM) Guaranteed Loan.
|
|
|
|
In February 2009, the Company made the second drawdown of $91,229 from the first tranche of
the $609,733 EXIM Guaranteed Loan. The remaining amount available for drawdown under this
facility is $428,041.
|
|
|
|
In March 2009, the Company made a principal repayment of $11,923 on tranche A of the $189,871
term loan facility from Société Générale, with Atradius Dutch State Business NV (Atradius)
as the export credit insurer.
|
10.
|
|
Derivative Instruments and Hedging Activities
|
|
|
|
SFAS No. 161 Disclosures about Derivative Instruments and Hedging Activities an amendment of
FASB Statement No. 133 became effective for the financial statements issued for fiscal years
and interim periods beginning after November 15, 2008. SFAS No. 161 requires enhanced
disclosures about a companys derivative activities and how the related hedged items affect a
companys financial position, financial performance and cash flows. To meet the objectives,
SFAS No. 161 requires qualitative disclosures about the Companys objectives and strategies for
using derivative instruments and quantitative disclosures for fair value amounts of gains and
losses associated with derivative instruments.
|
|
|
|
The Companys exposure to financial market risks is derived primarily from changes in interest
rates and foreign exchange rates. The Company assesses interest rate cash flow risk and
currency exchange cash flow risk by identifying and monitoring changes in interest rate or
currency exchange rate exposures that may adversely impact expected future cash flows and by
evaluating hedging opportunities. To manage interest rate risk, the Company may utilize
interest rate derivative instruments to modify the interest characteristics of its outstanding
debts. To protect against volatility of future cash flows caused by changes in exchange rates,
the Company may use forward exchange contracts, currency options and currency swap instruments
for forecasted transactions such as operating expenses and capital purchases.
|
|
|
|
The Company is exposed to credit risk and market risk by using derivative instruments to hedge
exposures of changes in foreign currency rates and interest rates. Credit risk is the failure
of the counterparty to perform under the terms of the derivative contract. When the fair value
of a derivative contract is positive, the counterparty owes the Company, which creates credit
risk for the Company. When the fair value of a derivative contract is negative, the Company
owes the counterparty and, therefore, is not exposed to credit risk. The Company anticipates,
however, that counterparties will be able to fully satisfy their obligations under the
contracts. The Company does not obtain collateral or other security to support financial
instruments subject to credit risk but monitors the credit standing of counterparties.
|
|
|
|
Market risk is the adverse effect on the value of a financial instrument that results from a
change in interest rates or currency exchange rates. The market risk associated with interest
rate contracts is managed by establishing and monitoring parameters that limit the types and
degree of market risk that may be undertaken.
|
|
|
|
The amounts related to derivative instruments which are subject to credit risk are generally
limited to the amounts, if any, by which a counterpartys obligations exceed the obligations of
the Company with that counterparty.
|
|
|
|
On the date a derivative contract is entered into, the Company will consider if the derivative
instrument is part of a hedging relationship. Once a hedging relationship is established, the
Company designates the derivative as either a hedge of the fair value of a recognized asset or
liability or of an unrecognized firm commitment (fair value hedge), a hedge of a forecasted
transaction or of the variability of cash flows to be received or paid related to a recognized
asset or liability (cash flow hedge), or a foreign currency fair value or cash flow hedge
(foreign currency hedge). The Company formally documents all relationships between hedging
instruments and hedged items, as well as its risk management objective and strategy for
undertaking various hedge transactions, at the hedges inception. This process includes linking
all derivatives that are designated as fair value, cash flow, or foreign currency hedges to
specific assets and liabilities on the balance sheet or to specific firm commitments or
forecasted transactions. The Company also formally assesses, both at the hedges inception and
on an ongoing basis, whether the derivatives that are used in hedging transactions are highly
effective in offsetting changes in fair values or cash flows of hedged items.
|
|
|
|
Changes in the fair value of derivatives that are highly effective and that are designated and
qualify as fair value hedges are recorded in earnings, along with the loss or gain on the
hedged assets or liabilities or unrecognized firm commitment of the hedged item that are
attributable to the hedged risks. Changes in the fair value of derivatives that are highly
effective and that are designated and qualify as cash flow hedges are recorded in other
comprehensive income (loss) until earnings are affected by the variability in cash flows of the
designated hedged items. Changes in the fair value of derivatives that are highly effective as
hedges and that are designated
|
15
|
|
and qualify as foreign currency hedges are recorded in either earnings or other comprehensive
income (loss), depending on whether the hedge transaction is a fair-value hedge or a cash flow
hedge. Changes in the fair value of derivative instruments that are not designated as part of a
hedging relationship are reported in current period earnings.
|
|
|
|
The Company discontinues hedge accounting prospectively when it determines that a derivative is
no longer effective in offsetting changes in the fair value or cash flows of the hedged item,
the derivative expires or is sold, terminated, or exercised, the derivative is de-designated as
a hedging instrument because it is unlikely that a forecasted transaction will occur, a hedged
firm commitment no longer meets the definition of a firm commitment, or management determines
that designation of the derivative as a hedging instrument is no longer appropriate. When hedge
accounting is discontinued because it is determined that the derivative no longer qualifies as
an effective fair-value hedge, the Company no longer adjusts the hedged asset or liability for
changes in fair value. The adjustment of the carrying amount of the hedged asset or liability
is accounted for in the same manner as other components of the carrying amount of that asset or
liability. When hedge accounting is discontinued because the hedged item no longer meets the
definition of a firm commitment, the Company removes any asset or liability that was recorded
pursuant to recognition of the firm commitment from the balance sheet and recognizes any gain
or loss in earnings. When hedge accounting is discontinued because it is probable that a
forecasted transaction will not occur, gains and losses that were accumulated in other
comprehensive income (loss) are recognized immediately in earnings. In all situations in which
hedge accounting is discontinued, the Company continues to carry the derivative at its fair
value on the balance sheet, and recognizes any changes in its fair value in earnings.
|
|
|
|
The Company uses foreign currency forward contracts to manage identified foreign currency risks
resulting from its foreign currency purchase contracts or relating to groups of forecasted
foreign currency denominated payments. Most of these foreign currency forward contracts are
formally designated as foreign currency cash flow hedges which match the terms of the individual
foreign currency exposures. As a result, any ineffectiveness of the Companys hedges is
negligible. The maximum tenure for these transactions is 18 months. Amounts included in other
comprehensive income (loss) related to hedges of foreign currency purchase contracts are
reclassified into earnings (Cost of revenue) upon the commencement of
depreciation of the asset related to the purchase contracts over the remaining useful life of
the asset.
|
|
|
|
There are certain foreign currency forward contracts and embedded foreign currency derivatives
in purchase contracts which are not formally designated as hedges. These certain foreign
currency forward contracts relate to groups of forecasted foreign currency denominated payments
and a portion of the proceeds of the rights offerings which are primarily denominated in
Singapore dollars. While the Company expects the forward contracts which have not been formally
designated as hedges to be effective in hedging the variability in cash flows resulting from
changes in foreign exchange rates, it does not believe it is practicable to formally document
the hedging relationship and link the derivatives to specific forecasted transactions. The
embedded foreign currency derivatives are in purchase contracts for which payments are
denominated in currencies other than the functional currency or the local currency of the
parties to the contracts or, in some cases, their parent company where the parent company
provides the majority of resources required under the contract on behalf of the subsidiary who
is a party to the contract. Gains and losses on these certain foreign currency forward
contracts and embedded foreign currency derivatives in purchase contracts are included in
Other operating expenses, net. The Company does not have any fair value hedges as of March
31, 2009.
|
16
|
|
|
|
|
The table below provides information about the Companys derivatives instruments as of March
31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Instrument
|
|
Notional
|
|
Average
|
|
|
as of March 31, 2009
|
|
Amount
|
|
Rate/Price
|
|
Maturity
|
Forward Contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
(Receive Yen/Pay US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
Yen Forward Contracts
|
|
|
939,021
|
|
|
95.2113/USD
|
|
|
2009
|
|
(Receive S$/Pay US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
SGD Forward Contracts
|
|
|
7,595
|
|
|
1.5191/USD
|
|
|
2009
|
|
(Receive US$/Pay S$)
|
|
|
|
|
|
|
|
|
|
|
|
|
USD Forward Contracts *
|
|
|
181,611
|
|
|
1.5142/USD
|
|
|
2009
|
|
(Receive GBP/Pay US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP Forward Contracts
|
|
|
195
|
|
|
1.4265/USD
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Embedded derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominated in Yen
|
|
|
285,075
|
|
|
|
|
|
|
|
|
Denominated in Euro
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
*
|
|
In March 2009, the Company entered into forward foreign currency agreements to manage
the foreign currency risk relating to a portion of the proceeds of the rights offering
which are primarily denominated in Singapore dollars.
|
|
|
|
|
|
The following table presents the fair values and locations of derivative instruments recorded
in the balance sheet as of March 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value of Derivative Instruments
|
|
|
|
Assets Derivatives
|
|
|
Liabilities Derivatives
|
|
|
|
Balance Sheet
|
|
|
|
|
|
Balance Sheet
|
|
|
|
As of March 31, 2009
|
|
Location
|
|
Fair Value
|
|
|
Location
|
|
Fair Value
|
|
Derivatives designated as hedging
instruments under SFAS No. 133
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign exchange contracts
|
|
Other current assets
|
|
$
|
|
|
|
Other current liabilities
|
|
$
|
370
|
|
Total derivatives designated as
hedging instruments under SFAS No. 133
|
|
|
|
$
|
|
|
|
|
|
$
|
370
|
|
Derivatives not designated as hedging
instruments under SFAS No. 133
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign exchange contracts
|
|
Other current assets
|
|
$
|
1,084
|
|
|
Other current liabilities
|
|
$
|
52
|
|
Other contracts
|
|
Other current assets
|
|
|
92
|
|
|
Other current liabilities
|
|
|
80
|
|
Total derivatives not designated as
hedging instruments under SFAS No. 133
|
|
|
|
$
|
1,176
|
|
|
|
|
$
|
132
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivatives
|
|
|
|
$
|
1,176
|
|
|
|
|
$
|
502
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
|
|
The following table presents the effect of derivative instruments on other comprehensive loss
(OCI) and results of operations for the three months ended March 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Effect of Derivative Instruments on the Unaudited Condensed Consolidated Statement of Operations
|
|
for the Three Months Ended March 31, 2009
|
|
|
|
Amount of Gain
|
|
|
|
|
Amount of Gain
|
|
|
|
|
|
|
|
|
(Loss)
|
|
|
Location of Gain
|
|
(Loss)
|
|
|
Location of
|
|
Amount of
|
|
|
|
Recognized in
|
|
|
(Loss)
|
|
Reclassified
|
|
|
Gain (Loss)
|
|
Gain (Loss)
|
|
|
|
Accumulated
|
|
|
Reclassified from
|
|
from
|
|
|
Recognized in
|
|
Recognized in
|
|
|
|
OCI on
|
|
|
Accumulated
|
|
Accumulated
|
|
|
Income on
|
|
Income on
|
|
|
|
Derivative
|
|
|
OCI into Income
|
|
OCI into Income
|
|
|
Derivative
|
|
Derivative
|
|
|
|
(Effective
|
|
|
(Effective
|
|
(Effective
|
|
|
(Ineffective
|
|
(Ineffective
|
|
|
|
Portion)
|
|
|
Portion)
|
|
Portion)
|
|
|
Portion)
|
|
Portion)
|
|
Derivatives
Designated as
Hedging Instruments
under SFAS No. 133
Cash Flow Hedging
Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign
exchange contracts
|
|
$
|
(370
|
)
|
|
Cost of revenue
|
|
$
|
207
|
|
|
Other operating expenses, net
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(370
|
)
|
|
|
|
$
|
207
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location of Gain (Loss)
|
|
Amount of Gain (Loss)
|
|
|
|
Recognized in Income on
|
|
Recognized in Income on
|
|
|
|
Derivative
|
|
Derivative
|
|
Derivatives Not Designated as Hedging Instruments under SFAS No.
133
|
|
|
|
|
|
|
|
|
Forward foreign exchange contracts
|
|
Other operating expenses, net
|
|
$
|
1,032
|
|
Other contracts
|
|
Other operating expenses, net
|
|
|
12
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
1,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of accumulated other comprehensive loss related to derivative and hedging
activities consist of the following:
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2009
|
|
Beginning
|
|
$
|
(1,593
|
)
|
Reclassification of cash flow hedging gains into earnings
|
|
|
(207
|
)
|
Net unrealized gains on change in cash flow hedging derivative fair values
|
|
|
437
|
|
|
|
|
|
Ending
|
|
$
|
(1,363
|
)
|
|
|
|
|
|
|
|
11.
|
|
Fair Value of Financial Instruments
|
|
|
In 2008, the Company adopted SFAS No. 157, except for certain non-financial assets and
non-financial liabilities that are not recorded at fair value on a recurring basis as
described in FASB Staff Position (FSP) SFAS No. 157-2. The Company adopted SFAS No. 157 for
these non-financial assets and non-financial liabilities in 2009.
|
|
|
|
The adoption of SFAS No. 157 and its related FSPs did not have a material impact on the
Companys consolidated financial statements.
|
|
|
|
The following table presents the Companys financial assets and financial liabilities measured
at fair value on a recurring basis as of March 31, 2009 and the amounts as they correspond to
the respective level within the fair value hierarchy established by SFAS No. 157.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of March 31, 2009
|
|
|
|
|
|
|
Quoted Prices
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
|
|
|
|
|
|
|
|
Markets
|
|
|
|
|
|
|
|
|
|
|
Identical
|
|
Significant
|
|
Significant
|
|
|
|
|
|
|
Assets
|
|
Observable
|
|
Unobservable
|
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
$
|
1,142
|
|
|
$
|
1,142
|
|
|
$
|
|
|
|
$
|
|
|
Forward foreign exchange contracts
|
|
|
1,084
|
|
|
|
|
|
|
|
|
|
|
|
1,084
|
|
Embedded derivatives
|
|
|
92
|
|
|
|
|
|
|
|
|
|
|
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign exchange contracts
|
|
$
|
422
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
422
|
|
Embedded derivatives
|
|
|
80
|
|
|
|
|
|
|
|
|
|
|
|
80
|
|
|
|
Marketable securities are recorded at fair value, which is based on quoted prices in active
markets for identical assets.
|
18
|
|
The fair values of forward foreign exchange contracts are determined using quantitative
models, which use multiple market inputs including interest rates, prices and maturity dates
to generate pricing curves, which are used to value the positions. The market inputs are
generally actively quoted and can be validated through external sources, including brokers.
For forward foreign exchange contract asset and liability positions with maturity dates which
fall between the dates of quoted prices, interpolation of rate or maturity scenarios are used
in determining fair values.
|
|
|
|
The fair values of embedded derivatives are determined in a similar manner as forward foreign
exchange contracts, except that the Company makes certain assumptions about the maturity dates
of such embedded derivatives as maturity dates are generally not included in the host
contracts.
|
|
|
|
The table below presents a reconciliation for all assets and liabilities measured at fair
value on a recurring basis using significant unobservable inputs (Level 3) during the three
months ended March 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements for the Three Months Ended
|
|
|
|
March 31, 2009
|
|
|
|
|
|
|
|
Forward
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
|
|
|
Embedded
|
|
|
Exchange
|
|
|
|
|
|
|
derivatives
|
|
|
Contracts (Net)
|
|
|
Total
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2009:
|
|
$
|
(469
|
)
|
|
$
|
(36
|
)
|
|
$
|
(505
|
)
|
Total gain (losses)
(realized/unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings
(other operating
expenses, net)
|
|
|
12
|
|
|
|
1,032
|
|
|
|
1,044
|
|
Included in other
comprehensive income
|
|
|
|
|
|
|
(370
|
)
|
|
|
(370
|
)
|
Purchases, issuances,
and settlement (net)
|
|
|
469
|
|
|
|
36
|
|
|
|
505
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2009:
|
|
$
|
12
|
|
|
$
|
662
|
|
|
$
|
674
|
|
|
|
|
|
|
|
|
|
|
|
Amount of total gains or
losses for the period
included in earnings
attributable to the
change in unrealized
gains (losses) relating
to assets/liabilities
still held at reporting
date
|
|
$
|
12
|
|
|
$
|
1,032
|
|
|
$
|
1,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There are no assets or liabilities measured at fair value on a non-recurring basis as of March
31, 2009.
|
|
|
|
12.
|
|
Recently Issued Accounting Pronouncements Not Yet Adopted
|
|
|
In April 2009, the Financial Accounting Standards Board
(FASB) issued FSP FAS No. 115-2 and FAS No. 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, which is
intended to provide greater clarity to investors about the credit and noncredit components of
an other-than-temporary impairment (OTTI) event and to more effectively communicate when an
OTTI event has occurred. This FSP amends the OTTI guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and disclosure of OTTI on
debt and equity securities in the financial statements. This FSP does not amend existing
recognition and measurement guidance related to OTTI of equity securities. This FSP will be
applied prospectively and retrospective application will not be permitted. This FSP will be
effective for the Company for interim and annual periods ending after June 15, 2009, and its
adoption is not expected to have a material impact on the Companys consolidated financial
statements.
|
|
|
|
In April 2009, the FASB issued FSP FAS No. 157-4, Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly. FSP FAS No. 157-4 provides additional guidance for
estimating fair value in accordance with FAS No. 157, Fair Value Measurements, when the
volume and level of activity for the asset or liability have significantly decreased. This FSP
also includes guidance on identifying circumstances that indicate a transaction is not
orderly. This FSP will be applied prospectively and retrospective application will not be
permitted. This FSP will be effective for the Company for interim and annual periods ending
after June 15, 2009, and its adoption is not expected to have a material impact on the
Companys consolidated financial statements.
|
|
|
|
In April 2009, the FASB issued FSP FAS No. 107-1 and Accounting Principles Board Opinion
(APB) 28-1, Interim Disclosures about Fair Value of Financial Instruments, which will
amend SFAS No. 107, Disclosures about Fair Value of Financial Instruments. This FSP will
require an entity to provide disclosures about the fair value of financial instruments in
interim financial information. The FSP would apply to all financial instruments within the
scope of SFAS No. 107 and will require entities to disclose the method(s) and significant
assumptions used to estimate the fair value of financial instruments, in both interim
financial statements as well as annual financial statements. This FSP will be effective for
the Company for interim and annual periods ending after June 15, 2009, and its adoption is not
expected to have a material impact on the Companys consolidated financial statements.
|
19
|
|
On January 30, 2009, the Company announced that as a result of further decline in the
utilization rate of manufacturing assets into the first quarter of 2009 and lack of visibility
in the end markets, the Company would be reducing its workforce by approximately 500 people,
or about 7% of its total employment.
|
|
|
|
The workforce re-sizing exercise was completed in the first quarter of 2009. Total costs
incurred in the first quarter of 2009 for the employee termination benefits as a result of the
workforce re-sizing were $5,865. These costs were recognized as other operating expenses,
net in the consolidated statement of operations.
|
|
|
On April 30, 2009, an Extraordinary General Meeting of shareholders was held and a ten for
one share consolidation was approved. The purpose of the share consolidation is to help
reduce certain fixed costs and volatility in the trading of the Companys shares on the
Singapore Exchange Securities Trading Limited, as well as to mitigate the risks of the Company
being delisted from the Nasdaq Global Select Market on account of the trading price of the
ADSs falling below US$1.00 over a sustained period of time.
|
20
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
The following table sets forth certain operating data as a percentage of net revenue for the
periods indicated:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
Consolidated Statements of Operations data:
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Cost of revenue
|
|
|
83.4
|
|
|
|
111.3
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss)
|
|
|
16.6
|
|
|
|
(11.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenue
|
|
|
1.4
|
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
11.7
|
|
|
|
19.7
|
|
Sales and marketing
|
|
|
4.5
|
|
|
|
5.3
|
|
General and administrative
|
|
|
2.8
|
|
|
|
4.3
|
|
Other operating expenses, net
|
|
|
0.6
|
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses, net
|
|
|
19.6
|
|
|
|
30.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in income (loss) of associated companies, net
|
|
|
2.5
|
|
|
|
(0.6
|
)
|
Other income, net
|
|
|
2.7
|
|
|
|
0.1
|
|
Interest income
|
|
|
1.3
|
|
|
|
0.5
|
|
Interest expense and amortization of debt discount
|
|
|
(4.0
|
)
|
|
|
(6.2
|
)
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax
|
|
|
0.9
|
|
|
|
(47.3
|
)
|
Income tax expense (benefit)
|
|
|
0.3
|
|
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
0.6
|
%
|
|
|
(46.8
|
)%
|
|
|
|
|
|
|
|
|
|
Less: Net loss attributable to the noncontrolling interest in CSP
|
|
|
|
|
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Chartered
|
|
|
0.6
|
|
|
|
(40.5
|
)
|
Less: Accretion to redemption value of convertible redeemable preference shares
|
|
|
0.6
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
Net loss available to ordinary shareholders of Chartered
|
|
|
(0.0)
|
%
|
|
|
(41.5)
|
%
|
The following table sets forth a breakdown of revenue by market sector for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
Communications
|
|
|
48
|
%
|
|
|
48
|
%
|
Computer
|
|
|
16
|
|
|
|
8
|
|
Consumer
|
|
|
33
|
|
|
|
37
|
|
Other
|
|
|
3
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
The following table sets forth a breakdown of revenue by geographical region for the periods
indicated:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
Americas
|
|
|
68
|
%
|
|
|
54
|
%
|
Europe
|
|
|
9
|
|
|
|
8
|
|
Asia-Pacific
|
|
|
23
|
|
|
|
23
|
|
Japan
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
21
The following table sets forth a breakdown of revenue by technology (micron) for the periods
indicated:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
0.045 and below
|
|
|
|
%
|
|
|
3
|
%
|
Up to 0.065
|
|
|
11
|
|
|
|
22
|
|
Up to 0.09
|
|
|
7
|
|
|
|
1
|
|
Up to 0.13
|
|
|
37
|
|
|
|
39
|
|
Up to 0.15
|
|
|
|
|
|
|
1
|
|
Up to 0.18
|
|
|
10
|
|
|
|
17
|
|
Up to 0.25
|
|
|
15
|
|
|
|
5
|
|
Up to 0.35
|
|
|
12
|
|
|
|
6
|
|
Above 0.35
|
|
|
8
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31, 2008 AND MARCH 31, 2009
Net revenue
We derive revenue primarily from fabricating semiconductor wafers and, to a lesser extent, from
providing associated subcontracted assembly and test services as well as pre-fabrication services
such as masks generation and engineering services. We enter into arrangements with our customers
which typically include some or all of the above deliverables. As a dedicated foundry, our
financial performance, including our revenue, largely depends on a number of factors including
timeliness in introducing technology and manufacturing solutions, ability to enter into
arrangements with diverse customers for high volume production of our wafers, utilization rate of
our capacity, and external factors such as pricing and general semiconductor market conditions and
industry cycles.
Net revenue decreased by 37.2% from $388.2 million in the first quarter of 2008 to $243.9 million
in the first quarter of 2009, due primarily to a significant decline in semiconductor demand
across all sectors. Fab 3E, which was acquired on March 31, 2008, contributed $36.8 million in the
first quarter of 2009. Excluding Fab 3E, revenues in first quarter of 2009 were down by 46.6% from
first quarter of 2008. Total wafer shipments decreased by 45.6% from 424,848 wafers (eight-inch
equivalent) in the first quarter of 2008 to 231,198 wafers (eight-inch equivalent) in the first
quarter of 2009. Average selling price (ASP) increased by 4.0% from $892 per wafer (eight-inch
equivalent) to $928 per wafer (eight-inch equivalent) over the same period, due primarily to a
more favorable product mix arising from higher shipments of 65nm products, partially offset by
lower selling prices.
Revenue from our 0.13um and below technologies represented 55% of our net revenue in the first
quarter of 2008 as compared to 65% of our net revenue in the first quarter of 2009. In terms of
absolute dollars, such revenue decreased by 26% between the first quarters of 2008 and 2009, due
primarily to lower shipments of 90nm to 0.13um products. Revenue from our 65nm and below
technologies increased from 11% of our net revenue in the first quarter of 2008 to 25% of our net
revenue in the first quarter of 2009. Revenue from our technologies above 0.13um up to 0.18um
increased from 10% of our net revenue in first quarter of 2008 to 18% of our net revenue in the
first quarter of 2009, due primarily to the contribution from Fab 3E.
The communications sector was the highest contributor to our revenue for both the first quarters
of 2008 and 2009, representing 48% of our net revenue for both the first quarters of 2008 and
2009. In terms of absolute dollars, such revenue decreased by 37% between the first quarters of
2008 and 2009, due primarily to lower demand for mobile phone handset-related devices, digital
subscriber line (DSL), cards and local area network (LAN), switches, routers, hubs and related
devices. Revenue from the consumer sector increased from 33% of our net revenue in the first
quarter of 2008 to 37% of our net revenue in the first quarter of 2009. Despite the increase in
percentage contribution to total net revenue, in terms of absolute dollars, this is a 30% decrease
from our net revenue in the first quarter of 2008, due primarily to a decrease in demand for video
game devices and set-top boxes, and to a lesser extent, a decrease in demand for audio players and
related devices. Revenue from the computer sector decreased from 16% of our net revenue in the
first quarter of 2008 to 8% of our net revenue in the first quarter of 2009, due primarily to a
decrease in demand for personal computers peripherals, printers and monitors and, to a lesser
extent, a decrease in demand for workstations, personal computers, motherboard devices and central
processing units.
The Americas region was the highest contributor to our revenue in the first quarter of 2008,
representing 68% of our net revenue. It continued to be the highest contributor to our revenue in
the first quarter of 2009, representing 54% of our net revenue. The decrease in our net revenue
from the first quarter of 2008 was due primarily to a decrease in demand for mobile phone
handset-related devices and to a lesser extent, a decrease in demand for workstations, personal
computers, motherboard devices and DSL cards. Revenue contribution from the Asia-Pacific region
remained unchanged at 23% of our net revenue for both the first quarters of 2008 and 2009. In
terms of absolute dollars, revenue from the Asia-Pacific region decreased 37% in the first quarter
of 2009 as compared to the first quarter of 2008, due primarily to the decrease in demand for
personal computers peripherals, printer and monitors and to a lesser extent, a decrease in demand
for optical storages. Revenue from the Japan region contributed 15% of our net revenue for the
first quarter of 2009 while it was immaterial in the first quarter of 2008. This increase in
revenue contribution from the Japan region in the first quarter of 2009 was due primarily to the
contribution from Fab 3E. Revenue from the Europe region remained similar in terms of percentage
contribution to our net revenue at 9% and 8% for the first quarters of 2008 and 2009,
respectively. Despite having similar percentage contribution to total net revenue, in terms of
absolute dollars, there was a 44% decrease from our net revenue in the first quarter of 2008, due
primarily to a decrease in demand for LAN, switches, routers, hubs, audio players and related
devices.
22
Cost of revenue
Cost of revenue includes depreciation expense, attributed overheads, cost of labor and materials,
subcontracted expenses for assembly and test services, mask generation costs and amortization of
certain technology licenses. Generally, a large proportion of our cost of revenue is fixed in
nature, which does not increase or decrease in proportion to any change in our shipments. The unit
cost of a wafer decreases as fixed overhead charges, such as depreciation expense on the facility
and semiconductor manufacturing equipment, are allocated over a larger number of wafers produced.
Cost of revenue decreased by 16.1% from $323.6 million in the first quarter of 2008 to $271.4
million in the first quarter of 2009, due primarily to the decrease in shipments by 45.6% over the
same period, partially offset by costs incurred by Fab 3E. In the fourth quarter of 2008, we
revised the estimated useful lives of our twelve-inch process equipment and machinery from five
years to eight years, and the related mechanical and electrical installations from ten years to
fifteen years. The expected salvage values of the related process equipment and machinery were
reduced to zero to reflect the longer useful lives of this equipment. The change in estimated
useful lives and salvage values is a change in accounting estimate that was applied prospectively
from October 1, 2008. The impact of this change was a reduction to our cost of revenue by $29.8
million for the first quarter of 2009.
Cost per wafer shipped increased by 53.8% from $746 (eight-inch equivalent) in the first quarter
of 2008 to $1,147 (eight-inch equivalent) in the first quarter of 2009, due primarily to lower
production volumes over which fixed costs are allocated, including the impact of significantly
lower utilization of manufacturing assets. We recorded a net charge to earnings of $24.2 million
relating to unallocated overheads due to significantly lower utilization of manufacturing assets
in the first quarter of 2009.
We record grants as a reduction of the expenses that the grants are intended to reimburse. The
impact of such grants recorded as a reduction to our cost of revenue was $0.8 million for both the
first quarters of 2008 and 2009.
Gross profit (loss)
Our gross profit (loss) decreased from a profit of $64.6 million, or 16.6% of our net revenue, in
the first quarter of 2008 to a loss of $27.5 million, or (11.3) % of our net revenue, in the first
quarter of 2009. This was due primarily to lower revenues resulting from lower shipment and higher
cost per wafer resulting from lower production volumes over which fixed costs are allocated,
including the impact of significantly lower utilization of manufacturing assets. The revision in
estimated useful lives of our twelve-inch process equipment and machinery and the related
mechanical and electrical installations which was applied prospectively from October 1, 2008 as
mentioned above reduced our gross loss by $29.8 million in the first quarter of 2009.
Our gross profit (loss) was also impacted by grants of $0.8 million for both the first quarters of
2008 and 2009, which were recorded as a reduction to our cost of revenue.
Other revenue
Other revenue consists primarily of rental income and management fees. Other revenue decreased
from $5.6 million in the first quarter of 2008 to $1.8 million in the first quarter of 2009, due
primarily to lower rental income from renewal of a rental agreement with SMP. The rental charged
to SMP is arrived at based on the terms of the original joint-venture agreement, which is a
function of recovering the cost of the building and facility machinery and equipment over the
period of the joint-venture agreement. The lower rental starting from second quarter 2008 reflects
our recovery of the majority of these costs over the initial 10 years of the joint venture
agreement.
Research and development expenses
Research and development (R&D) expenses consist primarily of our share of expenses related to
joint-development projects with IBM, Infineon, Samsung, ST Microelectronics and Toshiba,
payroll-related costs for R&D personnel, depreciation of R&D equipment and expenses related to the
development of design kits and intellectual property solutions for advanced technologies.
R&D expenses increased by 5.6% from $45.4 million in the first quarter of 2008 to $48.0 million in
the first quarter of 2009. This was due primarily to lower reimbursement of expenses related to
grants and higher cost of development activities related to the advanced 45nm and 32nm technology
nodes. R&D expenses as a percentage of net revenue in the first quarters of 2008 and 2009 was
11.7% and 19.7%, respectively.
23
The impact of grants recorded as a reduction to our R&D expenses was $3.7 million and $1.2 million
in the first quarters of 2008 and 2009, respectively.
Sales and marketing expenses
Sales and marketing expenses consist primarily of payroll-related costs for sales and marketing
personnel, electronic design automation (EDA)-related expenses and costs related to pre-contract
customer design validation activities. EDA-related expenses and costs related to pre-contract
customer design validation activities relate to efforts to attract new customers and expand our
penetration of existing customers.
Sales and marketing expenses decreased by 27.0% from $17.6 million in the first quarter of 2008 to
$12.8 million in the first quarter of 2009, due primarily to lower payroll-related expenses and
lower financial support for pre-contract customer design validation activities. Sales and
marketing expenses as a percentage of net revenue in the first quarters of 2008 and 2009 were 4.5%
and 5.3%, respectively.
In the fourth quarter of 2008, we revised the estimated useful lives of certain technology-related
intangible assets from three to five years. The change was made to better reflect the expected
pattern of economic benefits from the use of the assets over time based on an analysis of
historical usage experience and the expected future usage of the underlying technology. The change
in estimated useful lives is a change in accounting estimate that was applied prospectively from
October 1, 2008. The impact of this change was a reduction to our sales and marketing expenses of
$1.2 million in the first quarter of 2009.
General and administrative expenses
General and administrative (G&A) expenses consist primarily of payroll-related costs for
administrative personnel, external fees such as consultancy, legal, administrative, professional
and regulatory fees, and depreciation of equipment used in G&A activities.
G&A expenses remained essentially flat at $10.8 million and $10.6 million in the first quarters of
2008 and 2009, respectively. G&A expenses as a percentage of net revenue in the first quarters of
2008 and 2009 was 2.8% and 4.3%, respectively.
Other operating expenses, net
Other operating expenses, net, increased from $2.5 million in the first quarter of 2008 to $3.0
million in the first quarter of 2009. The increase in other operating expenses, net, was due
primarily to $5.9 million of costs incurred for the employee termination benefits as a result of
the workforce re-sizing, partially offset by higher foreign exchange gains by $4.7 million and
lower expenses by $1.1 million related to rental property in the first quarter of 2009.
Equity in income (loss) of associated companies, net
Equity in income (loss) of SMP decreased from an income of $9.9 million in the first quarter of
2008 to a loss of $1.7 million in the first quarter of 2009, due primarily to lower revenues
resulting from lower shipments and higher cost per wafer resulting from lower production volume
over which fixed costs are allocated. As with the results of our majority-owned fabs, the equity
in income of SMP can have a material effect on our results of operations. In the first quarter of
2008, the equity in income of SMP was $9.9 million compared to our total income before income tax
of $3.6 million. The equity in loss of SMP was $1.7 million compared to our total loss before
income tax of $115.4 million in the first quarter of 2009.
We have provided the following information on our total business base revenue, which includes our
share of SMP revenue, for the first quarters of 2008 and 2009. Chartereds share of SMP revenue,
and net revenue including Chartereds share of SMP, presented in the following table are non-U.S.
GAAP financial measures. We have included this information because SMP can have a material effect
on our consolidated statements of operations and we believe that it is useful to provide
information on our share of SMP revenue in proportion to our total business base revenue. However,
SMP is a minority-owned joint venture company that is not consolidated under U.S. GAAP. We account
for our 49.0% investment in SMP using the equity method. Under our strategic alliance agreement
with LSI Singapore, the parties do not share SMPs net results in the same ratio as the equity
holdings. Instead, each party is entitled to the gross profits (loss) from sales to the customers
that it directs to SMP, after deducting its share of the overhead costs of SMP. Accordingly, we
account for our share of SMPs net results based on the gross profits (loss) from sales to the
customers that we direct to SMP, after deducting our share of the overhead costs. The following
table provides a reconciliation showing comparable data based on net revenue determined in
accordance with U.S. GAAP, which does not include our share of SMP:
24
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
|
|
(In millions)
|
Net revenue (U.S. GAAP)
|
|
$
|
388.2
|
|
|
$
|
243.9
|
|
Chartereds share of SMP revenue
|
|
$
|
25.9
|
|
|
$
|
9.6
|
|
Net revenue including Chartereds share of SMP
|
|
$
|
414.1
|
|
|
$
|
253.5
|
|
The following table provides information that indicates the effect of SMPs operations on some of
our non-U.S. GAAP performance indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2008
|
|
2009
|
|
|
Excluding
|
|
Including
|
|
Excluding
|
|
Including
|
|
|
Chartereds
|
|
Chartereds
|
|
Chartereds
|
|
Chartereds
|
|
|
Share of SMP
|
|
Share of SMP
|
|
Share of SMP
|
|
Share of SMP
|
Shipments (in thousands)*
|
|
|
424.8
|
|
|
|
457.2
|
|
|
|
231.2
|
|
|
|
241.9
|
|
ASP per wafer
|
|
$
|
892
|
|
|
$
|
885
|
|
|
$
|
928
|
|
|
$
|
927
|
|
|
|
|
Note:
|
|
*
|
|
Eight-inch equivalent wafers
|
In the first quarter of 2007, we acquired a 26.7% equity interest in Gateway Silicon Inc. (GSI).
We account for the investment in GSI under the equity method. The equity in the loss of GSI was
$0.1 million in the first quarter of 2008. We discontinued applying the equity method for the
share of losses in GSI from the first quarter of 2009 as the investment in GSI had been reduced to
zero as of December 31, 2008. If GSI subsequently reports net income, we would resume applying the
equity method only after our share of that net income equals the share of net losses not
recognized during the period the equity method was suspended.
In the second quarter of 2008, we acquired a 36.8% equity interest in Socle Technology Corporation
(Socle). We have accounted for the investment in Socle under the equity method from June 2008
onwards. Socles net operating results are shared between Chartered and Socles shareholders in
the same ratio as the equity holdings. The equity in the income of Socle in the first quarter of
2009 was insignificant.
Other income, net
Other income, net, was a net income of $10.5 million in the first quarter of 2008 compared to a
net income of $0.2 million in the first quarter 2009. The net income in the first quarter of 2008
included the recognition of income of $11.5 million arising from our acceptance of a licensing fee
in connection with a technology licensing agreement by one of our technology partners which was
concluded during the first quarter of 2008. The amount recorded was the present value of $12
million, which we will receive as an offset against future payments due under a related technology
agreement, and is not contingent upon any future performance requirements. The net income in the
first quarter of 2008 also included other-than-temporary impairment losses of $1.0 million on the
Fund. The net income in the first quarter of 2009 included a gain of $0.6 million arising from the
termination of certain warrants held, partially offset by an other-than-temporary impairment loss
of $0.4 million on securities classified as available-for-sale.
Interest income
Interest income decreased by 77.1% from $5.1 million in the first quarter of 2008 to $1.2 million
in the first quarter of 2009, due primarily to lower interest rates and to a lesser extent, lower
average cash balances compared to the first quarter of 2008.
Interest expense and amortization of debt discount
Interest expense and amortization of debt discount decreased by 3.7% from $15.6 million in the
first quarter of 2008 to $15.1 million in the first quarter of 2009, due primarily to lower
interest rates on outstanding floating rate debt, partially offset by higher average outstanding
debt balances and lower interest capitalization associated with capital expenditures related to
our 65nm and below technologies.
25
Income tax expense (benefit)
We currently pay tax on (1) interest income, (2) rental income, (3) sales of wafers using
technologies that do not benefit from preferential tax treatment and (4) other income not
specifically exempted from income tax. In computing the income tax expense for each quarter (other
than the last quarter of a fiscal year), we apply an estimated annual effective tax rate (ETR)
to income (loss) before income tax to derive the income tax expense (benefit) for the quarter. ETR
is calculated as a percentage of the forecast income tax expense for the year over the forecast
income before income tax for the same period.
In the first quarter of 2008, we recorded an income tax expense of $1.2 million on an income
before income tax of $3.6 million. In the first quarter of 2009, we recorded an income tax
benefit of $1.2 million on a loss before income tax of $115.4 million. This income tax benefit was
due primarily to certain deferred tax assets, arising from expected tax losses, for which no
valuation allowance has been provided.
Net loss attributable to the noncontrolling interest in CSP
Net loss attributable to the noncontrolling interest in CSP in the first quarter of 2009 is due to
the adoption of SFAS No. 160 which became effective for financial statements issued for fiscal
years and interim periods beginning after December 15, 2008. Prior to the adoption of SFAS No.
160, none of CSPs losses had been allocated to the noncontrolling interest in the consolidated
statements of operations since the first quarter of 2003 onwards as the obligations of the
noncontrolling interest were reduced to zero in that quarter due to cumulative losses.
Accretion to redemption value of convertible redeemable preference shares
In the third quarter of 2005, 30,000 convertible redeemable preference shares were issued. We
accrete the carrying amounts of the convertible redeemable preference shares to their redemption
values at maturity and record such accretion using the effective interest method over the
remaining period until the maturity date on August 17, 2010. Such accretion adjusts net income
(loss) available to ordinary shareholders of Chartered. Accretion charges were $2.5 million and $2.6 million in
the first quarters of 2008 and 2009, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Current and expected liquidity
As of March 31, 2009, our principal sources of liquidity included $519.0 million in cash and cash
equivalents and restricted cash; and $896.7 million of unutilized banking facilities consisting of
loans and bank credit lines. Included in the $896.7 million of unutilized banking facilities are
$41.7 million of uncommitted banking and credit facilities, $150.0 million related to a revolving
loan facility with Sumitomo Mitsui Banking Corporation (SMBC), which was renewed on July 1, 2008
and will be available until June 30, 2009, and $50.0 million related to a revolving loan facility
with Bank of America (BOA), which is available for three years from April 2007. The remaining
unutilized banking facilities are available for drawdown only for purposes of financing the
purchases of equipment from certain vendors in accordance with designated schedules set forth
under the applicable facility agreements.
The following shows long-term debt outstanding as of December 31, 2008 and March 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
(In thousands)
|
|
Floating rate loans:
|
|
|
|
|
|
|
|
|
$653,131 EXIM Guaranteed Loan
|
|
$
|
459,771
|
|
|
$
|
397,876
|
|
$609,733 EXIM Guaranteed Loan
|
|
|
90,463
|
|
|
|
181,692
|
|
Société Générale Term Loan
|
|
|
119,234
|
|
|
|
107,311
|
|
JBIC/SMBC Term Loan (Tranche B)
|
|
|
71,841
|
|
|
|
71,841
|
|
5.645% JBIC/SMBC Term Loan (Tranche A)
|
|
|
71,841
|
|
|
|
71,841
|
|
5.75% senior notes due 2010
|
|
|
373,546
|
|
|
|
373,763
|
|
6.00% amortizing bonds due 2010
|
|
|
20,351
|
|
|
|
15,486
|
|
6.25% senior notes due 2013
|
|
|
298,125
|
|
|
|
298,220
|
|
6.375% senior notes due 2015
|
|
|
247,397
|
|
|
|
247,476
|
|
Others
|
|
|
7,775
|
|
|
|
7,312
|
|
|
|
|
|
|
|
|
Long-term debt outstanding
|
|
$
|
1,760,344
|
|
|
$
|
1,772,818
|
|
|
|
|
|
|
|
|
In January 2009, we repaid $61.9 million of the drawdown from the $653,131 EXIM Guaranteed Loan.
26
In February 2009, we made the second drawdown of $91.2 million from the first tranche of the
$609,733 EXIM Guaranteed Loan. The remaining amount available for drawdown under this facility is
$428.0 million.
In March 2009, we made a principal repayment of $11.9 million on tranche A of the $189,871 term
loan facility from Société Générale, with Atradius as the export credit insurer.
In the second quarter of 2006, 1,650 out of the originally issued 30,000 preference shares were
converted into ordinary shares. Assuming no further conversion or any redemption of the preference
shares until the maturity date on August 17, 2010, we will redeem, out of funds legally available
for such payment, each remaining preference share at a redemption price equal to $10,000 per
preference share, or a total of $283.5 million.
We have an investment in a Fund, which is managed by an external financial institution. The Fund
consists primarily of corporate debt, mortgage-backed securities and asset-backed securities. Due
to the nature of the securities that the Fund invests in, the Funds underlying securities have
been exposed to adverse market conditions that have affected the value of the collateral and the
liquidity of the Fund. As a result, in December 2007, the investment manager of the Fund halted
demand redemptions and announced its intention to liquidate the Fund. The fair value of the Fund
is assessed by using market prices or, when such prices are not available, using a valuation
approach based on the current investment ratings, valuation parameters and estimates of the
underlying debt and securities, and redemptions of the Fund and the subsequent distribution of
cash. Based on this assessment, we determined that the fair value of the Fund and its underlying
debt and securities approximated the fair values provided by the investment manager of the Fund.
As such, the amounts recorded in our consolidated financial statements are based on the fair
values provided by the investment manager of the Fund. We received cash proceeds of $5.6 million
in further redemptions from the Fund in the first quarter of 2009. The net realized gain on the
redemptions in the first quarter of 2009 was immaterial. As of March 31, 2009, the fair value of
our pro-rata share of our remaining investment in the Fund was $14.0 million. As of March 31,
2009, we had received total redemptions of approximately 81.3% of our pro-rata share of the
investment in the Fund. The investment manager of the Fund stated that its expectation is to have
a further 8% of our pro-rata share of the original investment in the Fund liquidated by December
2009. As the redemption of the remaining portion of the Fund is not expected to be within 12
months, $7.4 million was reclassified from Other investments to Other non-current assets as of
March 31, 2009. If the credit and liquidity issues in the markets relating to our investment and
its underlying securities continue or worsen, we may recognize further losses in the value of our
remaining investment in the Fund.
Working capital, which is calculated as the excess of current assets over current liabilities, was
$471.6 million and $431.1 million as of December 31, 2008 and March 31, 2009, respectively.
On March 9, 2009, we announced a rights offering of approximately 6,869,926,194 new Shares,
directly or in the form of ADSs.
Pursuant to the rights offering:
|
|
|
27 new Shares were offered for every 10 Shares held at S$0.07 per rights share; and
|
|
|
|
|
27 new ADSs were offered for every 10 ADSs held at a price of US$0.46 per rights ADS.
|
The rights offering was completed on April 15, 2009 and net proceeds from the rights offering were
approximately $300 million.
The rights offering strengthened our capital position, and will provide us with additional
liquidity to manage its maturing indebtedness, fund planned and future capital expenditures, and
meet general corporate purposes. The rights offering also improved our debt to equity leverage
ratios and will further support us in executing our technology roadmap as well as long-term
growth strategy. We also believe the strengthened capital position will preserve the confidence
and commitment of our customer base.
Under the underwriting agreement we have with Citigroup Global Markets Singapore Pte. Ltd.,
Deutsche Bank AG, Singapore Branch and Morgan Stanley Asia (Singapore) Pte. Ltd. (Underwriters)
in relation to the rights offering, we have agreed that we will not issue any new ordinary shares
for a period of 180 days from March 11, 2009 without the Underwriters prior consent. This
restriction does not prohibit us from issuing new ordinary shares pursuant to the exercise of
employee share options under the 1999 Option Plan, the vesting of RSUs and PSUs, the conversion of
CRPS or the exercise of the GS Call Option. In addition, this restriction does not apply to any
strategic transaction (or public announcement thereof) involving us or any of our affiliates.
Based on our current level of operations, we believe that our cash on hand, existing working
capital, planned use of existing credit facilities, credit terms with our vendors and projected
cash flows from operations will be sufficient to meet our capital and R&D expenditures, debt
service obligations, investment and current liquidity needs for at
least the next twelve months. In light of the current uncertain
market conditions, we are also taking additional steps to preserve
our cash and liquidity. Depending on the pace of our future growth and technology upgrades and migration, we may require
additional financing from time to time, including for purposes of funding the capital expenditures
for our manufacturing facilities. See the Liquidity and Capital Resources Historic investing
cash flows and capital expenditures section below for more details on our capital expenditures.
We believe in maintaining maximum flexibility when it comes to financing our business. We
regularly evaluate our current and future financing needs and may take advantage of favorable
market conditions to raise additional financing.
27
The crisis in the financial markets and deteriorating economic conditions globally has adversely
impacted many industries, including the semiconductor and foundry industries. It is currently
uncertain how long the downturn will persist and if the situation will worsen in the coming
months. In addition, the volatility in the credit markets has resulted in uncertainty in the
availability of credit on reasonable terms. We cannot predict the timing, strength or duration of
any economic deterioration or subsequent economic recovery, worldwide, or in the foundry industry.
If the current economic or market conditions persist or deteriorate further, our business,
financial condition and results of operations could be materially and adversely affected.
Therefore there can be no assurance that our business will generate and continue to generate
sufficient cash flow to fund our liquidity needs in the future as cash flow generation may be
affected by, among other factors, sales levels, capacity utilization, industry business conditions
as well as global economic conditions.
Moodys Global Credit Research revised our corporate and senior unsecured bond ratings down from
Ba1 to Ba2 in March 2009 but continued to review the rating. The rating was confirmed in April
2009. The revisions in our ratings reflects expectations regarding our financial and competitive
conditions and we cannot assure you that we will not be subject to further credit rating
downgrades, particularly in view of the crisis in the financial markets and the deteriorating
global economy. Our debt agreements do not have triggers in respect of any credit rating
downgrades that would accelerate the maturity of our debt. However, subject to the achievement of
certain production milestones specified in our debt agreements, we may be required to commence
repayment of our debt earlier than the scheduled repayment dates set out in certain of our debt
agreements. These production milestones relate to the production capacity and shipment of a
certain number of wafers over a given time period as specified in the debt agreements. Credit
rating downgrades, depending on their severity, could affect our ability to access or renew
existing financing or to obtain additional financing as we may require from time to time depending
on the pace of our future growth and technology upgrades and migration. Credit rating downgrades
could also affect our ability to access the capital markets in the future on favorable terms, or
at all. As a result our ability to compete effectively in our business relative to competitors
with higher credit ratings could be affected. Furthermore, as a result of the current crisis in
the financial markets and deteriorating global economy, the cost and availability of credit has
been and may continue to be adversely affected by illiquid credit markets and wider credit
spreads. Where additional financing could be obtained, there can be no assurance that such
additional financing will be available on terms satisfactory to us or that such additional
financing will not be dilutive to our shareholders or creditors.
Historic cash flows
The following table sets forth the summary of our cash flows for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
(In thousands)
|
|
Net cash provided by operating activities
|
|
$
|
141,998
|
|
|
$
|
58,705
|
|
Net cash used in investing activities
|
|
$
|
(300,906
|
)
|
|
$
|
(138,653
|
)
|
Net cash provided by (used in) financing activities
|
|
$
|
(83,422
|
)
|
|
$
|
14,159
|
|
Historic operating cash flows
Net cash provided by operating activities was $142.0 million and $58.7 million for the three
months ended March 31, 2008 and 2009, respectively. The $83.3 million decrease in cash flow from
operating activities was due primarily to lower sales in the three months ended March 31, 2009, no
refund of taxes arising from the revocation of the pioneer status of Fab 3 of $48.3 million as
occurred in the three months ended March 31, 2008 and no dividend received in the three months
ended March 31, 2009, partially offset by lower payment of operating expenses, higher grant
receipts and inclusion of CSTs operating cash flow in the three months ended March 31, 2009.
Historic investing cash flows and capital expenditures
Net cash used in investing activities was $300.9 million and $138.7 million for the three months
ended March 31, 2008 and 2009, respectively. Investing activities consisted primarily of capital
expenditures totaling $95.5 million and $146.7 million in the three months ended March 31, 2008
and 2009, respectively. Capital expenditure for the three months ended March 31, 2008 and 2009
were primarily for increasing the capacity for our 65nm and below process geometry technologies.
Investing activities for the three months ended March 31, 2008 also included $234.6 million
related to the purchase of 100 percent of the shares in Hitachi Semiconductor Singapore Pte. Ltd.
for $241.1 million which consisted of cash and related direct costs of the acquisition, less cash
acquired of $6.5 million, funded with existing available cash balances. We also received cash
proceeds of $30.0 million and $5.6 million in further distributions from the Fund for the three
months ended March 31, 2008 and 2009, respectively.
We expect our capital expenditures for 2009 to be approximately $375 million. We expect to fund
this through a combination of existing cash balance, cash flow from operations and use of credit
facilities. Such expenditures will be primarily for increasing the capacity of our 65nm and below
technologies. With the above capital expenditure, Fab 7 is expected to have equipment (installed
or available for installation) that is equivalent to a capacity of 27,000 twelve-inch wafers per
month by December 2009. In March 2009, Fab 7 was equipped with a capacity of 24,000 twelve-inch
wafers per month. We expect Fab 7 to have a total capacity of 45,000 twelve-inch wafers per month covering 0.13um to 45nm technology nodes. The capacity plan
will take several years to complete and depends on market conditions, customer demand, adoption of
next generation technologies and our financial plans and capabilities. The total capital
expenditure is expected to be approximately between $4,200 million to $4,500 million for the planned
capacity of 45,000 twelve-inch wafers per month. As of December 31, 2008 and March 31, 2009, we
have spent an accumulated total of $2,465.8 million and $2,580.4 million, respectively, on
equipment for Fab 7. As of December 31, 2008 and March 31, 2009, we had commitments on contracts
for capital expenditures of $298.9 million and $268.9 million, respectively. We may claim
investment allowances on future qualifying capital expenditure, subject to a minimum level of
investment in approved fixed capital expenditure within the qualifying period.
28
The nature of our industry is such that, in the short-term, we may reduce our capital expenditures
by delaying planned capital expenditures in response to a difficult business environment. However,
the semiconductor market is characterized by rapid technological change and the importance of
economies of scale, which we expect to result in significant capital expenditure requirements.
Factors that may affect our level of future capital expenditures include the degree and the timing
of technological changes within our industry, changes in demand for the use of our equipment and
machinery as a result of changes to our customer base and the level of growth within our industry
as discussed under Item 3. Key Information D. Risk Factors and elsewhere in the Companys
annual report on Form 20-F for the year ended December 31, 2008.
Historic financing cash flows
Net cash used in financing activities was $83.4 million for the three months ended March 31, 2008
as compared to net cash provided by financing activities of $14.2 million for the three months
ended March 31, 2009. Financing activities for the three months ended March 31, 2008 included a
drawdown of $119.2 million from the Société Générale Term Loan facility and $113.1 million from
the JBIC/SMBC Term Loan. We also made principal repayments totaling $270.0 million for the BOA
short-term credit and the revolving loan facilities, and the SMBC revolving loan facility, as well
as loan repayment of $32.4 million for the drawdown from the second tranche of the $653,131 EXIM
Guaranteed Loan.
Financing activities for the three months ended March 31, 2009 included a drawdown of $91.2
million from the first tranche of the $609,733 EXIM Guaranteed Loan. We also made principal
repayments totaling $61.9 million for the $653,131 EXIM Guaranteed Loan and $11.9 million for the
Société Générale Term Loan facility.
The restricted cash relates to cash amounts reserved in a bank account and restricted for the
purpose of semi-annual principal and interest repayments, and commitment fees related to the EXIM
Guaranteed Loan. The decrease in restricted cash of $4.4 million for the three months ended March
31, 2009 was due primarily to lower future interest payments.
INVESTMENT IN SMP
Our investment in SMP as of December 31, 2008 and March 31, 2009 is shown below:
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
(In thousands)
|
|
Cost (net of return of capital)
|
|
$
|
80,936
|
|
|
$
|
80,936
|
|
Share of retained post-formation gains
|
|
|
75,780
|
|
|
|
74,086
|
|
Dividends received
|
|
|
(135,397
|
)
|
|
|
(135,397
|
)
|
|
|
|
|
|
|
|
|
|
$
|
21,319
|
|
|
$
|
19,625
|
|
|
|
|
|
|
|
|
Included in receivables and payables are amounts due from or to SMP:
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
December 31,
|
|
March 31,
|
|
|
2008
|
|
2009
|
|
|
(In thousands)
|
|
Amounts due from SMP
|
|
$
|
12,175
|
|
|
$
|
10,977
|
|
Amounts due to SMP
|
|
$
|
1,140
|
|
|
$
|
147
|
|
29
Summarized unaudited financial information for SMP is shown below:
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
(In thousands)
|
|
Current assets
|
|
$
|
48,079
|
|
|
$
|
43,350
|
|
Property, plant and equipment
|
|
|
20,369
|
|
|
|
19,241
|
|
Other assets
|
|
|
316
|
|
|
|
203
|
|
Current liabilities
|
|
|
(22,489
|
)
|
|
|
(20,239
|
)
|
Other liabilities
|
|
|
(157
|
)
|
|
|
(201
|
)
|
|
|
|
|
|
|
|
Shareholders equity
|
|
$
|
46,118
|
|
|
$
|
42,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2008
|
|
2009
|
|
|
(In thousands)
|
|
Net revenue
|
|
$
|
43,216
|
|
|
$
|
18,596
|
|
Gross profit (loss)
|
|
$
|
10,681
|
|
|
$
|
(1,970
|
)
|
Net income (loss)
|
|
$
|
9,913
|
|
|
$
|
(3,763
|
)
|
30
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our exposure to financial market risks is derived primarily from the changes in interest rates and
foreign exchange rates. To mitigate these risks, we utilize derivative financial instruments and
natural hedging by maintaining foreign currency bank deposits, the application of which is
intended for hedging purposes and not for speculative purposes.
Reference is made to Part I, Item 11, Quantitative and Qualitative Disclosures About Market
Risk, in the Companys annual report on Form 20-F for the year ended December 31, 2008 and to
Note 10, Derivative Instruments and Hedging Activities, Note 11, Fair Values of Financial
Instruments in the Notes to the Unaudited Condensed Consolidated Financial Statements included in
this Form 6-k, for the quarter ended March 31, 2009. Apart from changes in our exposure to
interest rate and foreign exchange risk which are presented in the tables below, there have been
no other material changes to our exposures to market risk as reported in these sections.
Interest rate risk
The tables below provide information about our long-term debt that are sensitive to changes in
interest rates. The table presents principal cash flows and related weighted average interest
rates by expected maturity dates. Weighted average floating rates are based on prevailing floating
interest rates related to the outstanding obligations as of March 31, 2009. There were no
outstanding interest rate contracts as of March 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2009
|
|
|
|
Expected Maturity Date
|
|
|
|
(In thousands, except interest rates)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
|
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
Thereafter
|
|
|
Total
|
|
|
Value
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Floating rate debt (US$)
|
|
$
|
73,818
|
|
|
$
|
165,806
|
|
|
$
|
198,343
|
|
|
$
|
133,488
|
|
|
$
|
104,021
|
|
|
$
|
83,244
|
|
|
$
|
758,720
|
|
|
$
|
758,720
|
|
Weighted average
interest rate
|
|
|
1.656
|
%
|
|
|
1.651
|
%
|
|
|
1.645
|
%
|
|
|
1.671
|
%
|
|
|
1.694
|
%
|
|
|
1.612
|
%
|
|
|
1.655
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate debt
(US$)
|
|
$
|
5,010
|
|
|
$
|
385,476
|
|
|
$
|
14,368
|
|
|
$
|
14,368
|
|
|
$
|
314,368
|
|
|
$
|
278,737
|
|
|
$
|
1,012,327
|
|
|
$
|
770,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
interest rate
|
|
|
6.000
|
%
|
|
|
5.757
|
%
|
|
|
5.645
|
%
|
|
|
5.645
|
%
|
|
|
6.222
|
%
|
|
|
6.300
|
%
|
|
|
6.049
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
78,828
|
|
|
$
|
551,282
|
|
|
$
|
212,711
|
|
|
$
|
147,856
|
|
|
$
|
418,389
|
|
|
$
|
361,981
|
|
|
$
|
1,771,047
|
|
|
$
|
1,529,398
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31, 2008
|
|
|
|
(In thousands)
|
|
|
|
Total
|
|
|
Fair Value
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
Floating rate debt
|
|
$
|
741,309
|
|
|
$
|
741,309
|
|
Fixed rate debt
|
|
|
1,017,192
|
|
|
|
816,544
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,758,501
|
|
|
$
|
1,557,853
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
(1)
|
|
Average interest rates under Total are the weighted average interest rates of long-term
debt outstanding as of March 31, 2009.
|
As of March 31, 2009, 57% and 43% of our interest rate payment obligations on long-term debt are
at fixed rates and floating rates, respectively. We do not have cash flow and earnings exposure
due to market interest rate changes for our fixed rate debt obligations, however we do have cash
flow and earnings exposure due to market interest rate changes for our floating rate debt
obligations. Based on our interest payment obligations as of March 31, 2009, a 0.5% increase in
interest rates would increase our floating rate interest payments by 30.2% annually.
31
Foreign currency risk
The table below provides information about our foreign currency forward contracts and presents the
information in U.S. dollar equivalents.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2009
|
|
|
As of
|
|
|
|
Expected Maturity Date of Notional Amounts
|
|
|
December 31, 2008
|
|
|
|
(In thousands, except exchange rates)
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
|
|
|
|
|
|
|
Fair
|
|
|
|
2009
|
|
|
Thereafter
|
|
|
Total
|
|
|
Value
|
|
|
Total
|
|
|
Value
|
|
FORWARD FOREIGN
EXCHANGE AGREEMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Receive Yen/Pay US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount
|
|
$
|
9,623
|
|
|
|
|
|
|
$
|
9,623
|
|
|
$
|
(408
|
)
|
|
$
|
9,491
|
|
|
$
|
(65
|
)
|
Average
Contractual
Exchange Rate
|
|
|
95.2113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Receive S$/Pay US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount
|
|
$
|
5,033
|
|
|
|
|
|
|
$
|
5,033
|
|
|
$
|
(14
|
)
|
|
$
|
5,002
|
|
|
$
|
29
|
|
Average
Contractual
Exchange Rate
|
|
|
1.5191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Receive US$/Pay S$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount
|
|
$
|
182,226
|
(1)
|
|
|
|
|
|
$
|
182,226
|
|
|
$
|
1,083
|
|
|
$
|
|
|
|
$
|
|
|
Average
Contractual
Exchange Rate
|
|
|
1.5142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Receive GBP/Pay US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Amount
|
|
$
|
284
|
|
|
|
|
|
|
$
|
284
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Average
Contractual
Exchange Rate
|
|
|
1.4265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Contract Amount
|
|
$
|
197,166
|
|
|
|
|
|
|
$
|
197,166
|
|
|
$
|
661
|
|
|
$
|
14,493
|
|
|
$
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
(1)
|
|
In March 2009, we entered into forward foreign currency agreements to manage the foreign
currency risk relating to a portion of the proceeds of the rights offering which are
primarily denominated in Singapore dollars.
|
Item 4. Controls and Procedures
Not applicable.
32
PART II OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not involved in any legal proceedings that we believe would be materially harmful
to the Company.
Item 2. Unregistered Sales of Equity and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits
99.1
(1)
|
|
Fourth Amended and Restated Participation Agreement dated April 13, 2009 by and
between the Company and International Business Machines Corporation.
|
|
99.2
(1)
|
|
Joint Development Project Agreement for 28nm LP Bulk-Industry Standard
Semiconductor Process Technology effective as of January 1, 2009 by and among International
Business Machines Corporation, the Company and the applicable participating parties thereto.
|
|
99.3
|
|
Amendment Letter dated as of April 3, 2009 to the Facility Agreement dated December 23, 2004
by and among the Company as Borrower, JPMorgan Chase Bank, N.A. as Lender, Export-Import Bank
of the United States as guarantor and JPMorgan Chase Bank, N.A as Facility Agent.
|
|
99.4
|
|
Amendment Letter dated as of April 3, 2009 to the Facility Agreement dated May 16, 2007 by
and among the Company as Borrower, JPMorgan Chase Bank, N.A. as Lender, Export-Import Bank of
the United States as guarantor and JPMorgan Chase Bank, N.A. as Facility Agent.
|
|
|
|
(1)
|
|
Certain portions of Exhibits 99.1 and 99.2 have been omitted pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission. The omitted
portions have been separately filed with the Securities and Exchange Commission.
|
33
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 7, 2009
|
|
|
|
|
|
CHARTERED SEMICONDUCTOR
MANUFACTURING LTD.
|
|
|
By:
|
/s/ Chia Song Hwee
|
|
|
|
Name:
|
Chia Song Hwee
|
|
|
|
Title:
|
President and Chief Executive Officer
|
|
|
|
|
|
|
By:
|
/s/ George Thomas
|
|
|
|
Name:
|
George Thomas
|
|
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
|
34
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