ASMC Announces 2006 Interim Results
10 August 2006

Smooth ramp-up for 8-inch wafers helps turnaround 1H results

Operational Highlights:

1. Successfully listed on the Main Board of HKEX on 7 April 2006
2. Solid turnaround for 1H06 with net profit amounting to RMB22,131,000
3. Revenue increased by 52% from 1H05
4. Gross margin improved significantly to 16% for the period under review
5. Operating margin improved to 7% for 1H06

Financial Highlights:

Hong Kong, 10 August 2006 – Advanced Semiconductor Manufacturing Corporation Limited (“ASMC” or “the Company”, stock code: 3355), a leading foundry focusing primarily on the manufacturing of analog semiconductors and higher bipolar content-based mixed-signal semiconductors, is pleased to announce its interim results for the six months ended 30 June 2006.

Benefited from the revival of the global semiconductor industry and the increased production capacity for 8-inch wafers and higher wafer shipment, ASMC recorded a revenue of RMB653,825,000 for the period under review, representing an increase of 51.8% from RMB430,712,000 for the corresponding period last year. Net profit amounted to RMB22,131,000, as compared to a loss of RMB39,379,000 for the same period last year.

Commenting on the encouraging results, Dr. Tony Liu, President of ASMC, said, “2006 is an exciting year for ASMC. We successfully listed on the Hong Kong Stock Exchange in April, which strengthened our financial position and enabled us to further capitalize on our position as a leading analog foundry. We are particularly encouraged to have achieved a solid turnaround in the first half of 2006.”

The strong growth in revenue for the first half of 2006 was mainly attributable to the increased capacity and wafer shipment. The Company’s capacity of 8-inch equivalent wafers increased to 308,000 pieces for the six months ended 30 June 2006 from 266,000 pieces for corresponding period last year. The shipment of 8-inch equivalent wafers increased by 49.5% to 223,982 pieces for the period under review. Utilization rate of 8-inch equivalent reached 69% in the second quarter of 2006.

Improved line yield of 8-inch wafers, coupled with the increase in production volume which eventually lead to lower absorption of fixed overhead costs per unit resulted in significant improvement of the overall gross margin to 16.3%, compared to 6.9% for the same period last year. The Company’s operating margin also improved to 6.9% for the period under review.

ASMC maintained a balanced revenue source, with communication, computer and consumer sectors each contributing roughly one-third of the total revenue. In the second quarter of 2006, North America remained the largest market for ASMC, generating 53% of the total revenue while Asia Pacific was becoming a more significant contributor. In line with first quarter of 2006, integrated device manufacturers (“IDMs”) and fabless sales accounted for respectively 42% and 58% of the total revenue in the second quarter of 2006.   

The stabilization of the 8-inch production technology greatly reduced research and development costs for the period under review. R&D costs decreased by 46.5% to RMB20,000,000 from RMB37,400,000 for the same period last year.

Looking ahead, ASMC is optimistic about the full year performance of 2006. The Company is expected to benefit from the continued recovery of the industry and the ramp up of 8-inch fab, which will continue to improve the utilization and quality management. The Company will continue to capitalize on its presence in the PRC and address the growing domestic demand for analog semiconductors.

“We will realize our commitment to our customers by rendering high quality, reliable, flexible and cost-effective manufacturing solutions to them. We will also strengthen our strategic capabilities as a leading analog foundry and grow in line with the promising prospect of analog semiconductor industry overseas and in China,” concluded Dr. Liu.

About ASMC

ASMC was initially incorporated in October 1988 as a Sino-foreign equity joint venture, established exclusively to supply analog semiconductors to the Philips Group. On 2 March 2004, ASMC re-registered as a foreign invested joint stock company. On 7 April 2006, ASMC was listed on the Main Board of the Stock Exchange of Hong Kong Limited.

Major customers of ASMC include some of the world’s leading IDMs and fabless semiconductor companies such as Semtech, the Philips Group, Datang Microelectronics, Texas Instruments, Fairchild Semiconductor, National Semiconductor, AOS, California Micro Devices and Monolithic Power Systems.

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