Feb. 1, 2007 (China Knowledge) – Semiconductor Manufacturing International Corp (SMIC)<SMI><981>, China's largest chipmaker, reported an unexpected net profit for the fourth quarter of 2006, thanks to a US$41.7 million gain from the sale of old machinery.

The company said fourth-quarter profit was US$1.2 million, compared with a net loss of US$15 million in 2005. Sales rose 15.2% to US$383.8 million.

However, gross margin fell to 6.6% from 12.6% due to price pressure on logic chips, which are usually used to make a computer's central processing unit.

Helped by the quarterly profit, the company's net loss shrank 64% to US$40.1 million last year from US$111 million in 2005. Sales grew 25% to US$1.46 billion.

SMIC is a semiconductor foundry engaged in the computer-aided design, manufacturing, packaging, testing and trading of integrated circuits (IC) and other semiconductor services, as well as the manufacturing design of semiconductor masks.