UPDATE: SMIC 3Q Loss Widens; See 4Q Revenue Rising From 3Q

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Semiconductor Manufacturing International Corp.'s (SMI) third-quarter loss widened substantially on weaker chip demand from a year ago.

China's largest chip foundry by capacity also expects fourth-quarter revenue to rise 2% to 5% from the latest quarter, less than what the many anticipate the industry going sequentially.

In July, Chief Executive Richard Chang said "the worst is over," and saw the recovery continuing in the third quarter as demand for computers and consumer products in China picks up.

Global chip makers have suffered amid the pullback in consumer spending. U.S. chip giant Intel Corp. (INTC) two weeks ago served up further evidence that the computer market is healthier than many people suspected, reporting third-quarter results that were well above upbeat projections it issued weeks earlier.

SMIC's loss widened to $69.4 million, or 16 cents per American Depositary Share, from $30.3 million, or 8 cents per ADS. Revenue dropped 14% to $323.4 million, but rose a bigger-than-expected 21% from the second quarter amid increasing orders.

Gross margin fell to 0.8% from 7.2%, but the prior quarter's sales didn't exceed manufacturing costs.

Factory utilization rose to 87.3% from 75.4% in the prior quarter, in line with Chang's July forecast, but fell from 90.5% a year ago.

SMIC's ADS closed at $89 and didn't trade premarket. They are up 27% the past year.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; [e-mail]