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SMIC & Hubei Group Sign Joint Venture Agreement

WUHAN, China — Semiconductor Manufacturing International Corporation (“SMIC”; NYSE: SMI; SEHK: 0981.HK) and Hubei Science & Technology Investment Group today announced the formal signing of a joint venture agreement to invest in and manage Wuhan Xinxin Semiconductor Manufacturing Corporation's 12-inch wafer production line. This represents a new phase in the ongoing cooperation between SMIC and the government of Wuhan.

The National Development and Reform Commission, The Ministry of Industry and Information Technology, China Development Bank, Hubei province and Wuhan city government officials, SMIC President and CEO David N.K. Wang and others were in attendance at the signing ceremony. In October 2010, both parties reached a cooperation framework agreement, and have since continued to work towards a final agreement. After receiving high-level support from the central and Hubei province governments, and the approval of the board of directors of both companies, the joint venture agreement was officially signed today.

SMIC has been rapidly upgrading Wuhan Xinxin's production technology. 65nm logic process technology has already been transferred to Wuhan Xinxin's 12-inch production line, all manufacturing key performance indices have reached international standards, and customer qualification and pilot production have begun. This successful technology transfer will contribute to the development of the Wuhan fabrication facility into an advanced international foundry.

Wuhan Xinxin's 12-inch production line is running at full capacity, with increased high-end product output and enhanced profitability. The joint venture will prioritize corporate responsibility and profitability in its business development plans. It will primarily manufacture 65-45 nanometer integrated circuits, with a goal of achieving a production capacity of 45,000 wafers per month within five years. This fabrication facility will serve as a strategic component in SMIC's expansion plan, and will become a key contributor to the Chinese and global semiconductor industries as a reliable platform for high-end chip manufacturing.

SMIC will expand its cooperation with the city of Wuhan in areas such as training, chip design and industry supply chain improvements, to advance the economic development of Wuhan's “Optics Valley” and raise the level of the information technology industry in Hubei Province. It will be an innovative engine driving the strategic development of the East Lake Hi-Tech Zone into a National Innovation Model Area and the “Optics Valley of China.”

{complink 12815|Semiconductor Manufacturing International Corp. (SMIC)}

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