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SMIC to Manufacture Spansion’s 45nm Flash Memory

SUNNYVALE, Calif. & WUHAN, China — Spansion Inc. (NYSE: CODE), a leading provider of NOR Flash memory, and Semiconductor Manufacturing International Corporation (“SMIC”; NYSE: SMI; SEHK: 0981.HK), China's largest and most advanced semiconductor foundry, today announced they will extend their current foundry arrangement to expand 65nm capacity and include the manufacture of Spansion's 45nm Flash memory.

As part of the agreement, Spansion will prepay SMIC $50 million against future procurement of wafers. The prepayment, made in three tranches over the next 12 months, will help SMIC procure equipment for use in Spansion's fabrication processes.

SMIC and Spansion have been working together since 2008, when they began the 65nm MirrorBit® Flash memory process installation. Spansion also manufactures its 65nm products at its flagship manufacturing facility in Austin, Texas.

“Working with SMIC's world-class foundry services and team supports our flexible manufacturing strategy to meet growing customer demand for our differentiated products,” said John Kispert, president and CEO of Spansion. “We expect our partnership to become even stronger with the recent joint venture between the government of Wuhan and SMIC.”

Spansion will begin transferring its 45nm Flash technology this month, with production expected in the first half of 2012.

“Spansion and SMIC have a collaborative and successful relationship that has been built on our mutual commitment to high quality and reliability,” said David N.K. Wang, SMIC's President and CEO. “We are pleased to expand our engagement and look forward to our continued cooperation in China.”

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

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