Semiconductor Manufacturing International Corporation

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Semiconductor Manufacturing International Corporation or SMIC, is an IC foundry headquartered in Shanghai.

Semiconductor Manufacturing International Corporation (SMIC) is currently the largest semiconductor manufacturer in Mainland China with a total of seven manufacturing facilities (fabs) and with three more under construction. In becoming China’s largest semiconductor company, SMIC grew from a $50 million company (in total revenue) in 2002 to a $974 million company by the end of 2004. SMIC’s rapid growth is highly attributed to its experienced overseas management, its lean cost structure as well as a consistent strategy to maintain healthy, long-term client relationships. SMIC’s rapid success over the past five years is due largely to improving demand for semiconductor products, especially during 2002-2004. On March 17, 2004, investors celebrated SMIC’s success through the company’s $1.0 billion dual listing on the Hong Kong and New York stock exchanges. With the rapid ascension as one of the world’s top three foundries and the completion of its initial public offering, various accounting issues and questions have manifested as SMIC’s now publicly released financials have become scrutinized by investors, analysts and the Securities and Exchange Commission alike.

SMIC is a pure commercial IC foundry, committed to providing a full range of IC fabrication services, including leading-edge products and value-added services, to domestic and global customers. SMIC operates facilities in four locations — Shanghai, Beijing, Tianjin and Chengdu —with a combined wafer capacity of 102,615 wpm by end-FY04, including a 300mm fab in Beijing. SMIC’s aggressive expansion plan should see it become the largest foundry in China.

As a foundry, SMIC fabricates semiconductors for customers based on their own or third parties’ integrated circuit designs. SMIC was founded in April 2000 and within three years developed the capabilities to offer a wide range of leading edge integrated wafer manufacturing services, including copper interconnects capabilities, to its global customer base. The Company operates 8-inch wafer fabrication facilities in the Zhangjiang High-Tech Park in Shanghai, China, an 8-inch wafer fab in Tianjin, China, and a 12-in wafer fab in Beijing, China. These fabs had an aggregate capacity as of December 31, 2004 of 102,615 8-inch wafers per month for wafer fabrication and 17,802 wafers per month for copper interconnects, which positions SMIC as a leading foundry in China. In addition, the Company is currently constructing an assembly and testing facility in Chengdu. Fab 1 at the facility in Shanghai was selected as one of the two “Top Fabs of 2003” by Semiconductor International, a leading industry publication. In addition, SMIC was ranked second in a readers’ poll of top global foundries of 2003 conducted by Silicon Strategies, another leading semiconductor industry publication.

The Company intends to expand its capabilities in the fabrication of semiconductor wafers using both high-end logic and memory technologies. In addition to wafer fabrication, service offerings include a comprehensive portfolio of intellectual property consisting of libraries and circuit design blocks, design support, mask making and wafer probing. SMIC also works with various partners to provide assembly and testing services but by the end of 2005, the Company’s assembly and testing facility will come online and provide its customers with assembly and testing support.

SMIC has a global and diversified customer base that includes integrated device manufacturers, such as Fujitsu Limited, Infineon Technologies AG, Samsung Electronics Co., Ltd., STMicroelectronics Pte. Ltd. and Texas Instruments Incorporated, and fabless semiconductor companies, such as Broadcom Corporation, Elite Semiconductor Memory Technology Inc. and Marvell Semiconductor, Inc.