SMIC Reports 2011 Second Quarter Results

Shanghai  -- August 10, 2011 -- Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) (“SMIC” or the “Company”), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended June 30, 2011.

Second Quarter 2011 Highlights:

• Revenue down by 4.9% to $352.4 million in 2Q11 from $370.6 million in 1Q11 and down by 5.9% compared to 2Q10.
• Gross margin was 14.3% in 2Q11 compared to 18.6% in 1Q11 primarily due to decreased wafer starts from weakened demand in the third quarter.
• Net cash flow from operations increased to $79.4 million in 2Q11 from $73.4 million in 1Q11.
• Loss attributable to holders of ordinary shares was $3.8 million in 2Q11, compared to income of $10.2 million in 1Q11.
• Diluted EPS was $(0.0066) per ADS.

Third Quarter 2011 Guidance:

The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties, some of which are set forth under “Safe Harbor Statements” below.

• Revenue is expected to decline between -14% to -17%.
• Gross margin is expected to range from 0% to 3%.
• Operating expenses excluding foreign exchange differences are expected to range from $86 million to $89 million.

Gary Tseng, Chief Financial Officer commented, “Highlighting our second quarter performance, revenue decreased 4.9% quarter-over-quarter to $352 million. This decline was in part due to our customer transition to 65nm and 45nm and largely due to unexpected changes in some of our customers’ programs—including some customers skipping 65nm to work on 45nm and one customer abandoning their lower-end baseband business. Despite these changes, we continue to have new tape outs for 65nm and customers committed to working with us on their 45/40nm products, which will likely contribute meaningful revenue next year.

“Looking into the third quarter, the overall demand from both international and domestic customers is weaker than expected due to relatively soft end-market consumption and high inventory, in addition to sudden customer product changes. The combination of these factors will pose adverse impacts to our revenue for the third quarter of 2011. Our visibility into fourth quarter demand is currently limited, and the overall global economic outlook also contributes to uncertainty. We currently do not see any particular strengths from customer demand for back-to-school and holiday seasons, so we currently remain cautious on our overall second half 2011 outlook.”

Conference Call / Webcast Announcement

• Date: Thursday, August 11, 2011
• Time: 8:30 a.m. Shanghai time
• Dial-in numbers and pass code:
• Dial in 1-800-510-0219 (Pass code: SMIC)
• International 1-617-614-3451 (Pass code: SMIC)
• HK 852-3002-1672 (Pass code: SMIC)

A live webcast of the 2011 second quarter announcement will be available at http://www.smics.com under the “Investor Relations” section, or at

URL: http://phx.corporate-ir.net/playerlink.zhtml?c=176474&s=wm&e=4153540  

An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.

About SMIC

Semiconductor Manufacturing International Corporation (“SMIC”; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in Mainland China, providing integrated circuit (IC) foundry and technology services at 0.35-micron to 45/40-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and three 200mm wafer fabs in its Shanghai mega-fab, two 300mm wafer fabs in its Beijing mega-fab, a 200mm wafer fab in Tianjin, and a 200mm fab under construction in Shenzhen. SMIC also has customer service and marketing offices in the U.S., Europe, and Japan, and a representative office in Hong Kong. In addition, SMIC manages and operates a 300mm wafer fab in Wuhan owned by Wuhan Xinxin Semiconductor Manufacturing Corporation.

For more information, please visit www.smics.com

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