SMIC Reaches Settlement with TSMC

SHANGHAI, China, Jan. 30 /Xinhua-PRNewswire-FirstCall/ -- Semiconductor Manufacturing International Corporation ("SMIC") (NYSE: SMI; SEHK: 0981) today announced it has resolved pending patent and trade secret litigations with Taiwan Semiconductor Manufacturing Company ("TSMC").

Under the settlement's terms, SMIC will pay TSMC $175 million, payable in installments over six years ($30 million in each of the first five years and $25 million in the sixth year). In addition, the two parties will cross license to each other's patent portfolio through December 2010. The agreement also provides for the dismissal of all pending legal actions without prejudice between the two companies in U.S. District Court, California State Superior Court, the U.S. International Trade Commission, and Taiwan District Court as well.

In the settlement agreement, TSMC covenants not to sue SMIC for itemized acts of trade secret misappropriation as alleged in the complaints, although the settlement does not grant a license to use any of TSMC's trade secrets. The patent cross license and settlement agreement are terminable upon a breach by SMIC, which may result in the reinstitution of the legal proceedings and acceleration of the outstanding payments under the settlement agreement.

"We are pleased that the litigation has been settled peacefully and believe that the settlement is in the best interests of the Company's long term development," said Richard R. Chang, President and Chief Executive Officer of SMIC. "As a young and growing company, we will continue to cooperate with international companies. We want to focus our resources on providing better foundry services to our customers."

About SMIC

SMIC (NYSE: SMI, SEHK: 0981.HK) is one of the leading semiconductor foundries in the world, providing integrated circuit (IC) manufacturing at 0.35-micron to 0.13-micron and finer line technologies to customers worldwide. Established in 2000, SMIC has four 8-inch wafer fabrication facilities in volume production in Shanghai and Tianjin. In addition, SMIC recently commenced pilot production at its 12-inch wafer fabrication facility in Beijing. SMIC maintains customer service and marketing offices in the U.S., Europe, and Japan. As part of its dedication towards providing high-quality services, SMIC strives to comply with or exceed international standards and has achieved ISO9001, ISO/TS16949, OHSAS18001, TL9000 and ISO14001 certifications. For more information, please visit http://www.smics.com/.