SMIC Denies Allegations and Files Cross-Complaint Against TSMC

Shanghai, China – September 13, 2006. Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) (“SMIC” or the “Company”) announced today that in addition to filing a response strongly denying the allegations of Taiwan Semiconductor Manufacturing Company Ltd (“TSMC”) in the United States lawsuit, SMIC filed a Cross-Complaint against TSMC, seeking, amongst other things, damages for TSMC’s breach of contract and breach of implied covenant of good faith and fair dealing.

In the Cross-Complaint, SMIC sets out in detail the background of why SMIC’s leading role in Mainland China poses a substantial threat to competitors like TSMC. It describes how TSMC, rather than compete in the marketplace, has undertaken a concerted effort since the previous lawsuits to discredit SMIC by making unfair and misleading accusations; how SMIC takes its obligations under the Settlement Agreement seriously and fully complied with the agreement; how TSMC did not voice any complaint for a period of over 17 months, until July 2006, after SMIC succeeded in meeting a number of major business and technical milestones during Q2 2006; how TSMC failed to negotiate or act in good faith, and how TSMC used the lawsuit and subsequent campaign to repeat its previous campaign to disrupt SMIC’s business and valued relationships with its customers.

SMIC will vigorously pursue the Cross-Complaint and the defence to TSMC’s lawsuit in order for the California court, upon full consideration of all evidence, to dismiss TSMC’s claims and grant judgment in favour of SMIC. SMIC would like to thank its customers, partners, investors and other friends for their support to SMIC and reassure them that this lawsuit will not distract it from its mission to provide world class technologies and services and to achieve outstanding and rewarding performance, and its commitment to play a constructive role in the semiconductor industry. SMIC welcomes fair competition and participation by other companies in the development of Mainland China semiconductor industry, and urges TSMC to act fairly and reasonably.

About SMIC
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) manufacturing service at 0.35mm to 90nm and finer line technologies. Headquartered in Shanghai, China, SMIC operates three 200mm fabs in Shanghai and one in Tianjin, and one 300mm fab in Beijing, the first of its kind in Mainland China. SMIC has customer service and marketing offices in the U.S., Italy, and Japan as well as a representative office in Hong Kong. For additional information, please visit http://www.smics.com.

SMIC Denies Allegations and Files Cross-Complaint Against TSMC

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