Shanghai, China  [2004-07-30]

NEWS RELEASE

All currency figures stated in this report are in US Dollars unless stated otherwise.
The financial statement amounts in this report are determined in accordance with US GAAP.

SMIC reports 2004 second quarter results

Highlights

Sales increased to $221.0 million, up 18.2% from $186.9 million in 1Q04.
Income from operations increased to $36.4 million, up 35.6% from $26.8 million in 1Q04.
Income attributable to holders of ordinary shares increased to $34.2 million, up 296.7% from $8.6 million in 1Q04.
Compared to 1Q04, wafer shipments increased by 15.6% to 201,534 8-inch wafers; blended average selling price increased by 2.6% to $1,034.
Basic EPS $0.0019 (HKD$0.0149(1)) per ordinary share and $0.0955 per ADS; diluted EPS $0.0019 (HKD$0.0147(1)) per ordinary share and $0.0941 per ADS.

Shanghai, China ?C July 30, 2004. 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, 2004. Sales increased 18.2% in the second quarter of 2004 to $221.0 million from $186.9 million in the prior quarter. Income from operations increased 35.6% in the second quarter of 2004 to $36.4 million from $26.8 million in the prior quarter.

The Company reported income attributable to holders of ordinary shares increased 296.7% in the second quarter of 2004 to $34.2 million from $8.6 million in the prior quarter, or $0.0019 (HKD$0.0149(1)) per ordinary share and $0.0955 per ADS (on a fully diluted basis, $0.0019 (HKD$0.0147(1)) per ordinary share, and $0.0941 per ADS).

“We are pleased to report sequential growth during the second quarter of 2004,” said Dr. Richard Chang, President and Chief Executive Officer of SMIC. “During the second quarter of 2004, we were able to expand our technology offerings and engaged 15 new customers, 7 of which are China fabless companies. We received relatively strong orders from our customers across all market segments, and in particular the consumer products market. We continued to execute our business plan by commencing commercial production at Fab 7, located in Tianjin. Furthermore, the ramp up of Fab 4, located in Beijing, continues on schedule with pilot production commencing on July 23 and commercial production set for later this year. In addition, SMIC has forged a strategic joint venture with Toppan Printing Co., Ltd. to manufacture on-chip color filters and micro lenses and a joint venture for assembly and testing in Chengdu. We believe that these achievements have established a fundamental framework for continued and sustainable growth for the duration of the year and in the future.”

Note:
(1) Based on the exchange rate of HKD$7.7996 to USD$1.00 at the close of July 28, 2004. (Source: Bloomberg)

Conference call / Webcast announcement details

Date: July 30, 2004
Time: 8:30 a.m. Shanghai time
Dial-in numbers and access codes: U.S. 1-617-801-9711 (Pass code: 70633890) or HK 852-3002-1672
(Pass code: 70633890).

A live webcast of the 2Q 2004 results announcement will be available at www.smics.com under the “Investor Relations” section. An archived version of the webcast, along with a soft copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.

About SMIC

SMIC (NYSE: SMI, SEHK: 0981.HK) is one of the leading semiconductor foundries in the world. As a foundry, SMIC provides integrated circuit (IC) manufacturing at 0.35-micron to 0.13-micron technologies. Established in April 2000, SMIC, a Cayman Islands company, operates three 8-inch wafer fabrication facilities in the Zhangjiang High-Tech Park in Shanghai, and an 8-inch wafer fabrication facility in Tianjin, China. In addition, SMIC is currently constructing 12-inch wafer fabrication facilities in Beijing, China. SMIC’s Fab 1 was named one of two “Top Fabs of the Year 2003” by Semiconductor International, a leading industry publication in May 2003. In addition to IC manufacturing, SMIC provides customers with a full range of services, including design services, mask manufacturing and wafer probe test. For more information, please visit www.smics.com.

Safe harbor statements
(Under the Private Securities Litigation Reform Act of 1995)

This press release may contain, in addition to historical information, “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on SMIC’s current assumptions, expectations and projections about future events. SMIC uses words like “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of SMIC’s senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC’s actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, intense competition, timely wafer acceptance by SMIC’s customers, timely introduction of new technologies, SMIC’s ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity and financial stability in end markets.

Investors should consider the information contained in SMIC’s filings with the U.S. Securities and Exchange Commission (SEC), including its registration statement on Form F-1, as amended, filed with the SEC on March 11, 2004, especially in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections, and its registration statement on Form A-1 as filed with the Stock Exchange of Hong Kong (SEHK) on March 8, 2004, and such other documents that SMIC may file with the SEC or SEHK from time to time, including on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC’s future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release.

Except as required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Investor Contacts:

Jimmy Lai
Head of Investor Relations
Tel: 86-21-5080-2000, ext. 16088
Fax: 86-21-5080-3070

Calvin Lau
Investor Relations
Tel: 86-21-5080-2000, ext. 16693
Fax: 86-21-5080-3070

Evonne Hwang
Investor Relations
Tel: 86-21-5080-2000, ext. 16275
Fax: 86-21-5080-3070

Sarina Huang
Public Relations
Tel: 86-21-5080-2000, ext. 10356
Fax: 86-21-5080-2868

For the full SMIC Quarter 2 Earnings Release, click the following link.

SMIC earnings release