Dear Shareholders,
After the sudden passing away of our late Chairman Dr. Jiang Shang Zhou, and the resignation of our CEO, Dr. David N.K. Wang, the Company was confronted with the absence of both its chairman and CEO. Unfortunately this situation led to extensive concerns about the Company and induced rumors of changes to our management team. On behalf of SMIC’s Board, I apologize for any investor concerns caused by these events and rumors.
Under the concerted efforts of its management team and fellow employees, SMIC has developed into the largest and most advanced foundry in Mainland China and the fourth largest semiconductor foundry in the world. Last year, the Company realized annual profits for the first time after the year of its IPO and achieved record-high revenue. The Company is at a new stage of further accelerating its development. Although, the current crisis emerged in a sudden and unexpected manner, it also facilitated thorough and serious re-examination of the role of SMIC as well as its future direction. Amidst the suspension of trading, members of the Board underwent thorough and in-depth exchange and discussion. We have reached a consensus that the independence of SMIC should be preserved and shareholders’ interests should be maximized when conducting business in order to achieve a better future. Furthermore, we re-emphasize the importance of being an international enterprise to fully and efficiently utilize international and domestic resources, while implementing professional and standardized operations and management, keeping management and employees aligned with the interests of our shareholders. With such an alignment of interests, we hope that our employees will be proud of their company and that our investors will be pleased with and continue their support of SMIC as we strive to realize the long-term targets of the Company.
Looking back the past two years, under the leadership of Chairman Jiang Shang Zhou and Dr. David N. K. Wang, the CEO and President, the Company continued to solidify its position in the industry and seized the opportunity to lead SMIC to a new era of development. Dr. Wang formally submitted his resignation to the Board to resign from all his duties at SMIC with immediate effect on July 13, 2011. Dr. Wang was appointed as the Company’s President, CEO and Executive Director on November 9, 2009. During his tenure, he initiated a series of measures in the Company that achieved notable results. Under the leadership of the Board and during Dr. Wang’s tenure at the Company, SMIC steadily grew, laying a good foundation for future development. After thoughtful consideration, the Board accepted his resignation and at the same time, expressed its gratitude for the remarkable contributions made by Dr. Wang. Upon lengthy discussion and deliberation by the Board, it was decided that I, Zhang Wenyi, would assume the position of acting CEO prior to the appointment of a new CEO by the Company. I will be primarily responsible for operating the Company’s business, and will be leading all employees to strive for the further development of the business. We aim to maintain and enhance the Company’s position in the worldwide semiconductor industry.
Simultaneously, I am very honored to have been recently elected as the new chairman of SMIC, though it comes with enormous responsibility and great challenges. I am willing to work together with all members of the Board, management team and fellow employees to jointly strive for further developing the Company and continuously enhancing its profitability to create long-term value for investors. Meanwhile, we must also increase our efforts in the development of our corporate culture, employee unity, and employees’ sense of ownership. In addition, the Company aims to become a model advanced technology enterprise through its compliance to law and regulation, standardization of operations, societal integration, and corporate social responsibility. As we continue to achieve new milestones, I sincerely hope that our shareholders will continue their patient support of the Company. We will continue to update you on ongoing, mid and long-term developments of the Company with timeliness and transparency.
Yours faithfully,
18 July 2011
Safe Harbor Statement
This letter to investors contains "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. Forward-looking statements in this letter to investors include statements regarding SMIC’s development, its independence, enhancement of its position in the worldwide semiconductor industry, its profitability and its ability to create long-term value for investors. These forward-looking statements 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 the 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 capture growth opportunities in China, supply and demand for semiconductor foundry services, orders or judgments from pending litigation 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 Annual Report on Form 20-F filed with the SEC on June 28, 2011, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, 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 letter to investors 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 letter to investors. Except as may be 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.
After the sudden passing away of our late Chairman Dr. Jiang Shang Zhou, and the resignation of our CEO, Dr. David N.K. Wang, the Company was confronted with the absence of both its chairman and CEO. Unfortunately this situation led to extensive concerns about the Company and induced rumors of changes to our management team. On behalf of SMIC’s Board, I apologize for any investor concerns caused by these events and rumors.
Under the concerted efforts of its management team and fellow employees, SMIC has developed into the largest and most advanced foundry in Mainland China and the fourth largest semiconductor foundry in the world. Last year, the Company realized annual profits for the first time after the year of its IPO and achieved record-high revenue. The Company is at a new stage of further accelerating its development. Although, the current crisis emerged in a sudden and unexpected manner, it also facilitated thorough and serious re-examination of the role of SMIC as well as its future direction. Amidst the suspension of trading, members of the Board underwent thorough and in-depth exchange and discussion. We have reached a consensus that the independence of SMIC should be preserved and shareholders’ interests should be maximized when conducting business in order to achieve a better future. Furthermore, we re-emphasize the importance of being an international enterprise to fully and efficiently utilize international and domestic resources, while implementing professional and standardized operations and management, keeping management and employees aligned with the interests of our shareholders. With such an alignment of interests, we hope that our employees will be proud of their company and that our investors will be pleased with and continue their support of SMIC as we strive to realize the long-term targets of the Company.
Looking back the past two years, under the leadership of Chairman Jiang Shang Zhou and Dr. David N. K. Wang, the CEO and President, the Company continued to solidify its position in the industry and seized the opportunity to lead SMIC to a new era of development. Dr. Wang formally submitted his resignation to the Board to resign from all his duties at SMIC with immediate effect on July 13, 2011. Dr. Wang was appointed as the Company’s President, CEO and Executive Director on November 9, 2009. During his tenure, he initiated a series of measures in the Company that achieved notable results. Under the leadership of the Board and during Dr. Wang’s tenure at the Company, SMIC steadily grew, laying a good foundation for future development. After thoughtful consideration, the Board accepted his resignation and at the same time, expressed its gratitude for the remarkable contributions made by Dr. Wang. Upon lengthy discussion and deliberation by the Board, it was decided that I, Zhang Wenyi, would assume the position of acting CEO prior to the appointment of a new CEO by the Company. I will be primarily responsible for operating the Company’s business, and will be leading all employees to strive for the further development of the business. We aim to maintain and enhance the Company’s position in the worldwide semiconductor industry.
Simultaneously, I am very honored to have been recently elected as the new chairman of SMIC, though it comes with enormous responsibility and great challenges. I am willing to work together with all members of the Board, management team and fellow employees to jointly strive for further developing the Company and continuously enhancing its profitability to create long-term value for investors. Meanwhile, we must also increase our efforts in the development of our corporate culture, employee unity, and employees’ sense of ownership. In addition, the Company aims to become a model advanced technology enterprise through its compliance to law and regulation, standardization of operations, societal integration, and corporate social responsibility. As we continue to achieve new milestones, I sincerely hope that our shareholders will continue their patient support of the Company. We will continue to update you on ongoing, mid and long-term developments of the Company with timeliness and transparency.
Yours faithfully,
18 July 2011
Safe Harbor Statement
This letter to investors contains "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. Forward-looking statements in this letter to investors include statements regarding SMIC’s development, its independence, enhancement of its position in the worldwide semiconductor industry, its profitability and its ability to create long-term value for investors. These forward-looking statements 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 the 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 capture growth opportunities in China, supply and demand for semiconductor foundry services, orders or judgments from pending litigation 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 Annual Report on Form 20-F filed with the SEC on June 28, 2011, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, 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 letter to investors 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 letter to investors. Except as may be 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.
