SHANGHAI, China, Aug. 28 /Xinhua-PRNewswire/ -- * The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION (Incorporated in the Cayman Islands with limited liability) (STOCK CODE: 0981) Matters in Respect of Settlement Agreement With TSMC -- Semiconductor Manufacturing International Corporation ("SMIC" or the "Company") hereby announces that it has been informed of the filing of a complaint instituting a lawsuit by Taiwan Semiconductor Manufacturing International Corporation ("TSMC") in respect of an alleged breach of the settlement agreement entered into between the Company and TSMC on January 30, 2005 concerning patents and trade secret litigations between the Company and TSMC ("Settlement Agreement"). Details of the Settlement Agreement are disclosed in the Company's announcement published on January 31, 2005. -- This announcement is made pursuant to the disclosure obligations under Rule 13.09(1) of The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in order to enable investors and the public to appraise the position of the group. Semiconductor Manufacturing International Corporation ("SMIC" or the "Company") hereby announces that it has been informed of the filing of a complaint instituting a lawsuit by Taiwan Semiconductor Manufacturing International Corporation ("TSMC") in respect of an alleged breach of the settlement agreement entered into between the Company and TSMC on January 30, 2005 concerning patents and trade secret litigations between the Company and TSMC ("Settlement Agreement"). Details of the Settlement Agreement are disclosed in the Company's announcement published on January 31, 2005. As disclosed in the said announcement, pursuant to the Settlement Agreement, SMIC has agreed to 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) (of which US$45 Million has already been paid). In addition, the two parties have agreed to cross license to each other's patent portfolio through December 2010. The Settlement 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 has covenanted 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. Since the Settlement Agreement with TSMC in January 2005, SMIC has worked diligently to honour the agreement and has complied with its terms. SMIC is very shocked by and deeply disappointed with the actions of TSMC and believes their actions are brought in bad faith. Whilst SMIC will fight the lawsuit and defend and protect our interests, SMIC urges TSMC to act reasonably and honour the Settlement Agreement we reached. As at the date of this announcement, the directors of the Company are Yang Yuan Wang as Chairman of the Board of Directors and Independent Non-Executive Director of the Company; Richard R. Chang as President, Chief Executive Officer and Executive Director of the Company; Fang Yao as Non-Executive Director of the Company; and Ta-Lin Hsu, Tsuyoshi Kawanishi, Henry Shaw, Lip- Bu Tan, Albert Y. C. Yu and Jiang Shang Zhou as Independent Non-Executive Directors of the Company. Semiconductor Manufacturing International Corporation Richard R. Chang Chief Executive Officer Shanghai, PRC August 28, 2006 Please also refer to the published version of this announcement in The Standard. For more information, please contact: SMIC Shanghai Reiko Chang SMIC Public Relations Department Tel: +86-21-5080-2000 x10544 Email: SMIC Hong Kong Calvin Lau / Mei Fung Hoo Tel: +852-9435-2603 / +825-2537-8480 Email: / DATASOURCE: Semiconductor Manufacturing International Corporation CONTACT: Reiko Chang of SMIC Shanghai, +86-21-5080-2000 x10544, or ; Calvin Lau or Mei Fung Hoo of SMIC Hong Kong, +852-9435-2603 or +825-2537-8480, or or Web Site: http://www.smics.com/

Copyright