SMIC Signs Strategic Investment Deal

National Business Daily, 11/07/08

Chinese semiconductor firm Semiconductor Manufacturing International Corporation (SMIC) (NYSE: SMI, 0981.HK) has issued notice of a suspension of trading, after signing an agreement to issue shares to a strategic investor. SMIC did not provide details of who the investor would be, however current rumors suggest that it may be Chinese communications equipment and services provider Datang Telecom Technology (600198.SH). Other private parties may also make investments in the company.

Addressing the company's financial difficulties, SMIC CEO Richard Chang has stated that SMIC has set down a plan for reducing its expenses, which will be cut by USD 200 mln in 2009. SMIC will not expand production in 2009 before there is a visible strengthening of consumer demand for handsets.

Sources are also claiming that SMIC has already stopped production at its 12-inch production line in Beijing.

Keywords: Richard Chang 0981.HK 12-inch 600198.SH Datang Telecom hardware investment semiconductor SMI SMIC strategic investor

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