SHANGHAI, China, Jan. 30 2005 – LAWFUEL – The Law News Network …

SHANGHAI, China, Jan. 30 2005 – LAWFUEL – The Law News Network – Semiconductor
Manufacturing International Corporation (“SMIC”) (NYSE: SMI; SEHK: 0981) today
announced it has resolved pending patent and trade secret litigations with
Taiwan Semiconductor Manufacturing Company (“TSMC”) (NYSE: TSM; TSE: 2330).

Under the settlement’s terms, SMIC will 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). In addition, the two parties will cross
license to each other’s patent portfolio through December 2010. The 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

In the settlement agreement, TSMC covenants 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.

“We are pleased that the litigation has been settled peacefully and
believe that the settlement is in the best interests of the Company’s long
term development,” said Richard R. Chang, President and Chief Executive
Officer of SMIC. “As a young and growing company, we will continue to
cooperate with international companies. We want to focus our resources on
providing better foundry services to our customers.”

About SMIC
SMIC (NYSE: SMI, SEHK: 0981.HK) is one of the leading semiconductor
foundries in the world, providing integrated circuit (IC) manufacturing at
0.35-micron to 0.13-micron and finer line technologies to customers worldwide.
Established in 2000, SMIC has four 8-inch wafer fabrication facilities in
volume production in Shanghai and Tianjin. In addition, SMIC recently
commenced pilot production at its 12-inch wafer fabrication facility in
Beijing. SMIC maintains customer service and marketing offices in the U.S.,
Europe, and Japan. As part of its dedication towards providing high-quality
services, SMIC strives to comply with or exceed international standards and
has achieved ISO9001, ISO/TS16949, OHSAS18001, TL9000 and ISO14001
certifications. For more information, please visit

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