SMIC Reports 2018 Second Quarter Results

Shanghai, China – August 9, 2018. Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) (“SMIC”, the “Company” or “our”), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended June 30, 2018.

Second Quarter 2018 Highlights

• Revenue was $890.7 million in 2Q18, an increase of 7.2% QoQ from $831.0 million in 1Q18 and an increase of 18.6% YoY from $751.2 million in 2Q17. Excluding the recognition of the technology licensing revenue (the “Licensing Revenue”), revenue was $837.9 million in 2Q18, an increase of 15.8% QoQ from $723.4 million in 1Q18 and an increase of 11.5% YoY from $751.2 million in 2Q17.

• Gross profit was $217.8 million in 2Q18, compared to $220.2 million in 1Q18 and $194.1 million in 2Q17. Excluding the recognition of the Licensing Revenue, gross profit was $165.0 million in 2Q18, compared to $112.6 million in 1Q18 and $194.1 million in 2Q17.

• Gross margin was 24.5% in 2Q18, compared to 26.5% in 1Q18 and 25.8% in 2Q17. Excluding the recognition of the Licensing Revenue, gross margin was 19.7% in 2Q18, compared to 15.6% in 1Q18 and 25.8% in 2Q17.

Third Quarter 2018 Guidance:

The following statements are forward looking statements based on current expectations and involved risks and uncertainties, some of which are set forth under “Safe Harbor Statements” below.The Company expects:

• Revenue todecreaseby 4%to 6% QoQ. Excluding the technology licensing revenue recognized in 2Q18, revenue to be flat to up by 2% QoQ.
• Gross margin to range from 19% to 21%.
• Non-GAAP operating expenses, excluding the effect of employee bonus accrual, government funding, impairment loss of machinery and equipment, gain or loss on the disposal of machinery and equipment and gain from the disposal of living quarters, to range from $232 million to $238 million.
• Non-controlling interests of our majority-owned subsidiaries to range from positive $19 million to positive $21 million (losses to be borne by non-controlling interests).

Dr. Zhao Haijun and Dr. Liang Mong Song, SMIC’s Co-Chief Executive Officers commented, “SMIC is in a period of transition and preparation. We are making encouraging progress in advancing our technology, building up our technology platforms, and forging partnerships. At the same time, we are on track to grow high-single digits annual revenue as demand and utilizations recovered in the second quarter. In the second quarter, our revenue from the China region when excluding the technology license revenue grew 14% sequentially and 38% year over year. As the preferred foundry partner in China, we are positioned to benefit from the growth opportunities of the China IC market.

We are pleased to say that we have achieved significant progress on our 14nm FinFET development. The R&D of our first version of FinFET technology is now ready for business engagement. In addition to our 28nm PolySiON and HKC, our HKC+ technology development is now complete. Our 28nm HKC continues to ramp up, as its yield meets industry benchmark. Moreover, we will continue to expand and enhance both our mature and advanced technology platforms to provide comprehensive and competitive services.”

Conference Call / Webcast Announcement

Date: August 10, 2018

Time: 8:30 a.m. Beijing time

Dial-in numbers and pass code:

The call will be webcast live with audio at http://www.smics.com/en/site/company_activity or https://edge.media-server.com/m6/p/pmqpyy3p.

An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.

About SMIC

Semiconductor Manufacturing International Corporation (“SMIC”; NYSE: SMI; SEHK: 981), one of the leading foundries in the world, is Mainland China’s largest foundry in scale, broadest in technology coverage, and most comprehensive in semiconductor manufacturing services. SMIC provides integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 28 nanometer. Headquartered in Shanghai, China, SMIC has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm fab in Shanghai; a 300mm fab and a majority-owned 300mm fab for advanced nodes in Beijing; 200mm fabs in Tianjin and Shenzhen; and a majority-owned joint-venture 300mm bumping facility in Jiangyin; additionally, in Italy SMIC has a majority-owned 200mm fab. SMIC also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.

For more information, please visit www.smics.com.

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