SMIC Denies Allegations and Files Cross-Complaint Against TSMC

SMIC Denies Allegations and Files Cross-Complaint Against TSMC

September 13, 2006

    SHANGHAI, China, Sept. 13 /Xinhua-PRNewswire/ --
Semiconductor Manufacturing International Corporation
(NYSE: SMI; SEHK: 981) ("SMIC" or the
"Company") announced today that in addition to
filing a response strongly denying the allegations of
Taiwan Semiconductor Manufacturing Company Ltd
("TSMC") in the United States lawsuit, SMIC filed
a Cross-Complaint against TSMC, seeking, amongst other
things, damages for TSMC's breach of contract and breach of
implied covenant of good faith and fair dealing.

    In the Cross-Complaint, SMIC sets out in detail the
background of why SMIC's leading role in Mainland China
poses a substantial threat to competitors like TSMC. It
describes how TSMC, rather than compete in the marketplace,
has undertaken a concerted effort since the previous
lawsuits to discredit SMIC by making unfair and misleading
accusations; how SMIC takes its obligations under the
Settlement Agreement seriously and fully complied with the
agreement; how TSMC did not voice any complaint for a
period of over 17 months, until July 2006, after SMIC
succeeded in meeting a number of major business and
technical milestones during Q2 2006; how TSMC failed to
negotiate or act in good faith, and how TSMC used the
lawsuit and subsequent campaign to repeat its previous
campaign to disrupt SMIC's business and valued
relationships with its customers.

    SMIC will vigorously pursue the Cross-Complaint and the
defence to TSMC's lawsuit in order for the California court,
upon full consideration of all evidence, to dismiss TSMC's
claims and grant judgment in favour of SMIC. SMIC would
like to thank its customers, partners, investors and other
friends for their support to SMIC and reassure them that
this lawsuit will not distract it from its mission to
provide world class technologies and services and to
achieve outstanding and rewarding performance, and its
commitment to play a constructive role in the semiconductor
industry. SMIC welcomes fair competition and participation
by other companies in the development of Mainland China
semiconductor industry, and urges TSMC to act fairly and
reasonably. 

    About SMIC

    SMIC (NYSE: SMI; SEHK: 981) is one of the leading
semiconductor foundries in the world and the largest and
most advanced foundry in Mainland China, providing
integrated circuit (IC) manufacturing service at 0.35mm to
90nm and finer line technologies. Headquartered in
Shanghai, China, SMIC operates three 200mm fabs in Shanghai
and one in Tianjin, and one 300mm fab in Beijing, the first
of its kind in Mainland China. SMIC has customer service
and marketing offices in the U.S., Italy, and Japan as well
as a representative office in Hong Kong. For additional
information, please visit http://www.smics.com .

    For more information, please contact:

    SMIC Shanghai

     Reiko Chang
     SMIC Public Relations Department
     Tel:   [phone] x10544
     E-mail: [e-mail]

    SMIC Hong Kong

     Mei Fung Hoo
     Tel:   [phone]
     Email: [e-mail]

    Strategic Financial Relations Limited

     Veron Ng	
     Tel:   [phone]
     Email: [e-mail]

     Joanne Lam						
     Tel:   [phone]
     Email: [e-mail]

SOURCE  Semiconductor Manufacturing International
Corporation