SMIC Reports 2013 First Quarter Results

All currency figures stated in this report are in US Dollars unless stated otherwise.

The Company started to prepare consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS") in 2012's Annual Report. This is the first Earnings Release under IFRS and all prior period information reclassified to conform to IFRS presentation.

SHANGHAI, April 24, 2013 /PRNewswire/ -- Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended March 31, 2013. 

First Quarter 2013 Highlights:

• Fourth consecutive quarter of record high revenue of $501.6 million in 1Q13, an increase of 50.8% year over year, and up 3.2% quarter over quarter.
• Revenues from China-based customers contributed 38.6% of overall revenue in 1Q13, compared to 32.5% in 1Q12 and 34.8% in 4Q12.
• Gross margin was 20.4% in 1Q13, compared to 12.0% in 1Q12 and 19.9% in 4Q12.
• Net income attributable to SMIC was $40.6 million in 1Q13, compared to net loss of $42.8 million in 1Q12 and net income of $46.6 million in 4Q12.

Second Quarter 2013 Guidance:

The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below.

• Revenue is expected to increase between 3% to 5% quarter over quarter.
• Gross margin is expected to range from 20% to 22%.
• Expenses from continuing operations excluding the effect of foreign exchange and government R&D grants are expected to range from $85 million to $88 million.

Dr. Tzu-Yin Chiu, SMIC's Chief Executive Officer and Executive Director, commented, "I am very pleased to report that SMIC has again achieved record high revenue of $501.6 million in the first quarter of 2013, representing year over year growth of 50.8%. In addition, revenue from our China-based customers grew 14.5% sequentially and 79.1% year-over-year, contributing 38.6% of total revenue in the first quarter of 2013, an all-time high. Income attributable to SMIC was $40.6 million in 1Q 2013 compared to a loss of $42.8 million in 1Q 2012. Despite the normal seasonally slow fourth and first quarters, we achieved five consecutive quarters of revenue growth and four consecutive quarters of net profit.

"40/45nm revenue contribution more than doubled to 6.4% compared to 2.6% wafer revenue in the fourth quarter of 2012. This increase was mainly driven by higher demand for mobile products from both U.S. and China-based customers. Along the same line, our 28nm advanced development, for both HKMG and PolySiON processes, continues to be on track and are targeted to be ready by the fourth quarter of 2013.

"We currently expect 2Q 2013 to continue to grow 3% to 5% sequentially, which means SMIC would achieve 6 consecutive quarters of growth. Our growth driver in 2013 will continue to be 40/45nm process, servicing primarily mobile related applications, as well as the strong demand from China.

"I'd like to reiterate that we will continue to focus on sustainable profitability, growth, and shareholder value."

Conference Call / Webcast Announcement

Date: April 25, 2013

Time: 8:30 a.m. Shanghai

 time

Dial-in numbers and

 pass code:

United States 1-718-354-1231  (Pass code: SMIC)

Hong Kong     852-2475-0994   (Pass code: SMIC)

China         86-80-0819-0121 (Pass code: SMIC)

Taiwan        886-2-2650-7825 (Pass code: SMIC)

The call will be webcast live with audio at http://www.smics.com/eng/investors/ir_presentations.php, or at http://www.media-server.com/m/p/se33etcs.

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) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in mainland China, providing integrated circuit (IC) foundry and technology services at 0.35-micron to 40-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm mega-fab in Shanghai, a 300mm mega-fab in Beijing, a 200mm fab in Tianjin, and a 200mm fab project under development in Shenzhen. SMIC also has customer service and marketing offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.

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

Safe Harbor Statements

(Under the Private Securities Litigation Reform Act of 1995)

This press release contains, in addition to historical information, "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements under "Second Quarter 2013 Guidance", the statement regarding our expectation that both HKMG and PolySiON processes will be ready by the fourth quarter of 2013, and the statement regarding our expectation that our 2Q 2013 revenue will continue to grow 3% to 5% sequentially, are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with the global economic slowdown, orders or judgments from pending litigation and financial stability in end markets.

Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its annual report on 20-F filed with the SEC on April 15, 2013, especially the consolidated financial statements, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited ("SEHK") from time to time, including current reports on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as may be required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact:

Investor Relations
+86-21-3861-0000 ext. 12804
ir@smics.com

Summary of First Quarter 2013 Operating Results

  Amounts in US$ thousands, except for EPS and operating data

                                 1Q13           4Q12((3))           QoQ        1Q12           YoY

                                 ----

Revenue                                501,609             485,894        3.2%       332,711       50.8%

Cost of sales                         (399,471)           (389,127)       2.7%      (292,867)      36.4%

                                      --------            --------                  --------

Gross profit                           102,138              96,767        5.6%        39,844      156.3%

Expenses from continuing               (71,065)            (64,742)       9.8%       (90,127)     -21.2%

  operations

Total other income (loss), net          11,975              17,072      -29.9%        (3,960)         -

                                        ------              ------                    ------

Profit (loss) before tax                43,048              49,097      -12.3%       (54,243)         -

Income tax (expenses) benefit           (2,536)             (2,665)      -4.8%        11,418          -

                                        ------              ------                    ------

Profit (loss) for the period            40,512              46,432      -12.7%       (42,825)         -

Other comprehensive income:

Exchange differences on                     43                  (2)         -             44       -2.3%

  translating foreign operations

Total comprehensive income              40,555              46,430      -12.7%       (42,781)         -

  (expense) for the period

Income (loss) attributable to           40,604              46,570      -12.8%       (42,825)         -

  SMIC

Gross margin                              20.4%               19.9%         -           12.0%         -

Earnings (loss) per ordinary              0.00                0.00          -          (0.00)         -

share (basic and diluted)((1))

Earnings (loss) per ADS (basic            0.06                0.07          -          (0.08)         -

and diluted)

Wafers shipped (in 8"                  631,776             608,372        3.8%       445,689       41.8%

equivalent wafers)

Capacity utilization((2))                 89.0%               90.5%         -           74.1%         -

------------------------                  ----                ----        ---           ----        ---

Note:

(1)   Based on weighted average ordinary shares of 32,014million (basic) and 32,182million (diluted) in

       1Q13, 31,997million (basic) and 32,044 million (diluted) in 4Q12, and 27,504 million (basic) and

       27,504 million (diluted) in 1Q12.

(2)   Based on total equivalent wafers out divided by estimated total quarterly capacity.

(3)   Revised from Q4 earnings release to reflect the reversal of US$6.9million land appreciation tax provision

        relating to disposal of employees' living quarters as a result of finalization of tax filing after the earning

        release,  but before the issuance of the 2012 consolidated financial statements.

• Revenue increased to $501.6 million in 1Q13, up 3.2% QoQ from $485.9 million in 4Q12, mainly due to the increase of 40/45nm wafer shipments.
• Cost of sales increased to $399.5 million in 1Q13, an increase of 2.7% QoQ from $389.1 million in 4Q12, mainly due to an increase in wafer shipments.
• Gross profit was $102.1 million in 1Q13, an increase of 5.6% QoQ from $96.8 million in 4Q12.
• Gross margin was 20.4% in 1Q13, up from 19.9% in 4Q12 primarily due to lower shipments from Wuhan Xinxin, which had a lower gross margin.
• Expenses from continuing operations increased to $71.1 million in 1Q13, an increase of 9.8% QoQ from $64.7 million in 4Q12, mainly due to the reasons stated in Expenses from Continuing Operations Analysis.

   Analysis of Revenue

Revenue Analysis

By Application                        1Q13       4Q12       1Q12

--------------                        ----       ----       ----

Computer                                    1.3%       1.0%       3.2%

Communications                             47.3%      47.4%      48.3%

Consumer                                   42.5%      42.6%      40.2%

Others                                      8.9%       9.0%       8.3%

By Service Type                       1Q13       4Q12       1Q12

---------------                       ----       ----       ----

Wafers                                     94.1%      94.0%      94.4%

Mask making, testing, others                5.9%       6.0%       5.6%

By Customer Type                      1Q13       4Q12       1Q12

----------------                      ----       ----       ----

Fabless semiconductor companies            88.7%      86.6%      91.4%

Integrated device manufacturers (IDM)       6.1%       9.3%       5.0%

System companies and others                 5.2%       4.1%       3.6%

By Geography                          1Q13       4Q12       1Q12

------------                          ----       ----       ----

North America                              51.4%      54.4%      55.2%

China((1))                                 38.6%      34.8%      32.5%

Eurasia((2))                               10.0%      10.8%      12.3%

Wafer Revenue Analysis

----------------------

By Technology (logic, memory only)    1Q13       4Q12       1Q12

---------------------------------     ----       ----       ----

40/45mnm                                    6.4%       2.6%       0.3%

55/65mnm                                   32.1%      35.3%      22.3%

90mnm                                       6.7%       8.0%       8.6%

0.13 um                                    10.7%      10.2%      22.7%

0.15/0.18mum                               39.9%      39.9%      39.4%

0.25/0.35    um                             4.2%       4.0%       6.7%

---------------                             ---        ---        ---

Note:

(1) Including Hong Kong, but

 excluding Taiwan

(2) Excluding China

   Capacity*

Fab / (Wafer Size)                            1Q13                    4Q12

Shanghai Mega Fab (8")                      90,000                  90,000

Shanghai 12-inch Fab (12")                  14,150                  13,500

Beijing Mega Fab (12")                      81,000                  78,750

Tianjin Fab (8")                            34,450                  37,000

Total monthly wafer

 fabrication capacity                      219,600                 219,250

---------------------                      -------                 -------

Note:

* Wafers per month at the end of the period in 8" equivalent wafers, calculated on a 30-day basis for comparison purposes

• Capacity increased to 219,600 8-inch equivalent wafers in 1Q13 from 219,250 8-inch equivalent wafers in 4Q12, primarily due to product mix change in our Tianjin fab and improved efficiency in our Beijing and Shanghai 12-inch fabs.

  Shipment and Utilization  

8"

 equivalent

 wafers        1Q13          4Q12          QoQ      1Q12          YoY

Wafer

 shipments

 including

 copper

 interconnects      631,776       608,372      3.8%      445,689      41.8%

 Utilization

 rate((1))             89.0%         90.5%       -          74.1%        -

 -----------           ----          ----      ---          ----       ---

Note:

(1)  Based on total

 equivalent wafers out

 divided by estimated total

 quarterly capacity.

  Detailed Financial Analysis

       Gross Profit Analysis

Amounts in

 US$

 thousands       1Q13          4Q12          QoQ       1Q12          YoY

Cost of sales         399,471       389,127       2.7%      292,867       36.4%

  Depreciation        127,339       112,290      13.4%      106,317       19.8%

  Other

   manufacturing

   costs              271,687       276,367      -1.7%      186,254       45.9%

  Share-based

   compensation           445           470      -5.3%          296       50.3%

Gross profit          102,138        96,767       5.6%       39,844      156.3%

Gross margin             20.4%         19.9%        -          12.0%         -

------------             ----          ----       ---          ----        ---

• Cost of sales increased to $399.5 million in 1Q13, an increase of 2.7% QoQ from $389.1 million in 4Q12, mainly due to the increase in wafer shipments.
• Depreciation within the cost of sales increased in 1Q13 relative to 4Q12 primarily due to lower utilization of our Beijing fab.
• Gross profit was $102.1 million in 1Q13, an increase of 5.6% QoQ from $96.8 million in 4Q12.
• Gross margin was 20.4% in 1Q13, up from 19.9% in 4Q12 primarily due to lower shipments from Wuhan Xinxin which had a lower gross margin.

       Expenses from Continuing Operations Analysis

Amounts in US$

 thousands        1Q13        4Q12        QoQ        1Q12        YoY

Total expenses

 from

 continuing            71,065      64,742       9.8%      90,127     -21.2%

  operations

  Research and

   development         23,408      26,677     -12.3%      59,311     -60.5%

  General and

   administrative      39,783      29,436      35.2%      23,924      66.3%

  Selling and

   marketing            7,874       8,629      -8.7%       6,892      14.2%

  -----------           -----       -----      ----        -----      ----

• R&D expenses decreased to $23.4 million in 1Q13, down 12.3% QoQ from $26.7 million in 4Q12 mainly due to lower usage of wafers and masks for our R&D activities.
• General and administrative expenses increased to $39.8 million in 1Q13, up 35.2% QoQ from $29.4 million in 4Q12, mainly due to the employee bonus accrual and the recovery of bad debt in 4Q12.

       Total Other Income (Loss), Net

Amounts

 in US$

 thousands    1Q13          4Q12          QoQ        1Q12         YoY

Total

 other

 income

 (loss),

 net                11,975        17,072      -29.9%      (3,960)          -

Finance

 costs             (10,850)      (10,449)       3.8%      (7,687)       41.1%

 Interest

 income              1,352         1,276        6.0%       1,199        12.8%

Other

 income

 or

 expenses           (1,366)        2,125          -        1,763           -

  Other

   gains

   or

   losses           22,393        24,016       -6.8%         392      5612.5%

  Share

   of

   profits

   of

   associates          446           104      328.8%         373        19.6%

  -----------          ---           ---      -----          ---        ----

Other gains or losses include mostly the gain arising from the disposal of part of the living quarters in Shanghai.

       Depreciation and Amortization

Amounts in

 US$

 thousands    1Q13         4Q12         QoQ       1Q12         YoY

----------    ----         ----         ---       ----         ---

Deprecation

 and

 amortization      135,752      140,021     -3.0%      142,888     -5.0%

-------------      -------      -------     ----       -------     ----

       Liquidity  

Amounts in US$ thousands         1Q13      4Q12

Cash and bank balances        292,932   358,490

Restricted cash               185,031   217,603

Other financial assets          1,239    18,730

Trade and other receivables   355,293   328,211

Prepaid operating expenses     51,061    46,986

Inventories                   284,653   295,728

Assets classified as held-

 for-sale                       1,428     4,239

Total current assets        1,171,637 1,269,987

Current tax liabilities            60     2,321

Other financial liabilities         8        25

Promissory notes               29,582    29,374

Accrued liabilities            73,696    84,611

Borrowings                    529,440   567,803

Trade and other payables      459,235   423,952

Total current liabilities   1,092,021 1,108,086

Cash Ratio                       0.3x      0.3x

Quick Ratio                      0.8x      0.9x

Current Ratio                    1.1x      1.1x

-------------                    ----      ----

      Capital Structure

Amounts in US$ thousands            1Q13            4Q12

Cash and cash equivalents                  292,932         358,490

Restricted cash                            185,031         217,603

Current portion of promissory notes         29,582          29,374

Short-term borrowings                      529,440         567,803

Long-term debt                             429,000         528,612

Total debt                                 958,440       1,096,415

Equity(1)                                2,319,036       2,276,452

Total debt to equity ratio(2)                 41.3%           48.2%

----------------------------                  ----            ----

Note:

(1)    Including portion of

 noncontrolling interest.

(2)    Total debt divided by equity,

 total debt including short-term

 borrowings and long-term debt.

Cash and cash equivalents decreased to $292.9 million in 1Q13, down 18.3% QoQ from $358.5 million in 4Q12 primarily because the Company used the cash on hand to retire some of the bank borrowings.

      Cash Flow

Amounts in US$ thousands     1Q13           4Q12

Net cash generated from

 operating activities              154,638       183,799

Net cash used in investing

 activities                        (82,628)      (74,719)

Net cash (used in) generated

 from financing activities        (137,503)       17,835

Effect of exchange rate

 changes                               (65)         (210)

Net change in cash                 (65,558)      126,705

------------------                 -------       -------

Capex Summary

• Capital expenditures for 2013Q1 were $184.7 million.
• The Company has increased the planned 2013 capital expenditures for foundry operations by $75 million to $675 million. The additional capital expenditures will be used for the expansion of our Shanghai 12-inch fab to meet the customer demand for our 40/45 nm capacity.

Recent Highlights and Announcements

• SMIC Donates 2 Million Chinese Yuan to Fund Liver Transplants for Disadvantaged Children  (2013-04-12)
• Notification of Board Meeting (2013-04-03)
• Announcement of 2012 Annual Results (2013-03-25)
• Update on Major Transaction in Relation to Establishment of a Joint Venture with Hubei Science & Technology Investment Group Co., Ltd. (2013-03-25)
• Notification of Approval of the Publication of 2012 Annual Results by the Board (2013-03-13)
• SMIC CEO TY Chiu Re-Elected to GSA Board (2013-03-13)
• Resignation of Chief Business Officer  (2013-02-28)
• SMIC Reports Unaudited Results for the Three Months Ended December 31, 2012  (2013-02-06)
• SMIC Added to Ocean Tomo 300 Patent Index  (2013-02-01)
• Kilopass NVM IP Achieves JEDEC Qualification on High-Demand SMIC 65/55/40nm Processes  (2013-01-31)
• Notification of Board Meeting  (2013-01-09)
• SMIC Selected Again for Hang Seng Corporate Sustainability Index Series (2013-01-07)

Please visit SMIC's website at http://www.smics.com/eng/press/press_releases.php and http://www.smics.com/eng/investors/ir_filings.php
for further details regarding the recent announcements.