Semiconductor Manufacturing International Corporation

Semiconductor Manufacturing International Corporation
中芯國際集成電路製造有限公司

Type	Public
Traded as	NYSE: SMI, SEHK: 0981
Industry	Semiconductor
Founded	2000
Founder(s)	Dr. Richard Chang
Headquarters	Shanghai, China (incorporated in Cayman Islands)
Key people	Dr. Tzu-Yin Chiu (CEO)
Revenue	US$1.7 billion (2012)
Operating income	US$36.5 million (2012)
Net income	US$15.9 million (2012)
Employees	9,424 (at 30 April 2011)
Website	smics.com

Semiconductor Manufacturing International Corporation (SMIC) is a semiconductor foundry company headquartered in Shanghai, China. It provides integrated circuit (IC) manufacturing services on 350 nm to 40 nm process technologies. SMIC has wafer fabrication sites throughout mainland China, offices in the United States, Italy, Japan, and Taiwan, and a representative office in Hong Kong. Notable customers include Qualcomm, Broadcom, and Texas Instruments.^[1]^[2]^[3]

1 History
- 1.1 Litigation with TSMC
2 Locations
- 2.1 Wafer fabs
- 2.2 Offices
3 Corporate social responsibility
4 See also
5 References
6 External links

[edit] History

SMIC was founded in 2000 by Richard Chang (Traditional Chinese: 張汝京), a Taiwanese-American entrepreneur who had previously worked at Texas Instruments and Taiwan Semiconductor Manufacturing Corporation (TSMC). Under Chang’s leadership, SMIC built its first fab in the Zhangjiang Hi-Tech Park in Shanghai, China, and subsequently expanded its manufacturing operations to other cities in mainland China. SMIC is currently the largest and most advanced semiconductor foundry in mainland China. The company was listed on the SEHK and New York Stock Exchange in 2004.

In October 2007, the United States Government enrolled SMIC in its Validated End User (VEU) program as a trusted customer of regulated U.S. technology, thereby reducing many of the export control barriers for SMIC.^[4]

In early 2009, Harvard Business School wrote a case study on SMIC's business model, characterized as a Reverse Build-Operate-Transfer (BOT). The case study found that SMIC is executing a strategy that leverages the desires of municipalities in China to build clusters of high technology companies. By partnering with those cities to build new semiconductor fabs that SMIC would then operate under contract, the company could build scale without necessarily confronting immediate large capital outlays. Unlike the Build-Operate-Transfer model that some municipalities were using to build infrastructure like the new subway in Shenzhen, in the SMIC "Reverse BOT model" a municipality would build a capital intensive fab and SMIC would operate it, sharply lowering its capital costs. This model gave the company a unique level of flexibility in an industry where capital costs were the major driver of product costs.^[5]

In November 2009, Richard Chang resigned as CEO and was replaced by David N.K. Wang (Traditional Chinese: 王寧國), a former executive of Hua Hong (Group) Co., Ltd. and Applied Materials.^[6] Wang served until 2011, when he resigned and Tzu-Yin Chiu (Traditional Chinese: 邱慈雲), an experienced semiconductor industry executive, was appointed as CEO.^[7]

[edit] Litigation with TSMC

The company was the target of a lawsuit brought by TSMC, accusing SMIC of misappropriating TSMC intellectual property.^[8] The first round of litigation ended in 2005 with a $175 million settlement. A second round was opened in 2006. The liability phase of the lawsuit began on September 9, 2009 in Oakland, California,^[9] and the jury found SMIC liable on 61 out of 65 claims.^[10]

SMIC entered into a settlement agreement with TSMC to resolve all pending lawsuits between the parties, including the legal action filed by TSMC in California for which a verdict was returned by the jury against SMIC on November 4, 2009 and the legal action filed by SMIC in Beijing. SMIC and TSMC have entered into a settlement agreement on November 9, 2009 to settle and dismiss the California Case, including all claims and defenses of SMIC yet to be decided in that case and SMIC's appeal in the Beijing Case, thus concluding all pending court litigation between the parties.

Key provisions of the settlement include a mutual release of all claims that were or could have been brought in the pending lawsuits; termination of SMIC's obligation to make remaining payments under the prior settlement agreement between the parties (approximately US$40 million); payment to TSMC of an aggregate of US$200 million; and a grant to TSMC of approximately 8% of SMIC's issued share capital and a warrant which would allow TSMC to obtain total ownership of approximately 10% of SMIC's issued share capital.^[11]

[edit] Locations

[edit] Wafer fabs

Shanghai mega-fab: 300mm wafer fabrication facility (fab) and three 200mm wafer fabs
Beijing mega-fab: Two 300mm wafer fabs
Tianjin: 200mm wafer fab
Shenzhen: 200mm wafer fab (under construction)
Wuhan: 300mm wafer fab (owned by Wuhan Xinxin Semiconductor Manufacturing Corporation, managed and operated by SMIC)^[12]

[edit] Offices

SMIC has customer service and marketing offices in the U.S., Europe, Japan and Taiwan, and a representative office in Hong Kong.^[13]

[edit] Corporate social responsibility

SMIC is notable among Chinese companies for its accomplishments in developing the communities where it operates and serving the public interest through responsible business practices and charity.

[edit] Local community

SMIC provides low-cost housing to employees in its Living Quarters (LQ) in Shanghai, Beijing, Tianjin and Wuhan. Available in or near most of the LQs are restaurants, grocery stores, and shops, as well as a K-12 school, clinic, pharmacy, recreational facilities, and extracurricular education centers.^[14]

SMIC sponsors and encourages employee participation in local charitable activities, including social support for rural and migrant families, care for the elderly, and charity fundraiser fun runs.^[15]

[edit] SMIC Private School

Main article: SMIC Private School

SMIC also owns the SMIC Private School. The school's initial purpose was to provide low-cost private education for SMIC employees' children, but is now open to non-SMIC employees. The SMIC Private School offers lower-priced tuition than others in Shanghai while still providing an excellent international school education. SMIC Private School graduates have been accepted to schools such as Princeton University, Columbia University, Dartmouth College, Brown University, UC Berkeley, UCLA, Rice University, Amherst College, Williams College, Wellesley College, Middlebury College, Georgetown University, New York University, University of Michigan, University of Texas at Austin, and many others.^[16]

[edit] Employee Continuing Education

SMIC provides a continuing education program for its manufacturing assistants (MAs). MAs are encouraged to participate in preparatory courses for college entrance exams. With tuition grants provided by the company, MAs can receive their bachelor’s degrees.

[edit] Education in Rural China

SMIC employee-funded Enyou Foundation partnered with Project Hope to build Hope Schools in remote, poverty-stricken areas of China. SMIC staff and friends have supported Project Hope in many remote areas. Employees helped to build schools in the provinces of Gansu, Yunnan, Guizhou, Sichuan, Qinghai, and Xinjiang. In addition, solar energy installations as well as computers were donated. Many employees also joined the earthquake relief efforts in the aftermath of the 2008 Sichuan earthquake.

SMIC has also been involved in summer programs to bring teachers from rural areas of China to Shanghai to be taught modern teaching skills and methodology.