SMIC Reports 2019 Third Quarter Result

SHANGHAI, Nov. 12, 2019 -- Semiconductor Manufacturing International Corporation (SEHK: 981; OTCQX: SMICY) ("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 September 30, 2019.

2019 third Quarter Highlights

• Revenue was $816.5 million in 3Q19, an increase of 3.2% QoQ from $790.9 million in 2Q19, compared to $850.7 million in 3Q18. Excluding the contribution from the Avezzano 200mm fab, revenue was $802.8 million in 3Q19, an increase of 6.1% QoQ from $756.6 million in 2Q19, compared to $799.6 million in 3Q18.
• Gross profit was $169.8 million in 3Q19, an increase of 12.3% QoQ from $151.2 million in 2Q19, compared to $174.5 million in 3Q18. Excluding the contribution from the Avezzano 200mm fab, gross profit was $169.3 million in 3Q19, an increase of 7.8% QoQ from $157.1 million in 2Q19, compared to $170.0 million in 3Q18.
• Gross margin was 20.8% in 3Q19, compared to 19.1% in 2Q19, 20.5% in 3Q18. Excluding the contribution from the Avezzano 200mm fab, gross margin was 21.1% in 3Q19, compared to 20.8% in 2Q19, 21.3% in 3Q18.

Fourth Quarter 2019 Guidance:

The following statements are forward looking statements based on current expectations and involved risks and uncertainties, some of which are set forth under "Forward-Looking Statements" below. The Company expects:

• Revenue to increase by 2% to 4% QoQ and to increase by 4% to 6% QoQ (excluding the contribution from the Avezzano 200mm fab).
• Gross margin to range from 23% to 25%.
• Non-IFRS operating expenses, excluding the effect of employee bonus accrual, government funding, impairment loss of tangible and intangible assets, gain or loss on the disposal of machinery and equipment, and gain from the disposal of living quarters, to range from $271 million to $277 million.
• Non-controlling interests of our majority-owned subsidiaries to range from positive $17 million to positive $19 million (losses to be borne by non-controlling interests).

Dr. Zhao Haijun and Dr. Liang Mong Song, SMIC's Co-Chief Executive Officers commented, "Over the past two years, we have not only narrowed the advanced technology gap, but also expanded comprehensive mature node technology platforms. We have confidence that with the wave of 5G applications, we will enter a new stage of development.

The Company's third quarter revenue exceeded guidance, as customer inventory digested, utilization rate increased, and advanced mask revenue rose. China-region customer demand was strong, contributing 60.5% to revenue in Q3 2019, a sequential increase of 10%. Consumer application revenue grew 16% quarter over quarter, with Internet of Things and smart home driving demand. We expect revenue in the fourth quarter will continue to grow.

FinFET technology development continues to push forward: the first generation of FinFET has already successfully begun mass production and will begin to contribute revenue in the fourth quarter; meanwhile, the development of second generation of FinFET is steady, and customer engagement is smooth. We believe that SMIC will benefit from the extensive business opportunities brought by the upcoming 5G product migration, and we will exit this period of transition and re-enter growth."

To see the complete results including financial tables, please click here:

http://www.smics.com/uploads/5dca7a67/2019 Q3 Earnings Release_ENG.pdf

Conference Call / Webcast Announcement

Date: November 13, 2019

Time: 8:30 a.m. Beijing time

Dial-in numbers:

The call will be webcast live with audio at:

http://www.smics.com/en/site/company_activity or https://edge.media-server.com/mmc/p/nz3ssas7.

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"; SEHK: 981; OTCQX: SMICY), one of the leading foundries in the world, is Mainland China's most advanced and largest foundry, 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 14 nanometer. Headquartered in Shanghai, China, SMIC has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab), a 200mm fab and a majority-owned joint-venture 300mm fab for advanced nodes (under construction) 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. SMIC also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan, China, and a representative office in Hong Kong, China.

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

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