SMIC Proposed Issue of US$450 Million Zero Coupon Convertible Bonds due 2022

SHANGHAI, June 8, 2016 /PRNewswire/ --Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981)

(1) PROPOSED ISSUE OF US$450 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2022

(2) PRE-EMPTIVE RIGHTS OF DATANG, COUNTRY HILL AND CHINA IC FUND

ISSUE OF THE PLACED BONDS

On 7 June 2016, the Company and the Manager entered into the Bond Subscription Agreement, pursuant to which the Manager has agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for the Placed Bonds to be issued by the Company in an aggregate principal amount of US$450 million.

Based on the initial Conversion Price of HK$0.9250 and assuming full conversion of the Placed Bonds at the initial Conversion Price, the Placed Bonds will be convertible into approximately 3,778,881,081 Shares, representing (i) approximately 8.96% of the issued share capital of the Company on the Last Trading Day and (ii) approximately 8.22% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares (assuming the full conversion of the Conversion Shares at the initial Conversion Price).

The Conversion Shares will be allotted and issued pursuant to the general mandate of the Company granted to the Directors at the annual general meeting held on 26 June 2015 and will rank pari passu in all respects with the Shares then in issue on the relevant conversion date. The issue of the Placed Bonds is not subject to the approval of the Shareholders.

An application will be made to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Conversion Shares. An application will be made to the Singapore Exchange for the listing of the Placed Bonds.

Completion of the Bond Subscription Agreement is subject to the satisfaction or waiver of the conditions precedent therein. In addition, the Bond Subscription Agreement may be terminated in certain circumstances. Please refer to the paragraph headed ''The Bond Subscription Agreement'' under the section ''Issue of the Placed Bonds'' below for further information.

POTENTIAL EXERCISE OF PRE-EMPTIVE RIGHTS OF DATANG

Reference is made to the Company's announcements dated 10 November 2008, 16 August 2010, 6 May 2011, 24 October 2013, 18 December 2013, 22 August 2014 and 12 June 2015 in relation to the Datang Subscription Agreement.

Pursuant to the Datang Subscription Agreement, in case of any issue of new Shares or securities convertible into Shares, subject to certain exceptions, Datang has a pre-emptive right to subscribe for a pro rata portion of such new securities being issued equivalent to the percentage of the issued share capital of the Company then owned by Datang immediately prior to the issue of such securities. Datang's pre-emptive right is applicable to the issue of the Placed Bonds, any China IC Fund Further Subscription and any Country Hill Further Subscription. Pursuant to the Datang Subscription Agreement, completion of any such issue of the Datang Pre-emptive Bonds to Datang upon exercise of its pre-emptive right will be further subject to the receipt of any required regulatory approvals.

The Company has notified Datang in accordance with the terms of the Datang Subscription Agreement in respect of the issue of the Placed Bonds and the possibility of the China IC Fund Further Subscription and the Country Hill Further Subscription. Pursuant to the Datang Subscription Agreement, Datang is deemed to have elected not to exercise the preemptive right with respect to the Datang Pre-emptive Bonds if it does not respond to the final notice within ten (10) business days following the date of the final notice. As at the date of this announcement, the Company has not been notified by Datang whether it intends to exercise its pre-emptive rights in relation to the proposed issue of the Placed Bonds.

PRE-EMPTIVE RIGHTS OF COUNTRY HILL

Reference is made to the Company's announcements dated 18 April 2011, 24 October 2013, 18 December 2013, 22 August 2014 and 12 June 2015 in relation to the Country Hill Subscription Agreement.

Pursuant to the Country Hill Subscription Agreement, in case of any issue of new Shares or securities convertible into Shares, subject to certain exceptions, Country Hill has a preemptive right to subscribe for a pro rata portion of such new securities being issued equivalent to the percentage of the issued share capital of the Company then owned by Country Hill immediately prior to the issue of such securities. Country Hill's pre-emptive right is applicable to the issue of the Placed Bonds, any Datang Further Subscription and any China IC Fund Further Subscription. Pursuant to the Country Hill Subscription Agreement, completion of any such issue of the Country Hill Pre-emptive Bonds to Country Hill upon exercise of its pre-emptive right will be further subject to the receipt of any required regulatory approvals.

The Company has notified Country Hill in accordance with the terms of the Country Hill Subscription Agreement in respect of the issue of the Placed Bonds and the possibility of the Datang Further Subscription and China IC Fund Subscription. Pursuant to the Country Hill Subscription Agreement, Country Hill is deemed to have elected not to exercise the preemptive right with respect to the Country Hill Pre-emptive Bonds if it does not respond to the final notice within ten (10) business days following the date of the final notice. As at the date of this announcement, the Company has not been notified by Country Hill whether it intends to exercise its pre-emptive rights in relation to the proposed issue of the Placed Bonds.

PRE-EMPTIVE RIGHTS OF CHINA IC FUND

Reference is made to the Company's announcements dated 12 February 2015 and 8 June 2015 in relation to the China IC Fund Subscription Agreement.

Pursuant to the China IC Fund Subscription Agreement, in case of any issue of new Shares or securities convertible into Shares, subject to certain exceptions, China IC Fund has a preemptive right to subscribe for a pro rata portion of such new securities being issued equivalent to the percentage of the issued share capital of the Company then owned by China IC Fund immediately prior to the issue of such securities. China IC Fund's preemptive right is applicable to the issue of the Placed Bonds, any Datang Further Subscription and any Country Hill Further Subscription. Pursuant to the China IC Fund Subscription Agreement, completion of any such issue of the China IC Fund Pre-emptive Bonds to China IC Fund upon exercise of its pre-emptive right will be further subject to the receipt of any required regulatory approvals.

The Company has notified China IC Fund in accordance with the terms of the China IC Fund Subscription Agreement in respect of the issue of the Placed Bonds and the possibility of the Datang Further Subscription and the Country Hill Further Subscription. Pursuant to the China IC Fund Subscription Agreement, China IC Fund is deemed to have elected not to exercise the pre-emptive right with respect to the China IC Fund Pre-emptive Bonds if it does not respond to the final notice within ten (10) business days following the date of the final notice. As at the date of this announcement, the Company has not been notified by China IC Fund whether it intends to exercise its pre-emptive rights in relation to the proposed issue of the Placed Bonds.

USE OF PROCEEDS

The gross proceeds from the Placed Bonds will be approximately US$450 million.

The net proceeds (net of fees, commissions and expenses) from the issue of the Placed Bonds will be approximately US$441 million.

The Company intends to use the net proceeds (net of fees, commissions and expenses) from the issue of the Placed Bonds for capital expenditure for capacity expansion and other general corporate purposes.

LISTING RULES IMPLICATIONS

The Conversion Shares will be issued pursuant to the general mandate granted to the Directors to allot and issue up to 20% of the issued share capital of the Company by the Shareholders of the Company passed at the annual general meeting held on 26 June 2015.

Shareholders and potential investors should note that the completion of the issue of the Placed Bonds are subject to the fulfilment of the conditions under the Bond Subscription Agreement. As the issue of the Placed Bonds may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

For the full details of this announcement please see the filing: http://www.smics.com/eng/investors/ir_filings.php

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. SMIC provides integrated circuit (IC) foundry and technology services at 0.35-micron to 28-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm mega-fab in Shanghai; a 300mm mega-fab and a majority owned 300mm fab for advance nodes in Beijing; and 200mm fabs in Tianjin and Shenzhen. 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.

Safe Harbor Statements

(Under the Private Securities Litigation Reform Act of 1995)

This document 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 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 are necessarily estimates reflecting the best judgment of SMIC's senior management and 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 cyclicality and market conditions in the semiconductor industry, intense competition, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity, financial stability in end markets and intensive intellectual property litigation in high tech industry.

In addition to the information contained in this document, you should also consider the information contained in our other filings with the SEC, including our annual report on Form 20-F filed with the SEC on April 25, 2016, especially in the "Risk Factors" section and such other documents that we may file with the SEC or SEHK from time to time, including on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on our future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this document 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 document.

CONTACT:
Investor Relations
+86-21-2081-2804
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SOURCE Semiconductor Manufacturing International Corporation

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