SMIC Reports 2013 Fourth Quarter Results

Capacity*

Fab / (Wafer Size)	4Q13	3Q13
Shanghai Mega Fab (8")	90,000	90,000
Shanghai 12-inch Fab (12")	27,000	24,750
Beijing Mega Fab (12")	81,000	81,000
Tianjin Fab (8")	36,000	36,000
Total monthly wafer fabrication capacity	234,000	231,750

Note:

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

Monthly capacity increased to 234,000 8-inch equivalent wafers in 4Q13 from 231,750 8-inch equivalent wafers in 3Q13, primarily due to the expansion of capacity in our Shanghai 12-inch fab.

Shipment and Utilization

8" equivalent wafers	4Q13	3Q13	QoQ	4Q12	YoY
Wafer shipments	601,602	653,090	-7.9%	608,372	-1.1%
Utilization rate⁽¹⁾	87.4%	88.2%	-	90.5%	-

Note: (1) Based on total equivalent wafers out divided by estimated total quarterly capacity.

Detailed Financial Analysis

Gross Profit Analysis

Cost of sales was $398.9 million in 4Q13, down 5.5 % QoQ from $422.3 million in 3Q13.
Depreciation within the cost of sales decreased to $113.3 million in 4Q13, compared to $126.4 million in 3Q13 mainly due to a decrease of wafer shipments in 4Q13.
Other manufacturing costs within the cost of sales decreased to $284.3 million in 4Q13, compared to $294.4 million in 3Q13.
Gross profit was $92.9 million in 4Q13, a decrease of 17.0 % QoQ from $112.0 million in 3Q13.
Gross margin was 18.9% in 4Q13, down from 21.0% in 3Q13 primarily due to product mix change, lower utilization and higher provision for customer claim in 4Q13.

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