Semiconductor Manufacturing International Corporation, the Shanghai-headquartered integrated circuit foundry, has announced that the company has signed a two-year strategic cooperative agreement with the Chinese telecommunications manufacturer Datang Holdings.

In November 2008, Datang Holdings invested USD171.8 million in common equity in SMIC for a 16.6% interest in the company for the new shares issued. Datang Holdings acquired 3,699 million new SMIC common shares at HKD0.36 per share.

According to SMIC, the investment will be completed on some conditions and one of these conditions is that the two sides should sign a strategic cooperative agreement before or upon the completion of the share allottment.

With the signing of this agreement, SMIC, whose core businesses covers IP design, will provide its research and development equipment and employees to assist Datang Holdings in developing advanced communication logic process technologies and an IP database, while Datang Holdings will provide the pilot verification products for the development of these technologies and the IP database.

At the same time, SMIC promises to give priority to ensuring Datang Holdings' OEM requirements while Datang Holdings will give priority to selecting SMIC as its foundry when the prices, techniques and services of SMIC can equal those of its competitors. Moreover, the two companies will cooperate in the development of the international market and the internationalization of both companies' businesses.

Finally, the two companies will team up to apply for national and local research projects in the integrated circuit sector.