REVENUE STRATEGY - SMIC

Chip sales in China, the world's biggest semiconductor market, may almost triple to $111 billion in 2011 from $39 billion in 2005 as more mobile-phones, computers and digital music players are made in the nation.

1. Semiconductor Manufacturing International Corp., China's biggest chipmaker, whose customers include Infineon Technologies AG and Elpida Memory Inc., is expanding to compete with bigger rival Taiwan Semiconductor Manufacturing Co., which is expanding its plant in Shanghai.
2. It agreed to buy as much as $1.86 billion of equipment from Applied Materials, Inc. and five other companies in the U.S. over the next three years. The equipment will be used to produce 300-millimeter silicon wafers at Semiconductor Manufacturing plants in China.
3. It signed agreements with KLA-Tencor Corp., the second-largest U.S. chip equipment maker, Axcelis Technologies, Inc., Novellus Systems, Inc., Lam Research Corp. and Varian Semiconductor Equipment Associates, Inc.

To sell more, produce more.
To produce more, buy more.
To buy more, sell more.
Or borrow.

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