News Item #3: Commentary: What's next for troubled SMIC?

I came across a commentary titled "What's next for troubled SMIC?" in the Electronic Engineering Times on November 15, 2009.

The commentary is about China's Semiconductor Manufacturing International Corp. (SMIC) and points out how the company suffered three major setbacks. "On Tuesday (Nov. 10), it lost a big patent suit, its chief executive, and, in some respects, its independence".

It appears that the company was sued by the Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). "Under the terms, SMIC will pay TSMC $200 million plus SMIC stock and warrants. TSMC obtained 1,789,493,218 shares of SMIC, representing approximately 8 percent of SMIC. TSMC also obtained a warrant to subscribe for 695,914,030 shares of SMIC, which would allow TSMC to obtain total ownership of approximately 10 percent of SMIC". The commenter Mark LaPedus believes the organization has lost its independence and asks ifl TSMC will impose its will on SMIC? And over time, will TSMC buy SMIC--in an effort to expand into China?

The other setback was about the chief executive who resigned right after the settlement. SMIC has appointed veteran industry executive David N.K. Wang to replace Chang. However, others view the change in management as a positive thing. ''Shareholders have been very frustrated with SMIC's performance since IPO (in 2004), thus we believe the news will be interpreted positive,'' said Steven Pelayo,an analyst with HSBC.

The commenter also explains how the company's strategy is to emulate TSMC and offer a broad range of technologies. SMIC's process offerings include analog, CMOS, mixed-signal/RF, liquid crystal on silicon (LCoS), and MEMS technology. At one time, SMIC even offered a solar foundry process.

A lot of change has occurred to SMIC in the past week and I wonder how HR is dealing with it. I assume that change management practices will have to take place by keeping all employees aware of the changes and explain what those changes would mean to them, demonstration of job security if needed, and provide strategic thinking in ways to move forward with the organization.
For access to the full article, visit http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=221601153