SMIC has been managing these fabs - Cension Semiconductor Manufacturing International and Wuhan Xinxin Semiconductor Manufacturing Corp. Cension, based in Chengdu, China, are under the ownership of the Chengdu municipal government; and Wuhan Xinxin, based in Wuhan, China, is owned by the Wuhan municipal government. From now on SMIC will directly handle the sales of Cension and Wuhan Xinin, in an effort to be more connected to the customers.

It is possible that this move could be the first in the steps for preparing the fabs for sale eventually. Some sources say that SMIC is engaging in talks with TI regarding selling the 200-mm fab in Chengdu. In March, SMIC had revealed its plans to end the agreement whereby it manages this fab.

SMIC has also confirmed plans to receive a $100 million capital injection from, China’s Datang Telecom, which is one of its investors. This is a confirmation of what many in the industry were speculating about for some time now.

With these and other steps that have been taken recently, it looks like the company is finally moving out of the red, and slowly becoming profitable. A new CEO was named recently, labor was downsized and more efforts have been pumped into accelerating its advanced process technology efforts. It is on the technology front that SMIC seems to have been losing to its rivals. Others in the field have been ramping up their 45-/40-nm processes for a while now. SMIC also plans to do the same by the end of 2010 say sources.

The company has just posted its first quarterly profit in three years and doubled its capital spending. It is expected that expenditures will range from $700-to-$750 million. Sources say that fab capacity is completely sold out for the third quarter.