SMIC - Chinese Semi Shares Drop on Sale Rumor

SHANGHAI, China (TheStreet) -- Shares of Chinese semiconductor firm Semiconductor Manufacturing International(SMI) were down on Wednesday after press reports that the semiconductor company was selling a wafer plant in Chengdu, the capital of Sichuab Province, to Texas Instruments(TXN).

Reuters reported the potential sale to Texas Instruments on Tuesday, and the Chinese business press reported on the planned sales also -- both citing anonymous sources close to the companies. More than 1 million shares of Semiconductor Manufacturing had been traded before midday on Wednesday. The Chinese semiconductor company's average daily volume of ADR shares traded is only 224,000.

Shares of Semiconductor Manufacturing were down 4.2% to $6.39 at midday Wednesday. Shares of Texas Instruments were trading close to flat.

The Chengdu plant is operating under an agreement with the local government, which owns the plant. The press reports did not specify whether Texas Instruments was planning to buy the plant from the Chinese government, or take over operations in an arrangement similar to Semiconductor Manufacturing International's existing arrangement.

Texas Instrument and Semiconductor Manufacturing officials declined to comment to the press.

At least...this explained the yesterday's price drop of 5cts. Then again with today's closed....of adding back 3 cts. Things maybe not so bad even with the planned sales of the above plant.

Btw...the US ADR now is up by 3+% to USD6.60 and with the positive job data out from US, can expect that the coming week should be a good trading week