SAN FRANCISCO—Shares of Chinese chip foundry Semiconductor Manufacturing International Corp. (SMIC) ceased trading at the company's request Thursday (June 30) after SMIC reported that its chairman died and that the company's president and CEO failed to win re-election to its board of directors.
SMIC (Shanghai) said Jiang Shang Zhou, non-executive chairman of the company's board, passed away on June 27.
SMIC shareholders failed to re-elect David N.K. Wang, the company's president and CEO, in a vote at the company's annual general meeting Wednesday, SMIC said. Wang received the votes of less than 42 percent of SMIC's outstanding shares, fewer than the 50 percent needed to win reelection, SMIC said.
SMIC said it was considering the implications of Wang's failure to win relection and would make further announcements concerning any material developments. Wang is well known in the semiconductor industry for his long years of service at Applied Materials Inc.
With Zhou's passing, the company's two remaining non-executive directors, Tsuyoshi Kawanishi and Lip-Bu Tan, will be joined by a third non-executive director, Zhang Wenyi, who was appointed to the board June 20, effective June 30.
Zhou's death also leaves vacant a position on SMIC's audit committee. In accordance with the rules of the the Stock Exchange of Hong Kong Ltd., SMIC said it would appoint a new third member to its audit committee as soon as possible.
Zhou, who reportedly died of cancer at age 64, had been a director of SMIC since 2006 and was also chairman of the China Semiconductor Industry Association. He spent much of his life as a government official.
Other measures that would have given SMIC's board the power to issue, distribute and repurchase shares of the company were also defeated by shareholders at the company's annual meeting, SMIC said.
In February, SMIC reported a profit of $68.7 million for 2010, the first year it has posted a profit since it become a publicly traded company.