Common use of Volume Adjustment Clause in Contracts

Volume Adjustment. 4.1 When the Margin according to any of the models referred to in Annex 1 of the Agreement is negative, then each Party shall have the right to adjust the wspm volume set forth on this Annex 2 of the respective negative Margin bearing Contract Product; provided that the Parties shall resume their obligations under the full Reserved Capacity as soon as the Margin becomes positive. 4.2 On a monthly basis, the Parties will discuss in good faith the extent and timing of a reduction in volume in accordance with Section 3.2.2 of the Agreement and taking into consideration Infineon’s then outstanding delivery obligations for Contract Products to its customers. Further, in no event shall the Reserved Capacity for 300mm Wafers be reduced below [***] wspm. 4.3 In addition, in order to prevent SMIC from requesting a wspm volume reduction, Infineon shall have the right to compensate SMIC for the lacking US Dollar amount which causes the Margin to become negative, in which case the then current wspm volume shall not be reduced. 4.4 The Parties acknowledge that the ongoing ramp up of the Reserved Capacity for 200mm Wafers, as of January 2004, has reached a volume of [***] wspm. SMIC agrees to increase the number of actual Wafer starts to said [***] Wafers from February 2004 on (“[***] Wafer In”). Only after [***] Wafer In have been reached, the wspm volume may again become subject to adjustment pursuant to this Section 4.