* 58.2 pct shareholders vote against re-electing CEO David Wang to board
* SMIC chairman passed away on June 27
* Top management change likely - analysts
* SMIC shares suspended on Hong Kong stock exchange (Adds details, quotes)
By Melanie Lee
SHANGHAI, June 30 (Reuters) - China's Semiconductor Manufacturing International Corp may be in for a top management shakeup after shareholders voted its chief executive off its board and the death of its chairman this week.
SMIC, China's biggest contract chipmaker, said 58.2 percent of the shareholders voted against re-electing its Chief Executive David Wang to the board at a meeting on Wednesday.
Shares of the company were suspended on Thursday on the Hong Kong stock exchange. The stock has lost 6.6 percent so far this year, compared with a 2.8 percent fall in the Hang Seng Index .
"It seems unlikely to me that David would want to remain CEO if he can't also be a director so I imagine there is probably a big management shake-up going on right now," said Steven Pelayo, Regional Head of technology research at HSBC in Hong Kong.
Wang was hired in 2009 to replace SMIC's founder Richard Chang. With a strong industry background, Wang was tasked with turning around the company which faces stiff competition from Taiwanese rivals TSMC and UMC .
Analysts said the large swing of votes against re-electing Wang indicates that one or all of the major shareholders, such as government-owned Datang Telecom and China's sovereign wealth fund China Investment Corp, had voted against him.
China Investment Corp holds around 13 percent in SMIC via convertible preferred shares, analysts said.
"The company is considering the implications of the non-appointment of its executive director and will make further announcement(s) of any material developments," SMIC said in a regulatory filing.
On Tuesday, SMIC said its chairman Jiang Shangzhou had passed away.
SMIC said in March it plans to invest $12 billion on capacity expansion over the next five years as it aims to achieve sales of $5 billion by 2015.
"There being two (major) shareholders, one being a proxy to the government, Datang Telecom, and the other CIC, both of them choosing not to elect Wang means possibly there is enough scope to get someone else and push him out," said Hong Kong-based CLSA analyst Vaibhav Dhasmana.
Some analysts say SMIC would find it difficult to face the fierce competition from market leaders such as TSMC which have been quick in investing in the latest technologies and keeping costs down.
In the first quarter ended March, SMIC's revenue was $370.6 million, significantly smaller than TSMC's net sales of $3.6 billion and UMC's $956 million. Taiwan Semiconductor Manufacturing Co Ltd and United Microelectronics Corp are the world's top two contract chip makers. "I think there is enough bad news for SMIC from a fundamental business perspective. This is something that incrementally adds on negativity," Dhasmana said. (Additional reporting by Jimmy Tsim in HONG KONG; Editing by Kazunori Takada and Vinu Pilakkott)