Qualcomm Leverages CDMA Position in China - Page 2
Qualcomm is also investing directly in China and this week announced a $14 million round of financing for China-based phone designer Techfaith Wireless Communication Technology Ltd. The company will design phones based on Qualcomms CDMA2000 standard for improved voice traffic and higher data transfer rates. In a separate development, Qualcomm and Techfaith said theyve inked a licensing deal to manufacture data modem cards based on cdmaOne and CDMA2000 X/1xEV-DO wireless data communications standards. Qualcomm says it has completed testing of the 1xEV-DO Revision A standard, which supports peak data rates of 3.1 M bps on the forward link and 1.8 M bps on the reverse link. EV-DO is a 3G technology that allows for fast data transmission rates, and it is still unclear whether it will compete or coexist with Wi-Fi services.Qualcomm also said it is considering potential outsourcing options for its mobile phone chip sets, as its U.S.-based suppliers cant meet all the demand the company has from vendors worldwide. The biggest supply constraints for Qualcomm are for its lower-end chip sets, as demand for inexpensive mobile phones in less-developed countries grows at a rapid pace. Two Chinese semiconductor companies considered candidates for Qualcomms potential chip-making outsourcing contracts include Semiconductor Manufacturing International Corp. and Grace Semiconductor, both based in the Shanghai region. Qualcomm has said it expects to sell close to 14 million chip sets in China during the current fiscal year for sales of approximately $280 million. Last year, Qualcomm said it planned to invest up to $100 million in a variety of wireless businesses in China, and the company is expected to announce details of some of those awards in the very near future. Investment research analysts at Hilliard Lyons recently reiterated their "long term buy" rating on Qualcomm. Hilliard Lyons cited increased demand for Qualcomms chip sets, better-than-expected handset ASPs and robust performance of the CDMA market. Analysts said India and China are driving Qualcomms CDMA growth, and the companys future prospects hinge on acceptance of WCDMA technology.
"The cities of China have huge potential for use of sophisticated data and wireless multimedia services," Wang said.