Spreadtrum acquires stake in MobilePeak Holdings

SHANGHAI, CHINA: Spreadtrum Communications Inc., a leading fabless semiconductor provider in China with advanced technology in both 2G and 3G wireless communications standards, announced that it has acquired approximately 48.44 percent of the total outstanding shares of MobilePeak Holdings Ltd, a privately held fabless semiconductor company based in Shanghai and San Diego that specializes in the design of highly integrated UMTS/HSPA+ modem chipsets.

Spreadtrum acquired approximately 48.44 percent of MobilePeak's total outstanding shares, and provided a short-term loan to MobilePeak for the repayment of MobilePeak's outstanding convertible bridge loans, for an aggregate cash consideration of approximately $32.58 million.

Spreadtrum intends to purchase all of MobilePeak's issued and outstanding shares, and expects to complete the acquisition in the third quarter of 2011. Thanks to MobilePeak's efficient operations, Spreadtrum expects the acquisition to have a minor impact on its earnings per share in Q2 and the remaining quarters in 2011, and Spreadtrum maintains its Q2 2011 guidance in terms of revenue, gross margin, and operating expenses as a percentage of revenue.

Spreadtrum's chairman, president and CEO, Dr. Leo Li, said: "We are very pleased and excited to welcome the MobilePeak team. The synergies between the two companies and the opportunities created by this transaction are clear. With MobilePeak's complete UMTS/HSPA+ solution, we will broaden our portfolio of worldwide wireless handset technologies, and make inroads into the WCDMA feature phone, smart phone and tablet markets.

"Utilizing our advanced 40nm technology, mature GSM/GPRS/EDGE and TD-SCDMA platforms, and working closely with MobilePeak's Shanghai and San Diego teams, we will be well equipped to expand our international market shares. These capabilities are also a solid foundation for developing the next generation multi-mode FDD-LTE/WCDMA and TDD-LTE/TD-SCDMA technologies over the next two years."

Qiuzhen (Joe) Zou, chairman and president of MobilePeak, said: "We are eager to work with the Spreadtrum team. Since MobilePeak's inception in 2005, our team has developed world-class baseband chipsets with support for 3GPP Standard through Release 7, including HSPA+ technology up to Category 14 with 21Mbps maximum downlink speed and 11Mbps maximum uplink speed. MobilePeak has more than 100 patents granted or pending worldwide, and its solutions have passed GCF tests and top-tier handset makers' strict in-house tests. We are confident to role out the first 40nm HSPA+ solution platform for feature phones and smart phones by 2012." Zou will assume the role of CTO at Spreadtrum.