Spreadtrum Communications, a wireless chip designer based in Shanghai, China, has agreed to pay up to $76m for San Diego, California-based Quorum Systems, which designs CMOS radio frequency transceivers. The acquisition comes as speculation mounts in Hong Kong that China will soon announce 3G licenses.
Shares of China’s two major state-controlled fixed-line operator China Telecom and China Netcom rose sharply after the official Xinhua news agency quoted Xi Guohua, vice minister of China’s information industry ministry, as saying the government will grant fixed-line operators licenses for mobile telecom services at an early date.
Letting fixed-line operators into the mobile market when 3G licenses are issued is designed to increase competition. Spreadtrum is in a good position to benefit because it has been involved in the development of China’s own TD-SCDMA 3G standard.
Nasdaq-quoted Spreadtrum has moved into the backyard of Qualcomm, which has a dominant holding of IP in wireless communications.
However, Quorum is already in volume production of its single-chip CMOS RF transceivers for mobile handsets. Its CEO Dr Bernard Xavier said the company’s QS1000 chipset can extend talk time by 10% to 15% in GSM mode and 10% to 20% in EDGE mode. He said his company’s CMOS RF transceivers will complement Spreadtrum’s baseband technology and together they can make further inroads into the market.
China is now the world’s largest wireless market, with 487.4 million wireless subscribers as of April 2007.
Though tiny compared with other wireless chipset vendors, Spreadtrum is growing rapidly. In its third quarter to September 30, net income rose 64% to $3.7m on revenue up 44% at $26.7m.