MediaTek Inc (聯發科), the nation’s biggest handset chip designer, said yesterday that it had signed a memorandum of understanding (MOU) with Chinese modem chip designer AST Wireless (傲世通) to cooperate on developing chips supporting China’s home-grown TD-SCDMA technology.
The announcement came amid recent speculation that US rival Qualcomm Inc planned to acquire AST Wireless to make faster headway in developing TD-SCDMA handset chips.
MediaTek said the strategic partnership with AST Wireless will help enlarge its TD-SCDMA product portfolio to match rising demand for various end-user terminal devices, and that the deal will enhance the firm’s 3G-and-beyond technological capability, a press release said.
“Continuous technological innovation in the TD-SCDMA industry is one of the major factors driving MediaTek to the overall leading position,” MediaTek said.
The deal also involves China’s biggest mobile operator, China Mobile Ltd (中國移動), which plans to expand China’s 3G market, the Hsinchu-based mobile telephone chipmaker said.
“The deal will enable MediaTek to develop TD-SCDMA chips for China Mobile, better catering to the needs of the telecom company, because of close links between China Mobile and AST Wireless,” said Kenneth Lee (李克揚), a semiconductor analyst with Fubon Securities Investment Services Co (富邦投顧).
New 3G and smartphone chips would create business opportunities that can sustain the company’s growth for several yeas to come, Lee said. Lee reiterated a “buy” rating on MediaTek with a raised target price of NT$700.
In the initial stage, the new handset chips could account for 10 percent of MediaTek’s plans to ship up to 400 million chips this year, Lee said.
AST Wireless is a high-tech startup based in Suzhou and a developer of wireless terminal chipset solutions, according to the company’s Web site. Currently, it is focusing on developing 3.5G HSDPA technology and it plans to move to 3.9G or 4G technology.
China Mobile had more than 5 million TD-SCDMA subscribers at the end of last year, the telecoms operator said.
“The Laguna-U chipset is the successor of the industry’s first HSDPA chipset [Laguna], which was commercially used at the Beijing Olympic Games and can support HSDPA downlink up to 2.8Mbps,” the statement said. “The Laguna-U is now in mass production to support the large-scale commercialization of HSPA in 2010.”
Shares of MediaTek jumped 1.92 percent to NT$584 yesterday, beating the TAIEX, which edged up 0.81 percent.
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