Strategic Cooperation Agreement on TD-SCDMA Handset

December 16, 2005

Chongqing Chongyou Information Technology Co. Ltd (CQCYIT) and Shenzhen Putian Lingyun Electronics Co. Ltd (Putian Lingyun) agreed to cooperate on TD-SCDMA terminal research and development, production and marketing. The parties signed a strategic cooperation agreement on TD-SCDMA handsets.

Cooperation between the companies is based on the Tong Xin No. 1 chip with 0.13 um process. The companies will adopt the physical layer software, protocol stack software and other TD-SCDMA core technologies that CQCYIT owns. They plan to use Putian Lingyun's competitive advantage in capital, R&D, manufacturing, marketing network and production technology on communications terminals to jointly present a complete solution for TD-SCDMA terminals, along with plans for mass production of the terminals.

The TD-SCDMA Forum said the agreement will enable TD-SCDMA industrialization in the local Chongqing area and estimated the two sides will present the Tong Xin No.1 chip based TD-SCDMA terminal in early 2006 and gradually bring it to market.

Source: TD-SCDMA Forum.