TechFaith A Handset Original Developed Product (ODP) Provider Mar - - PowerPoint PPT Presentation

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TechFaith A Handset Original Developed Product (ODP) Provider Mar - - PowerPoint PPT Presentation

TechFaith A Handset Original Developed Product (ODP) Provider Mar 2008 (Nasdaq: CNTF) Page 1 HK000KRB Disclaimer This presentation contains forward-looking statements. These statements are made under the ''safe harbor'' provisions of the


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TechFaith A Handset Original Developed Product (ODP) Provider

Mar 2008

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Disclaimer

This presentation contains forward-looking statements. These statements are made under the ''safe harbor'' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as ''will,'' ''expects,'' ''anticipates,'' ''future,'' ''intends,'' ''plans,'' ''believes,'' ''estimates'' and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as TechFaith's strategic and operational plans, contain forward- looking statements. TechFaith may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about TechFaith's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number

  • f important factors could cause actual results to differ materially from those contained in any forward-

looking statement. Potential risks and uncertainties include, but are not limited to, TechFaith's limited

  • perating history, mobile handset brand owners' discontinuation or reduction of the use of independent

design houses, TechFaith's ability to retain existing or attract additional international customers, TechFaith's earnings or margin declines, failure of competing against new and existing competitors, and other risks

  • utlined in TechFaith's filings with the U.S. Securities and Exchange Commission, including its registration

statement on Form F-1, as amended. TechFaith does not undertake any obligation to update any forward- looking statement, except as required under applicable law.

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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Top Five Brands

Japanese Brands Chinese Brands European Brands Carrier Brands

Niche Brands

Local Brands Premium Brands

1980 - 1995 1995 - 1998 2006 - 2007 2000 - 2005 1998 - 2000 2008 - Future

Global Handset Players Get More Diversified

2008 - Future

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CDMA1X GSM/GPRS GSM/GPRS/EDGE TD-SCDMA WiMAX CDMA 2000/EVDO WCDMA HSDPA WiFi HSUPA

Wireless Standards and OS Get More Complicated

3G 2G/2.5G to 2.75G 3.5G/3.9G Mid-90s 2000 2005 2010 2002 2007

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Fast-Growth Opportunities for TechFaith

Small players are not capable of providing original

developed products;

Big players can not cover the Design of a full

spectrum of technologies from 2G to 3.5G;

Carriers are promoting their own services with

rich software applications;

Dual-mode handsets are in high demand by

carriers running two network systems or by international roamers.

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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Customer Brand Owner

Total Handset Software & Design Solutions

Drivers on Different OS Frame work API MMI: Specific Features for Different Operators U I

MMI: Common Features Hardware Design Industrial Design/Mechanical Design Application Software

TechFaith owns

customer relationship

EMS is available

for production if brand owner

  • utsources

manufacturing

EMS Production Line

Chipset

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MMI: Specific Features for Different Operators

Customer Brand Owner

UI

PCBA Common Practice: focusing on hardware design by using single chipset solution

EMS Production Line

Industrial Design/Mechanical Design

Drivers

  • n

Different OS Frame Work API

MMI: Common Features Application Software Chipset

Hardware Design Single Chipset Solution

  • No product differentiation
  • Low entry barrier (low margin)
  • Single chipset solution providers only offer GSM/GPRS/EDGE
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Cutting-Edge Technology Alliances

Strategic partner to develop Smartphone technology Enabler of CDMA technology Strategic investor Collaborative founding “TechSoft”

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Application Software Co. -

Jointly Invested by Qualcomm in May ’06

First Window’s

Smartphone in Sep ’06

First 3.5G HSDPA

Smartphone in Apr ’07

Volume based business Higher ASP from games

and other contents

Extra revenue from game

service, game terminals and UMPC

ODP & Content Provider 2008 Company Founded 2002 Independent Design House 2002-2005

Founded in July ’02 NASDAQ IPO in May ’05 First 3G WCDMA/UMTS

Handset in Oct ’05

Original Dev. Product (ODP) Provider 2006-2007

Interactive Game

Business Unit Founded in Q1’08

Company Profile – NASDAQ: CNTF

Project based business Revenue mainly from NRE Share the volume business via Royalty

income

Volume based business

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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170 Feature Phone Gross Margin > 20%

45 58

Smartphone & PPC Phone Gross Margin > 25% Low Tier Gross Margin > 10% 450

TechFaith’s Product Position

  • Focusing on Mid to High Tier

90 Cost Wholesale Price

50

Low Tier Middle High Tier

35 100 180 20 Unit: US$ 35

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170

45 58

CDMA1X Gross Margin 10%-40% HSDPA Gross Margin 20%-40 % GSM Gross Margin 10%-30% WCDMA Gross Margin 15%-30%

Low Tier Middle High Tier Cost Wholesale Price

50 450 35 100 180

90

TechFaith’s Product Position

  • Focusing on Mid to High Tier

35 20 Unit: US$

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Product Portfolio with Advanced Technology

Feature Phone Multimedia Game MID (Windows XP) Windows Google Mobile

GSM CDMA WCDMA HSDPA TD-SCDMA

Patented General Unique

GSM/CDMA GSM/GSM WCDMA/GSM WCDMA/CDMA GSM/TD-SCDMA

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GSM GSM PPC Phones

Launched

Technology Combinations in High Demand

Feature Phones

Q4’ 2007

Digo S26

Q1’ 2008

Twins Yin Tai

GSM CDMA GSM GSM GSM GSM

T7620+ T7630

GSM CDMA

T7620

GSM WCDMA

Twins Cynthia 850 Gallic

GSM GSM CDMA WCDMA GSM TD-SCDMA

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HSDPA Data/Voice Card- Pike

Band: HSDPA2100/GPRS10/GSM900/DCS1800/PCS1900MHz LCD: 0.8’’ OLED Entertainments: Modem /MP3 AAC /AAC+ Size: 98*36*16mm/ 56g Patent: Industry Design authorized in China, Eastern Europe and Japan

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Slider Qwerty GPS HSDPA PPC - Bono

Platform: Marvell Bulverde 270 ( 520 MHz ) + Qualcomm 6280 LCD: 3.0” WVGA TFT Touch panel Patent: Window Based Touch Screen Split

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HSDPA PPC - Fox H

Platform: Marvell Bulverde 270 ( 520 MHz ) + Qualcomm 6280 LCD: 2.5” QVGA TFT, touch panel Patent: 3D UI Interface

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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HK000KRB HK000J5S

21

Russia China Japan Taiwan Indonesia India Brazil United States Egypt Ukraine Europe Malaysia Vietnam Thailand South Korea United Arab Emirates

Worldwide Market Coverage

Turkey Saudi Arabia Morocco Algeria Canada Libya Yemen Kenya Nigeria

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Africa Europe Russia North America Latin America China South East Asia India Middle East Africa

TechFaith’s Worldwide Customers & Prospects

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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TD-SCDMA Update TD-SCDMA Update

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Q3/07 Q4/07 2009

Engineering Sample Mass Production

TD-SCDMA Product Road Map

TD/GSM AR + AH + EDGE HSDPA2.8M /GSM + AR +AH+EDGE Linux-based & One-chip Low-cost HSUPA (UMTS)

Engineering Sample Mass Production Mass Production CTA of Feature Phone & Data Card No.1 CNC Qingdao Field Testing Demonstration at PT/EXPO COMM CHINA 2007 Working Sample for MII Field Testing

Q1/08 Q3/08

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Development of TechFaith’s TD-SCDMA Projects

  • Two models of feature phone and one model of data card were shown to

the public in our customers’ name at PT/EXPO COMM CHINA 2007 from 23rd-27th Oct 2007.

  • Data card won CMCC bidding recently in one of our customers name.

Two models of feature phone are joining the CMCC bidding.

  • TechFaith has secured TD-SCDMA contracts for both data card and

feature phone from customers home and abroad, first shipment is expected in Q2 2008.

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Key Component Suppliers Key Component Suppliers

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Component Suppliers

PA Suppliers

(1) NXP Platform: RFMD and Skyworks. (2) Qualcomm Platform: Avogo and Anadigics (3) T3G: Maxim

LCD Suppliers

(1) Samsung SDI: 2.2 ", 2.4 " QVGA (2) Tovis: 1.8 " QCIF, 2.8" QVGA (3) Sharp: 1.8 " QQVGA, 2.6" WQVGA, 3.0" WVGA (4) CASC: 2.2 " QCIF, 2.4 " QVGA (5) TPO: 2.5 " QVGA landscape

GPS Supplier: SiRF Finger Print Recognition Suppler: Atrua

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ODP & ODC Business Models Allow TechFaith to Build Its Competitive Advantages, Achieve Fast Growth, and Maintain Sustainable Profitability

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