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Spreadtrum moves into WCDMA market

Posted: 19 Sep 2012 ?? ?Print Version ?Bookmark and Share

Keywords:fabless firm? WCDMA? TD-SCDMA?

Practically everyone developing applications processors for smartphones and media tablets-ranging from incumbents like MediaTek, Qualcomm and Marvell to startups such as Nufront, Rockchip and Allwinner-are investing heavily in software development. All are acing to sign up talented software engineers who can write code cheap.

Spreadtrum is right in the middle of this software battle. It now has more than 100 software developers at its Tianjin R&D center. The company also plans to use its future Chengdu R&D center (based on Spreadtrum's recent acquisition of Chengdu Traicio Co., a Wi-Fi chip company) for more software development.

That reflects the need to reduce its cost structure, which has become the name of the game for every Chinese fabless company.

Gao said the reason Texas Instruments, Freescale and Analog Devices all gave up on baseband development isn't just the commoditization of baseband chips. Rather, none was able to execute the development of a turnkey solution within a competitive cost structure.

In its second quarter this year, Spreadtrum said its gross margin was 37.1 percent, down from 38 percent from the previous quarter and 42 percent year-on-year. Will this drop further? During the earnings call in August, Gao said, "We believe that our gross margin has now stabilized with the increase in smartphone shipments."

- Junko Yoshida
??EE Times

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