SOURCE: China TechFaith

May 24, 2007 07:35 ET

TechFaith Announces Strategic Restructuring

BEIJING -- (MARKET WIRE) -- May 24, 2007 -- China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF), a handset application software and handset solution provider based in China, today announced a strategic restructuring designed to make the Company more competitive given the rapid changes in the design and ODM space. As part of the restructuring, TechFaith expects to reduce its workforce by approximately 400, leaving approximately 1,400 employees post-restructuring. The Company expects the actions will lower its operating expenses by at least US$2 million per quarter.

Defu Dong, TechFaith's Chairman and CEO, said, "Higher staffing levels required under our original business model are no longer necessary given customers' evolving needs and the resulting significant changes in our model. We have taken great care in making this decision to ensure that our existing and prospective customers will continue to benefit from the excellent engineering and technical support they have come to expect of TechFaith. Importantly, we believe this action will allow TechFaith to operate more effectively and efficiently, as we focus on returning TechFaith to a trajectory of sustainable, profitable revenue and earnings growth."

Noting the continued positive momentum in its Smartphone business and traction in its ODM business model, TechFaith reiterated prior guidance for the second quarter of 2007, for revenue to be in the range of US$32 million to US$35 million.

About TechFaith

TechFaith (NASDAQ: CNTF) is one of the largest handset application software and handset solution providers. Based in China, the Company employs approximately 1,886 professionals, of whom 90% are engineers. TechFaith's three business units are handset design, application software, and smartphone and pocket PC. With the capability of developing MMI / UI software on GSM/GPRS, CDMA1X, EVDO, WCDMA/UMTS, HSDPA and TD-SCDMA communication technologies, TechFaith is able to provide MMI/UI software packages that fulfill the specifications of handset brand owners and major global operators. Having a full range of wireless application software including WAP, Java, MMS, WWW browser, SyncML and DRM, TechFaith is also providing total solutions for upper layer software of handsets. In addition, TechFaith is developing smart phone software based on open operating systems including Linux and Windows Mobile, and capable of implementing high-end smart phones integrating Bluetooth, WiFi, high megapixel cameras, etc. based on different communication technologies according to special requirements of customers. For more information, please visit www.techfaithwireless.com.

Safe Harbor Statement

This announcement 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 of 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 operating 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 outlined in TechFaith's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. TechFaith does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Contact Information

  • CONTACTS:
    In China:
    Ms. Helen Zhang
    Tel: 86-10-5822-7390
    Email Contact

    In the U.S.:
    David Pasquale
    EVP
    The Ruth Group
    Tel:+646-536-7006
    Email Contact