techfaith a handset original developed product (odp) provider

(Nasdaq: CNTF)HK000KRB

TechFaith

A Handset Original Developed Product (ODP)

Provider

Mar 2008


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 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 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.


Contents

Industry Evolution

Unique ODP Provider

Product Development Status

Customer Base

Appendix


Top Five Brands

JapaneseBrands

ChineseBrands

EuropeanBrands

CarrierBrands

NicheBrands

Local Brands

PremiumBrands

1980 － 19951995 － 19982006 － 20072000 － 20051998 － 20002008 － Future

Global Handset Players Get More Diversified2008 - Future


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 20102002 2007


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.


Contents

Industry Evolution

Unique ODP Provider


Customer Base

Appendix


CustomerBrandOwner

Total Handset Software & Design Solutions

Drivers onDifferent

OS

Frame workAPI

MMI:Specific

Features forDifferentOperators

U IMMI:

Common Features

Hardware Design

Industrial Design/Mechanical Design

ApplicationSoftware

TechFaith owns customer relationship

EMS is available for production if brand owner outsourcesmanufacturing

EMSProduction

Line

Chipset


MMI:Specific

Features forDifferentOperators Customer

BrandOwner

UI

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

EMSProduction

Line

Industrial Design/Mechanical Design

Drivers on

Different OS

FrameWorkAPI

MMI:CommonFeatures

ApplicationSoftware

Chipset

Hardware Design

Single Chipset Solution

No product differentiation Low entry barrier (low margin)Single chipset solution providers only offer GSM/GPRS/EDGE


Cutting-Edge Technology Alliances

Strategic partner to develop Smartphone technology

Enabler of CDMA technology

Strategic investor

Collaborative founding “TechSoft”


Application Software Co. -Jointly Invested by Qualcomm in May ’06First 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 gameservice, 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 GameBusiness Unit Founded in Q1’08

Company Profile – NASDAQ: CNTF

Project based business

Revenue mainly from NRE

Share the volume business via Royaltyincome

Volume based business


Contents

Industry Evolution

Unique ODP Provider


Customer Base

Appendix


170Feature Phone

Gross Margin > 20%

45

58

Smartphone & PPC PhoneGross Margin > 25%

Low TierGross 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


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

3520

Unit: US$


Product Portfolio with Advanced Technology

Feature PhoneMultimedia Game

MID (Windows XP)

Windows GoogleMobile

GSM

CDMA

WCDMA

HSDPA

TD-SCDMA

Patented

General

UniqueGSM/CDMA

GSM/GSM

WCDMA/GSM

WCDMA/CDMA

GSM/TD-SCDMA


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 CDMAT7620

GSM WCDMATwins

Cynthia 850Gallic

GSM GSM

CDMA WCDMA GSM TD-SCDMA


HSDPA Data/Voice Card- Pike

Band: HSDPA2100/GPRS10/GSM900/DCS1800/PCS1900MHzLCD: 0.8’’ OLEDEntertainments: Modem /MP3 AAC /AAC+Size: 98*36*16mm/ 56gPatent: Industry Design authorized in China, Eastern Europe and Japan


Slider Qwerty

GPS HSDPA PPC - Bono

Platform: Marvell Bulverde270 ( 520 MHz ) +Qualcomm 6280

LCD: 3.0” WVGA TFT Touch panel

Patent: Window Based Touch Screen Split


HSDPA PPC - Fox H

Platform: Marvell Bulverde 270 ( 520 MHz )+ Qualcomm 6280

LCD: 2.5” QVGA TFT, touch panel

Patent: 3D UI Interface


Contents

Industry Evolution

Unique ODP Provider


Customer Base

Appendix

HK000KRBHK000J5S21

Russia

China JapanTaiwan

Indonesia

India

Brazil

United StatesEgypt

UkraineEurope

MalaysiaVietnamThailand

South Korea

United Arab Emirates

Worldwide Market Coverage

Turkey

Saudi ArabiaMorocco

Algeria

Canada

Libya

Yemen

KenyaNigeria


Africa

Europe Russia

North America

Latin America ChinaSouth East Asia

IndiaMiddle EastAfrica

TechFaith’s Worldwide Customers & Prospects


Contents

Industry Evolution

Unique ODP Provider


Customer Base

Appendix

HK000KRB

TD-SCDMA UpdateTD-SCDMA Update


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-costHSUPA (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


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.

HK000KRB

Key Component SuppliersKey Component Suppliers


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: SiRFFinger Print Recognition Suppler: Atrua


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

Maintain Sustainable Profitability

techfaith a handset original developed product (odp) provider

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