China Techfaith Wireless (NASDAQ:CNTF)

BEIJING, December 21, 2011 /PRNewswire-Asia/ -- China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) ("TechFaith" or the "Company") today announced today that it has received approval from the Shenyang Government for the acquisition of approximately 11.5 acres in Shenyang City's Shenbei New District. TechFaith's new facility will include integrated R&D, sales and distribution. The land contract is valued at approximately RMB 14.4 million (approximately US$2.3 million).

Shenyang, the capital of the Liaoning Province and the largest city in Northeastern China, is also one of China's premier centers for high technology and industrial development. Many top universities, including Northeastern University, Liaoning University and Shenyang Normal University, are located in Shenyang.

The new facility is part of a broader, major joint venture development project between TechFaith and the Shenyang PuHe New Town Administration Committee ("PuHe"). As part of the joint venture, TechFaith expects to invest approximately RMB 200 million (approximately US$31.5 million) over the next three years. PuHe will invest approximately RMB 40 million (US$6.3 million) in the joint venture development project and will also provide up to RMB 10 million (US$1.6 million) to TechFaith as an investment incentive. The joint venture entity will be 16.7% owned by PuHe and 83.3% owned by TechFatih.

Mr. Defu Dong, Chairman and CEO of TechFaith, said, "Being able to locate an integrated facility in such a prominent high technology and industrial center will give TechFaith an advantage when working with customers and partners, hiring top R&D and sales talent, and will enhance our profile with new customers. Importantly, our joint venture will allow us to expand our capabilities while remaining financially conservative. This means we will have the benefits of our expanded capacity when the industry resumes the growth portion of the current cycle, while continuing to maintain the strong balance sheet needed to support our ongoing growth and success."