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Global Economics

Chinese 3G Firm on Brink of Collapse

Commit, one of China's five TD-SCDMA chip developers, will be forced to shut down if it doesn't get a cash infusion

Shanghai-based TD-SCDMA chip firm Commit is on the brink of collapse and will close its doors this week if it doesn't find new cash.

The company, one of China's five TD-SCDMA chip developers, has not paid its staff for three months.

CEO Yu Yushu admitted last week the firm had run out of money and would shutter operations on April 30 if it can't raise more funds.

Commit's investors include state-owned vendors Putian and Datang Mobile, US chip-maker Texas Instruments, and handset-makers Nokia and LG.

Reportedly, the backers have been unable to agree on whether to continue supporting Commit. Nokia wanted to expand the capital base, but TI refused to pour in more cash and the two major Chinese shareholders have not made a decision.

The company was established in 2002 with paid-in capital of 233 million yuan ($30.3 million).

The impending failure is another setback in China's efforts to develop its own 3G technology. The delays in TD development mean Olympics visitors will be unable to have access to 3G services. China Mobile began the first commercial trial early this month with just 60,000 handsets.

Commit's collapse also leaves Nokia without a TD chip partner. Commit was the prime chip developer for the handset leader, which had said it would launch its first TD-SCDMA phones in mid-2008.

Provided by Telecom Asia—Copyright: © 2006 Questex Media Group, Inc. > All right reserved.

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