[Chinas' largest design house, TechFaith, and NEC begin joint venture named STEP Technologies for designing NEC's 2.5G and 3G mobile handsets for the Chinese and global markets.]

Beijing and Tokyo -- TechFaith Holding Limited, the largest design house in China, and NEC Corporation, the leader in 3G mobile solution, today announced the commencement of a new joint venture company named STEP Technologies Co., Ltd. in Beijing. CEO: Liming Fan. STEP has 50 million RMB (about 6.5 million US$)in capital with 70% held by TechFaith and 30% by NEC. Plans are for STEP to employee 130 by end of March, 2004. The Chinese word used for the new company means the expansion and development of telecommunications industry in China and the creation of affluence.

The new company will design and develop NEC's state-of-the-art 2.5G and 3G mobile terminals for global market as well as unique and market-conscious mobile terminals for the Chinese market. By leveraging TechFaith's experience and know-how in Chinese mobile market and NEC's 3G and high-end mobile internet design and development capabilities, NEC aims to decrease the development time, enrich product line up and offer products speedily according to the market requirements.

Chinese market is the world's largest mobile market with an estimated 240 million subscribers, which is currently moving to 2.5 G mobile internet. To tap on the market potential, NEC has positioned China as an important center for its mobile business by pursuing R&D with Chinese partners, establishing global supply chain management center and CS (customer satisfaction) operations. Currently, NEC is strongly committed to 2.5G market in China and has been providing a variety of mid- to high-end terminals. NEC will introduce more than 10 products in China in this fiscal year and more than 30 for the next fiscal year.

"With the establishment of this new company and our competence in 3G field, NEC will further raise our presence in 3G market in China," said Noboru Yasue, Senior General Manager of Mobile Terminals Business Unit. "It is crucial for us to establish and strengthen our global design and development base in China. NEC will offer first and most advanced mobile terminals firstly in China with the broad prospective to introduce them to global market.

"This joint venture is an alliance of the power union with mutually complementary relation," TechFaith shows strong confidence to this joint venture. "TechFaith, as the largest design house in China, has long-standing experience and technological know-how in the Chinese mobile market. With the competences, TechFaith will contribute to NEC's mobile business not only in China but also globally. TechFaith believes the results from the new company will help promote 3G in China and realize the rapid introduction of 3G mobile handsets in the market."

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