Spreadtrum Communications, Inc.’s (Spreadtrum’s) ADR achieved our target price on 27 March 2009 following a single day price appreciation of 88.4%, after the company announced on 26 March 2009 that Samsung Electronics Co., Ltd (Samsung) has selected Spreadtrum as a new chipset supplier. The company’s QS520 GSM/GPRS and QS1001 Enhanced Data rates for GSM Evolution (EDGE) transceivers have been incorporated into Samsung’s designs for mobile phone models for international shipment. Spreadtrum also indicated that it has commenced volume shipments of these two products to Samsung. We are encouraged by these recent developments and the growing popularity of TD-SCDMA services in China. We moderate the ADR from a BUY to a HOLD, although the current stock price no longer suggests a HOLD rating, partly reflecting our concerns regarding the delay in announcement of the 4Q 08 and FY 2008 results. We will reassess our target price and rating for the ADR (1 ADR = 3 common shares)1 after the company announces its 4Q 08 and FY 2008 results. We maintain our current BUY rating for the European stock as we continue to anticipate a significant positive currency impact on the European stock in the medium term. We will reassess the European stock (1 European stock = 3 common shares)1 rating for Spreadtrum after the company announces its 4Q 08 and FY 2008 results.

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