China's TechFaith Wireless Technology has announced plans to invest US$70 million in the development of a 10 million-unit capacity smartphone production line in the Beijing Economic and Technological Development Area. The subsidiary company will focus primarily on the production of QIGI's smartphones as well as supporting TechFaith's ODP business.

The construction and full ramp-up of the production facility is expected to be completed over the next five years.

The state-owned Beijing E-town International Investment and Development ("BEID") has contributed US$30 million in funding for the development. According to the convertible bond purchase agreement, BEID will be allowed to convert its interest in the convertible bond into TechFaith's ordinary shares over the next 5 years.

Mr. Defu Dong, Chairman and CEO of TechFaith, said, "We highly value the confidence and trust BEID has expressed in TechFaith. We share the same goal of expansion and technology development. This new capacity will give TechFaith a growth platform to meet the expected demand growth due to the fast increase in smartphone users worldwide. QIGI's fast growth is in line with our expectations and we expect our smartphone business to become one of our major business segments. Given the extensive opportunities, we also plan to launch the QIGI brand and products in Russia and South East Asia due to their close geographic proximity with China. In addition, the new production capabilities will be able to support the stable growth of our ODP business."