Spreadtrum Communications, a Chinese fabless semiconductor provider, has invested US $10 million in Indian handset company, Micromax. By virtue of this investment, Spreadtrum will become one of Micromax’s preferred mobile chipset suppliers. According a press statement from the company, the two companies will work together through a joint R&D collaboration to deliver new offerings across Micromax’s portfolio of products. Micromax hopes to gain more marketshare following the collaboration which, according to the company, will support its objectives of feature customization to local needs, rapid time to market, and product development on value for money platforms.
Micromax currently ships more than 60 mobile handset models including dual-SIM feature phones and 3G Android smartphones, and has sales presence across India and in Hong Kong, Bangladesh, Nepal, Sri-Lanka, Maldives, UAE, Kingdom of Saudi Arabia, Kuwait, Qatar, Oman, Afghanistan and Brazil.
In July 2011, Micromax had withdrawn its Rs 426 crore proposed initial public offering, citing erratic market conditions. The company was planning to sell 10 % stake via public listings and had filed a red herring prospectus in September 2010. The company had plans to set-up a handset manufacturing facility in Tamil Nadu, utilising 50% of the proposed IPO’s proceeds, while it wanted to use the remaining amount for marketing and for acquisitions. According to reports, Micromax had said that it had decided to defer the proposed IPO to focus on product development, and would look at a public listing at a later time.
The company had last raised Rs. 200 crore ($43 million) from three investors – Sequoia Capital, Sandstone Capital LLC and Madison India Capital in September 2010. It had previously raised $45 million from TA Associates in late 2009.