EngagingChina

Spansion, the US-listed chipmaker, has struck a deal with Chinese chip giant Semiconductor Manufacturing International Corp (SMIC) in a bid to get closer to China's electronics industry.

Spansion was originally a JV between AMD of the US and Japan's Fujitsu before floating on Nasdaq in December 2005. It specialises in NOR flash memory chips, which are used principally for storing software programs in smartphones and other programmable devices. NAND flash, by contrast, is used for storing data in USB pen drives or music in MP3 players.

Flash memory is a cut-throat business and the pricing pressures are increasing as Chinese electronics companies make great inroads into the mobile phone and consumer electronics markets.

Spansion has thus decided to ally with SMIC to bring down costs and get closer to Chinese customers. SMIC will make Spansion's chips on 12-inch wafers, which should bring costs down. Spansion has a foundry deal with TSMC, the world's biggest foundry, but the Taiwanese rival does not have a 12-inch capability in China.

and the two have signed a preliminary memorandum of understanding that would allow SMIC to enter selected segments of the flash memory market with a license to manufacture and sell certain Spansion flash memory products for the Chinese market.

More here

Technorati : SMIC, china, electronics, manufacturing, outsourcing, semiconductors

Betex, the London-listed bookmaker focussed on China, is anything but the sure-cert bet it once seemed. Indeed, investors now risk losing their shirts as the company has been delisted from London's Aim market.

Trading in the company's shares was suspended earlier this year after two of its local executives were detained by Chinese police. The company failed to produce audited results for 2006 and it has now been delisted.

Betex says that it even if the two individuals face prosecution, it is confident that it will escape charges. It insists that is still has a “viable business proposition” and its core investments in China continue to “perform in line with expectations.”

Nevertheless, Betex admits that it is unlikely that its long-suffering shareholders will be able to sell their shares in the short term.

More in this trade press article.

While gambling is still officially illegal in the PRC, the government turns a blind eye to state lotteries and that has encouraged western gambling firms to turn their sights on China. The big attraction of Betex for investors was its “first mover advantage” as it moved into China a lot more aggressively than bigger and better-known western gambling businesses.

In 2005, it won a contract to co-manage the state sports lottery of the Chinese province of Guizhou, making it the first foreign company to win a Chinese gaming contract.

But as the company has discovered, the Chinese gaming market is full of pitfalls for the unwary, not least the uncertain regulatory regime and the lack of transparency in this shady industry.

Betex may live to fight another day and the market may grow to be an attractive one for foreign firms, but in the meantime, investors would be well advised to place their bets elsewhere.

More on Betex in these stories.

Technorati : AIM, china, consumer, gambling