UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED

Building 1, No. 13, YongChang North Road
Beijing Economic-Technological Development Area (Yi Zhuang)
Beijing 100176, People’s Republic of China
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ          Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 18, 2009

EXHIBIT INDEX

Exhibit No.		Description
99.1		Press release regarding Techfaith’s second quarter 2009 financial results

Exhibit 99.1

TechFaith Reports Second Quarter 2009 Financial Results

• Announces Signing of Non-Binding Letter of Intent to Acquire Branded Mobile Phone Company QiGi

Beijing, China, August 17, 2009 — China Techfaith Wireless Communication Technology Limited (NASDAQ: CNTF) (“TechFaith” or the “Company”) today announced its unaudited financial results for the second quarter of 2009 ended June 30, 2009. The Company also announced it has signed a non-binding letter of intent to acquire, with TechFaith stock and cash as consideration, 100% of the Chinese branded mobile phone company QiGi, which is to be valued at US$12.5 million. In addition, the Company announced the resignation of Mr. Wilson Cai from his position as Deputy CEO of TechFaith and from the Company’s board of directors citing personal health reasons.

For the second quarter of 2009, TechFaith reported total net revenues of US$49.8 million, a 2.4% increase compared to US$48.7 million in the previous quarter. Gross profit for the second quarter of 2009 was US$9.5 million, a 7.6% increase compared to US$8.8 million in the previous quarter. Gross margin for the second quarter of 2009 was 19.0% compared to 18.1% in the previous quarter. Revenue from product sales remained the same as the previous quarter while revenue from handset design increased about US$1 million from the previous quarter. Operating expense for the quarter was US$7.3 million, a 29.4% increase compared to US$5.7 million in the previous quarter. The operating expenses for the quarter included bad debt provision of US$1.8 million compared to the reversal of bad debt provision of US$0.2 million in the previous quarter.

Net income attributable to Techfaith for the second quarter of 2009 was US$4.5 million, or US$0.10 per weighted average outstanding ADS (basic and diluted), an improvement of 112.4% compared to net income of US$2.1 million, or US$0.05 per weighted average outstanding ADS (basic and diluted) in the previous quarter.

The net income attributable to Techfaith for the second quarter of 2009 included a US$2.1 million gain as a result of change in fair value of the derivatives associated with the convertible debt that was issued to IDGVC Partners in June 2009.

Defu Dong, TechFaith’s Chairman and CEO, said, “Results came at the high end of prior guidance in what is not typically a seasonally strong quarter. We continue to gain traction in our core business areas as we further improve and build on our long-term strategy by leveraging our Original Developed Product (“ODP”) business. Demand in our core ODP cellphone business is being led by the domestic China 3G market, especially the EVDO and HSDPA data card business, and the WCDMA feature phone sales. While growth in the 3G rollout has been strong for the past few quarters, based on forecasts, we expect an easing in Q3, with a resumption of more stable growth in domestic China 3G market given the considerable pent-up demand in China and expected market growth worldwide.”

Mr. Dong continued, “Separately, our design business improved led by the enterprise user’s market. We are pleased with the commercialization of several promising products, including our dual-GSM SIM card G6. Our G6 is an exciting device that was designed to serve as a feature-rich mobile phone, and also as both an equally strong mobile gaming platform and a remote control for PC gaming, with advanced motion sensors. We also launched our HSUPA data modem card in the U.S. market in the second half of June. We continue to build up our foundation in the U.S. This is an important market for TechFaith for technology, distribution and network operator relationships. Given the large size and the sophisticated nature of the U.S. market and its demand for high value and performance, we are looking forward to further expanding our product offerings available in the U.S.”

“We continue to make progress in developing our gaming business. Our team has completed pre-launch promotions for several of our pending title launches and is working very hard to finalize our initial titles. 16 mobile massive multiplayer online role-playing games (MMORPG) are now available on our Chinese mobile games website www.798uu.com. The MMORPG-“Fairy online” for PC online games is now in open BETA version on our website www.798game.com. We also set up another studio in Shanghai to accelerate development of games. With our successful third party funding a few months ago, we are focused on growing One Net Entertainment as a stand-alone business given its significant potential future upside.”

Non-Binding Letter of Intent to Acquire QiGi

TechFaith has signed a non-binding letter of intent to acquire 100% of QiGi in a stock-plus-cash transaction valued at US$12.5 million, comprised of US$0.5 million in cash and 65,934,066 ordinary shares of TechFaith (note: one publicly traded ADS is equal to 15 ordinary shares). The number of ordinary shares to be issued to QiGi’s existing shareholders is contingent on QiGi achieving a net income of over US$8.0 million for the fiscal year of 2010 and over US$10.0 million for the fiscal year of 2011 and will be adjusted if the targeted net incomes are not achieved.

Defu Dong, Chairman and CEO of TechFaith, said, “QiGi has grown very quickly to become a leading branded mobile phone company in the China market, especially in smartphones and for enterprise and operator-customized users, and in several important international markets. We believe this transaction will add significant value to TechFaith as we promote and launch TechFaith smartphones in China’s domestic market and abroad, especially for enterprise users and operators. With 3G network available in China and future 4G network, there are big business potentials for enterprise solutions that provide smartphones for public security systems, banks, government departments, IT market and home security systems. We are also pleased to have reached agreements with several of QiGi’s key managers, including Mr. Enhai Xu, who will continue to serve as President of QiGi, as it will operate largely independently after the acquisition is completed. We are very optimistic about the future of QiGi as an important TechFaith brand.”

Management change

The Company announced the resignation of Mr. Wilson Cai from his position as Deputy CEO of TechFaith and from the Company’s board of directors effective immediately. Mr. Cai cited personal health concerns for his resignation. Commenting on the resignation, Mr. Dong noted, “We respect his decision and wish Mr. Cai and his family all the best. He has been an active member of our team since 2002 and we will miss him and remember his significant contributions to Techfaith.”

Mr. Cai will be replaced on the board of directors by Mr. Dong Deyou, who has served as an executive with TechFaith since 2007 in multiple roles, leveraging his experience in sales, supply chain sourcing and operations.

Third Quarter 2009 Outlook

TechFaith currently expects sequential growth in the second half of 2009 based on improvements in the domestic China and certain international markets. For the third quarter of 2009 the Company expects revenues to be in the range of US$47 million to US$52 million for the third quarter of 2009. The Company expects better performance from its ODP business due to long-term growth in China’s 3G market and the recovery already underway in the global cellphone market. TechFaith also expects an acceleration in developing its gaming business in the second half year of 2009.

Conference Call

TechFaith will hold a call on Monday, August 17, 2009 at 7:00 p.m. U.S. Eastern Time (7:00 a.m. August 18, 2009 in Beijing), with dial in phone number +1-617-213-8834 and conference call passcode 95340243. A live webcast of the conference call will also be available on TechFaith’s website at www.techfaithwireless.com.

A replay of the call will be available approximately one hour after the conclusion of the live call through 12:00 p.m. on August 24, 2009, U.S. Eastern Time (12:00 a.m., August 25, 2009 in Beijing) by telephone at +1-617-801-6888. To access the replay, use passcode 88857248. A webcast replay will also be available at www.techfaithwireless.com.

About TechFaith

TechFaith (NASDAQ: CNTF) is a China-based original developed product provider focused on the original design and sales of cellphone products. TechFaith is also striving to build a leading PC and online gaming business through its wholly-owned subsidiary, One Net Entertainment Limited. One Net Entertainment is leveraging an integrated model that combines self-developed as well as co-developed and licensed content. TechFaith employs approximately 500 professionals, of whom approximately 90% are engineers.

	•		TechFaith engages in the development and production of middle to high end handsets and tailor made handsets. TechFaith’s original developed products include: (1) multimedia phones and dual mode dual card handsets of multiple wireless technology combination such as GSM/GSM, GSM/CDMA, GSM/WCDMA, GSM/TD-SCDMA and UMTS/CDMA; (2) Windows-based smartphones and Pocket PC phones; and (3) handsets with interactive online gaming and professional game terminals with phone functionality.
	•		With the capability of developing Middleware Application MMI/UI software on 2G/2.5G(GSM/GPRS, CDMA1X), 3G(EV-DO, WCDMA/UMTS, TD-SCDMA) and 3.5G(HSDPA) communication technologies, TechFaith is able to provide Middleware Application MMI/UI software packages that fulfill the specifications of handset brand owners and carriers in the global market. For more information, please visit www.techfaithwireless.com.
	•		TechFaith is targeting both the mobile and online PC gaming markets through its websites www.798uu.com and www.798game.com, respectively. Three massive multiplayer online role-playing games (MMORPGs) are planned to launch in 2009 for online PC users on www.798game.com. 16 titles are planned to launch for mobile gamers on the company’s Chinese mobile games website www.798uu.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “outlook” and similar statements. Among other things, the business outlook and strategic and operational plans of TechFaith contain forward-looking statements. TechFaith may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about TechFaith’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, those risks outlined in TechFaith’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. TechFaith does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

CONTACTS:

In China:		In the U.S.:
Jay Ji		David Pasquale
China Techfaith Wireless Communication Technology Limited		Global IR Partners
Tel: 86-10-5822-8390		Tel: +1 914-337-8801
ir@techfaith.cn		cntf@globalirpartners.com

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of U.S. Dollars, except share and per share/ADS data and unless otherwise stated)

		Three Months Ended												Six Months Ended
		June 30								March 31				June 30
		2009				2008				2009				2009				2008
		(1)				(As adjusted)(2)				(1)				(1)				(As adjusted)(2)
Revenues:
Handset design		$	1,657			$	5,617			$	655			$	2,312			$	10,181
Product sales			48,036				50,973				48,015				96,051				96,004
Wireless software and applications			153				—				—				153				—
Total net revenues		$	49,846			$	56,590			$	48,670			$	98,516			$	106,185
Cost of revenues:
Handset design		$	1,082			$	2,657			$	808			$	1,890			$	4,853
Product sales			39,284				39,998				39,048				78,332				77,676
Wireless software and applications			—				—				—				—				—
Total cost of revenues		$	40,366			$	42,655			$	39,856			$	80,222			$	82,529
Gross Profit		$	9,480			$	13,935			$	8,814			$	18,294			$	23,656
Operating expenses:
General and administrative		$	3,479			$	2,777			$	1,740			$	5,219			$	5,978
Research and development			3,189				6,625				3,096				6,285				12,121
Selling and marketing			624				1,300				802				1,426				2,153
Exchange loss (gain)			21				(19	)			14				35				515
Total operating expenses		$	7,313			$	10,683			$	5,652			$	12,965			$	20,767
Government subsidy income			12				22				5				17				2,563
Other operating income			—				—				—				—				—
Income from operations		$	2,179			$	3,274			$	3,167			$	5,346			$	5,452
Interest expense			(62	)			(7	)			(30	)			(92	)			(16	)
Interest income			156				499				177				333				916
Other income (expense), net			38				(18	)			—				38				(15	)
Change in fair value of derivatives associated with Convertible Debt			2,113				—				—				2,113				—
Change in fair value of put option			—				(6	)			(18	)			(18	)			9
Income before income taxes		$	4,424			$	3,742			$	3,296			$	7,720			$	6,346

		Three Months Ended												Six Months Ended
		June 30								March 31				June 30
		2009				2008				2009				2009				2008
		(1)				(As adjusted)(2)				(1)				(1)				(As adjusted)(2)
Income tax			106				—				(1219	)			(1113	)			—
Net (loss) income		$	4,530			$	3,742			$	2,077			$	6,607			$	6,346
Less: net income attributable to the noncontrolling interest (2)			(26	)			121				44				18				380
Net income attributable to Techfaith		$	4,504			$	3,863			$	2,121			$	6,625			$	6,726
Net income per ordinary share
Basic		$	0.01			$	0.01			$	—			$	0.01			$	0.01
Diluted		$	0.01			$	0.01			$	—			$	0.01			$	0.01
Net income per ADS*
Basic		$	0.10			$	0.09			$	0.05			$	0.15			$	0.16
Diluted		$	0.10			$	0.09			$	0.05			$	0.15			$	0.16
Weighted average ordinary shares outstanding Basic			650,034,590				649,913,136				650,034,590				650,034,590				649,913,136
Diluted			679,148,185				649,943,575				650,034,590				664,671,776				650,028,578

Revenue Breakout		1Q08				2Q08				3Q08				4Q08				1Q09				2Q09
Handset design
Design fees		$	3,264			$	4,656			$	1,051			$	6,517			$	186			$	645
Royalty		$	534			$	277			$	166			$	181			$	—			$	245
Components sales related to design		$	731			$	520			$	544			$	465			$	469			$	745
Service income		$	35			$	164			$	13			$	5			$	—			$	22
Product sales
Smart Phone		$	18,123			$	26,979			$	29,367			$	25,483			$	27,186			$	23,061
Feature phone		$	23,156			$	22,774			$	18,525			$	17,880			$	20,190			$	16,038
Wireless module		$	3,752			$	1,220			$	1,035			$	1,324			$	639			$	8,937
Other components		$	—			$	—			$	109			$	—			$	—			$	—
Wireless software and applications		$	—			$	—			$	—			$	—			$	—			$	153
Total net revenues		$	49,595			$	56,590			$	50,810			$	51,855			$	48,670			$	49,846

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of U.S. Dollars)

		June 30, 2009				June 30, 2008				March 31, 2009
		(1)				(As adjusted)(2)				(1)
Assets
Current assets:
Cash and cash equivalents		$	111,794			$	72,163			$	97,499
Restricted cash			81				417				80
Accounts receivable			24,376				36,996				29,812
Amount due from related parties			7,144				4,842				7,954
Notes receivable			693				1,706				443
Inventories			27,642				48,867				30,367
Prepaid expenses and other current assets			12,745				10,788				11,917
Deferred tax assets-current			96				—				78
Total current assets		$	184,571			$	175,779			$	178,150
Deposits for acquisition of plant, machinery and equipment, and acquisition of intangible assets		$	—			$	15,436			$	—
Plant, machinery and equipment, net			22,589				27,309				23,255
Construction in progress			23,498				—				23,521
Acquired intangible assets, net			758				1,919				838
Deferred tax assets-noncurrent			117				—				29
Goodwill			619				606				606
Total assets		$	232,152			$	221,049			$	226,399
Liabilities and shareholders’ equity
Current liabilities:
Current portion of Long term payable		$	1,028			$	1,228			$	1,211
Accounts payable			6,042				11,224				7,362
Amount due to related parties			297				224				438
Accrued expenses and other current liabilities			11,726				11,058				9,597
Advance from customers			6,771				5,804				11,839
Deferred revenue			773				1,164				1,431
Income tax payable			149				148				1,343
Total current liabilities		$	26,786			$	30,850			$	33,221
Convertible debt			7,529				—				—
Long-term payable			—				125				—
Total liabilities		$	34,315			$	30,975			$	33,221
Shareholders’ equity
Ordinary shares		$	13			$	13			$	13
Additional paid-in capital			105,848				110,441				105,847

		June 30, 2009				June 30, 2008				March 31, 2009
		(1)				(As adjusted)(2)				(1)
Treasury stock			—				(4,628	)			—
Accumulated other comprehensive income			23,838				23,721				23,711
Statutory reserve			8,542				6,813				8,542
Retained earnings			58,605				52,434				54,101
Total Techfaith shareholders’ equity		$	196,846			$	188,794			$	192,214
Noncontrolling interest (2)		$	991			$	1,280			$	964
Total shareholders’ equity		$	197,837			$	190,074			$	193,178
Total liabilities and shareholders’ equity		$	232,152			$	221,049			$	226,399