Winners From China’s New 3G Expansion (MOT)(QCOM)(TXN)(BRCM)

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The Chinese government has finally set up a system to bring fast wireless 3G service to its citizens. In a country where handsets are used the way that many people in the US and EU use laptops, the move will bring a new generation of multimedia access to hundreds of millions of people and should make several US companies a lot of money.

According to The Wall Street Journal. "China Mobile Ltd. (CHL), the dominant carrier, would be assigned the Chinese-developed TD-SCDMA standard. The global standards WCDMA and CDMA-2000 are to go to China Unicom Ltd. (CHU) and China Telecom Ltd., respectively."

While US and EU equipment and chip providers will not make money from the local Chinese 3G standard, they could make billions of dollars providing chips and infrastructure for the global standards.

In the chip business, Qualcomm (QCOM), Broadcom (BRCM), and Texas Instruments (TXN) are all likely to provide components for 3G handsets. Nortel (NT) and Ericsson are large providers of infrastructure components as is Nokia Siemens Networks .

Motorola (MOT) is a large supplier of CDMA-2000 components.

Many of those companies should make money on the new Chines build-out, unless China tries to push all of the business to firms inside its borders.

Douglas A. McIntyre