In response to the Staff’s comment, the Company respectfully advises the Staff that the Company’s balances for deferred inventory costs and advances from customers result from the terms of the Company’s quality inspection arrangements with customer acceptance provisions, which provide customers with a quality inspection period, as disclosed in Note 2(i) Inventories on page F-12 and Note 2(o) Revenue Recognition on page F-14 of the 2010 Form 20-F.  Pursuant to the terms of the quality inspection arrangements, the Company delivers its products and receives payments from customers; however, the Company does not recognize revenue until the earlier of the customer’s acceptance of the products or the expiration of the quality inspection period (without a prior rejection of the products by the customer).  The Company’s balances for deferred inventory costs and advances from customers significantly increased from 2010 as compared to 2009 because (1) quality inspection arrangements providing customers with a quality inspection period were granted to the majority of the Company’s customers in 2010 while such arrangements were provided to only select customers in 2009; (2) the quality inspection period under the quality inspection arrangements was extended from 30 or 60 days in 2009 to primarily 90 days in 2010; and (3) the Company’s volume of business increased significantly, from total revenue of $105 million in 2009 to $346 million in 2010, with revenue from contracts with quality inspection provisions representing approximately 81% of total revenue for 2010 as compared to 6% of total revenue for 2009.

In response to the Staff’s comment, the Company proposes to include a disclosure along the following lines in future filings:

“Our balances for deferred inventory costs and advances from customers result from the terms of our quality inspection arrangements with customer acceptance provision, which provide customers with a quality inspection period.  Pursuant to the terms of such arrangements, we deliver our products and receive payments from customers; however, we do not recognize revenue until the earlier of the customer’s acceptance of the products or the expiration of the quality inspection period (without a prior rejection of the products by the customer).  Our balances for deferred inventory costs and advances from customers increased significantly as of December 31, 2010 when compared to December 31, 2009 because (1) quality inspection arrangements providing customers with a quality inspection period were granted to the majority of our customers in 2010 while such arrangements were provided to only select customers in 2009; (2) the quality inspection period under the revenue arrangements was extended from 30 or 60 days in 2009 to primarily 90 days in 2010; and (3) the Company’s volume of business increased significantly, from total revenue of $105 million in 2009 to $346 million in 2010, with revenue from contracts with quality inspection provisions representing approximately 81% of total revenue for 2010 as compared to 6% of total revenue for 2009.”

In response to the Staff’s comment, the Company respectfully advises the Staff that the Company’s revenue increased by 229.6% in 2010 as compared to 2009 due to a significant increase in the sale of the Company’s bundle semiconductors, which included 2G/2.5G and 3G bundle semiconductors.  The increase in sales volume of the Company’s 2G/2.5G bundle semiconductors was primarily due to: (1) the Company’s successful launch of its innovative SC6600L2/L7 series baseband chipsets, which are bundled with the Company’s RF transceivers and allow multiple SIM cards to run simultaneously on standby mode with one set of baseband and RF transceiver bundle semiconductor; and (2) the increased adoption of the Company’s 2G/2.5G products by handset manufacturers, Independent Design Houses (“IDH”) and Original Design Manufacturers (“ODM”), significantly increasing market demand for the Company’s products.  The increase in sales volume of the Company’s 3G bundle semiconductors was primarily due to: (1) the growth of China’s domestic TD-SCDMA (a 3G standard) market resulting in a significant increase in the Company’s shipments of its TD-SCDMA solution and RF bundle chipset; and (2) the adoption of the Company’s TD-SCDMA solution and increased usage of the Company’s 3G bundle semiconductor chips by handset manufacturers, IDHs and ODMs.

In response to the Staff’s comment, the Company proposes to include a disclosure along the following lines in future filings:

In response to the Staff’s comment, the Company respectfully advises the Staff that the Company has quality inspection arrangements with [******] of its four largest customers in 2010 providing for the quality inspection period described above in response to comment 1 and requiring [******] to the Company within [******] to [******] days of the beginning of the month for goods shipped during the previous month. As detailed in Note 2(o) of page F-14, the Company does not recognize revenue until the earlier of the customer’s acceptance of the products or the expiration of the quality inspection period (without a prior rejection of the products by the customer). Accordingly, prior to the recognition of such revenue, the Company does not record any accounts receivables.  Rather, payments received from customers are recorded as advances from customers. All the payments due and payable in 2010 from the Company’s four largest customers in the same period were received prior to the Company’s recognition of the associated revenue. Therefore, no accounts receivable balances had been recorded for such customers as of December 31, 2010.

In response to the Staff’s comment, the Company respectfully advises the Staff that, beginning in the fourth quarter of 2009, the Company granted a quality inspection period of 30 or 60 days to certain of its key customers, which provided such customers with the right to return and cancel the sales order if the products failed to meet the customer’s quality inspection.  In 2010, a majority of the Company’s customers were granted similar rights and the quality inspection periods were extended primarily to 90 days. For the year ended December 31, 2010, recognized revenue associated with contracts providing for quality acceptance periods was approximately US$260 million, representing approximately 81% of total revenue in 2010, compared to approximately US$6 million or 6% of total revenue in 2009.

In response to the Staff’s comment, the Company respectfully advises the Staff that the disclosure of revenues by location are attributed to countries where the Company’s customers are based. The Company currently sells its products to handset device manufacturers, IDHs, ODMs and distributors. It is the Company’s understanding that the handset device products manufactured by these handset device manufacturers, IDH’s and ODMs, and customers of the distributors are then sold to emerging markets, including China, India, South-East Asia, Africa and South America. The Company’s disclosure in Segment and Geographic Information on page F-26 reflects the Company’s revenue based on the respective geographic locations of the Company’s customers noted above.

The Company respectfully notes the Staff’s comment and confirms that it will expand the disclosure of Segment and Geographic Information in future filings to disclose the basis of attributing revenues from external customers as explained above.

In response to the Staff’s comment, the Company respectfully advises the Staff that the Company’s 2G/2.5G and 3G bundle semiconductors are subsets of the Company’s bundle semiconductor category. Accordingly, the Company respectfully submits that it did not change the major categories of its product revenue, which include RF transceivers, baseband semiconductors and bundle semiconductors.

As discussed in the Company’s response to the Staff’s comment 2 above, revenue from the Company’s sale of RF transceiver and baseband semiconductors has reduced significantly as the majority of the Company’s customers demand bundle semiconductor products from the Company.   Upon acquisition of Spreadtrum USA in January 2008, the Company started to design, develop and market RF transceivers in addition to baseband semiconductors, and also began to sell bundle semiconductor products. The bundle rate of the Company’s RF transceivers to its baseband semiconductors increased from an average of [******] in 2009 to approximately [******] in 2010 due to improved quality in RF transceiver solution. In 2010, substantially all the Company’s revenue ([******]) came from the sale of bundle semiconductor products.