NEW YORK (AP) -- Shares of Spreadtrum Communications Inc., a Nasdaq-listed Chinese company that makes chips for cellphones, climbed Tuesday after an upgrade by J.P. Morgan.
THE SPARK: J.P. Morgan analyst Qin Zhang upgraded Spreadtrum to "Overweight" from "Neutral" on Monday, saying the company has been winning contracts to supply chips for smartphones destined for China Mobile's network.
THE ANALYSIS: Spreadtrum chips will go into two out of the three smartphone designs China Mobile picked in a second-quarter contest, and all three non-smartphone designs, Zhang noted.
China Mobile is the country's dominant cellphone company. The phones are destined for its third-generation, or "3G" data network, which uses a technology developed in China, and requires non-standard phone chips.
One of Spreadtrum's design wins is for the HTC One XT, China Mobile's version of HTC Corp.'s flagship model.
SHARE ACTION: Spreadtrum shares rose $1.76, or 11 percent, to $18.25 in afternoon trading. It was the highest level in two weeks for the shares, which have ranged from $8.59 to $29.98 over the past 12 months.