AGREEMENT ON CAPITAL INCREASE AND ADMISSION OF NEW JOINT VENTURER OF SHANGHAI HUA HONG NEC ELECTRONICS COMPANY, LIMITED SHANGHAI, CHINA

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Exhibit 10.48

AGREEMENT

ON

CAPITAL INCREASE AND ADMISSION OF NEW JOINT VENTURER

OF

SHANGHAI HUA HONG NEC ELECTRONICS COMPANY, LIMITED

SHANGHAI, CHINA

Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

TABLE OF CONTENTS

Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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        This AGREEMENT ON CAPITAL INCREASE AND ADMISSION OF NEW JOINT VENTURER OF SHANGHAI HUA HONG NEC ELECTRONICS COMPANY, LIMITED (hereinafter referred to as this " Agreement ") is made and entered into as of August 29 ^th , 2003, in Shanghai, the People's Republic of China (hereinafter referred to as " China ") among and by:

         Shanghai Hua Hong (Group) Co., Ltd. (hereinafter referred to as " Party A "), a company with limited liability duly organized and existing under the laws of China, having its registered address at Land Lot No. 46, Pudong Jinqiao Development Zone, Shanghai, China under the registration number of 150411800; its Legal Representative is Mr. Zhang Wenyi;

         NEC CORPORATION (hereinafter referred to as " Party B1 "), a company with limited liability duly organized and existing under the laws of Japan, having its registered address at 7-1, Shiba 5-chome, Minato-ku Tokyo, Japan; its Legal Representative is Mr. Akinobu Kanasugi;

         NEC (China) Co., Ltd. (hereinafter referred to as " Party B2 "), a company with limited liability duly organized and existing under the laws of China, having its registered address at 19F Full Link Plaza No. 18 Chaoyangmenwai Ave., Beijing, China under the registration number of 000718; its Legal Representative is Mr. Iwao Shinohara;

         Shanghai Hua Hong International Inc. (hereinafter referred to as " Party C " ) , a company with limited liability duly organized and existing under the laws of British Cayman Island, having its registered address at British Cayman Island, its authorized representative is Mr. Gu Xiaochun.

         Newport Fab, LLC d/b/a Jazz Semiconductor (hereinafter referred to as " Party D "), a company with limited liability duly organized and existing under the laws of Delaware, the United Sates of America, having its offices at 4321 Jamboree Road, Newport Beach, CA 92660-3095; its authorized representative is Mr. Shu Li;

         And

         Shanghai Hua Hong NEC Electronics Company, Limited (hereinafter referred to as " Party E "), a company with limited liability duly organized and existing under the laws of China, having its registered address at No. 1188 Chuan Qiao Road, Pudong New Area, Shanghai, China, its legal representative is Mr. Zhang Wenyi.

        Party B1 and Party B2 are sometimes referred to collectively as " Party B ", and a duty, obligation or right of Party B under this Contract shall be deemed to be a joint and several duty, obligation or right of both Party B1 and Party B2. Party A, Party B1, Party B2, Party C, Party D and Party E are sometimes referred to collectively as the " Parties " or individually as a " Party ".

WITNESSETH

        1.     Party A and Party B entered into and executed the Joint Venture Contract on the Establishment and Operation of Party E (hereinafter referred to as the " 1997 JV Contract ") and the Articles of Association of Shanghai Hua Hong NEC Electronics Company Limited (hereinafter referred to as the " 1997 AOA ") on May, 1997 to establish and operate Party E with its registered capital of USD [...***...] which is now engaged in the design, development, manufacturing (wafer fabrication) and sale of large scale integrated circuits;

        The share structure of Party E before entering into this Agreement is as follows:

[...***...]

Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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        2.     The Parties intend to evaluate the potential investment into Party E, to enhance the Parties' wafer foundry services to manufacture semiconductor products and to further realize the strategic cooperation with regard to semiconductor products manufacturing and advanced technology. Based on such intention, Party A (also on behalf of, and authorized by Party E) and Party D have executed and entered into a Memorandum of Understanding (hereinafter referred to as the " MOU ") as of July 16 ^th , 2003 in Shanghai, China in order to collaborate together and create competitive foundry services to manufacture semiconductor products;

        3.     Party A, Party B and Party C agree to allow Party D to invest in, and Party D agrees to invest in Party E by increasing the registered capital of Party E subject to the terms and conditions contemplated in this Agreement, the joint venture contract and the articles of association to be entered into between the Parties (hereinafter referred to as, respectively, the " New JV Contract " and the " New AOA ") and based on the mutual understandings that Party D shall be granted with the equity representing 11.32%, diluting to no less than 10% post the contemplated Shanghai Belling Co., Ltd. investment of the registered capital of Party E if Party D fulfils its obligation to license and transfer all the technologies as contemplated in the MOU to Party E and the current value of Party E before investment by Party D shall not be less than USD [...***...] as of the Effective Date (as defined below);

        NOW, THEREFORE, in consideration of the premises and the mutual promises, representations, warranties and covenants hereinafter set forth, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

        In this Agreement, unless the context requires otherwise, the following terms used in this Agreement shall have the meanings set forth below:

        1.1   " Affiliates " shall mean in relation to a company, any other company or partnership which, through ownership of voting stock or otherwise, directly or indirectly, is controlled by, under common control with, or in control of that company. The term "control" means ownership of more than fifty percent (50%) of the voting stock of a company, or the power to appoint or elect a majority of the directors of a company.

        1.2    "Effective Date" shall mean the date on which this Agreement shall become effective pursuant to Article 8.8 of this Agreement.

        1.3   " Joint Stock Company " shall mean the company limited by shares under the Company Law of China and other applicable laws of China.

        1.4    "USD" or "US Dollar(s)" shall mean the lawful currency of the United States of America.

ARTICLE 2

CAPITAL INCREASE AND ADMISSION OF NEW JOINT VENTURER

        2.1    Capital Increase

        On the Effective Date provided in this Agreement and subject to the terms and conditions set forth hereinafter, the Parties hereby agree to increase the registered capital of Party E from [...***...] to [...***...] (hereinafter referred to as " New Registered Capital ") and the difference between the current registered capital of [...***...] and the New Registered Capital of [...***...] (hereinafter referred to as the " Increased Capital ") shall be contributed through the investment made by Party D in accordance with Article 2.2 herein. Accordingly the total investment of Party E shall be simultaneously adjusted from the current [...***...] to [...***...] on the Effective Date provided in this Agreement.

Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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        2.2    Subscription of Increased Capital

        On the Effective Date provided in this Agreement and subject to the terms and conditions set forth hereinafter, Party D shall subscribe the Increased Capital, which accounts for Eleven Point Three Two Percent (11.32%) of the New Registered Capital of Party E. The subscribed contributions of Party D to the New Registered Capital shall be made in technologies and cash and in US Dollars as follows:

(i)

Cash: Ten Million US Dollars (USD 10,000,000);

(ii)

[...***...] in the form of technologies solely for the purposes of aiding and assisting the entry of Party D, under the laws of the PRC, into the Party E.

        2.3    Contribution Schedule

        The specific amount to be paid or contributed, time and schedule for making such payments or contributions by Party D shall be subject to the New JV Contract and the Technology License and Transfer Agreement entered into by and between Party D and Party E and in accordance with the contribution schedule specially stipulated in Exhibit 1 attached hereto.

        2.4    Increased Capital Contribution Verification

        The Increased Capital contribution verification shall be conducted in accordance with Article 6-06 (2) in the New JV Contract.

        2.5    Share Structure after Capital Increase

        On the Effective Date, the share structure of Party E shall be as follows:

[...***...]

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

        3.1    Representations and Warranties by Party A

        Party A hereby represents and warrants to the other Parties, as of the Effective Date, the following:

        (1)   Organization and Standing

        Party A is a company with limited liability duly organized, validly existing and in good standing under the laws of China.

        (2)   Corporate Authority

        Party A has full corporate power and authority to enter into this Agreement and all other agreements, instruments or certificates contemplated herein to which it is party, and to consummate the transactions contemplated herein. The execution, delivery and performance by Party A of this Agreement and all other agreements instruments or certificates contemplated herein to which it is party have been duly authorized by all requisite corporate actions. This Agreement and all other agreements, instruments or certificates contemplated herein have been duly executed and delivered by Party A. This Agreement and all other agreements, instruments or certificates contemplated herein constitute a valid and binding obligation of Party A, enforceable in accordance with its terms, except where such enforceability may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance, and/or similar laws affecting creditor's rights generally.

Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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        (3)   No Violation

        Party A is not in violation of or in default in any material respect under any term of its organizational documents, any term or provision of any mortgage, indenture, contract, agreement, instrument, judgment or decree. The execution, delivery and performance of this Agreement and all other agreement, instruments or certificates have not resulted in and will not result in any such violation of or conflict with, or constitute a default under any of the foregoing.

        (4)   Compliance with Law

        Party A is in compliance with all laws and regulations of China to which it is subject, the violation of which, either individually or in aggregate, would have a material adverse effect. The execution, delivery or performance of this Agreement and all other agreements, instruments and certificates contemplated herein and the consummation of the transactions contemplated herein will not cause Party A to be in violation of any laws and regulations of China.

        (5)   Paid-Up Contributions

        Party A has fully paid up its contributions representing [...***...] in the New Registered Capital of Party E evidenced by the capital verification report that has been issued by a qualified Chinese accountant and attached hereto as Exhibit 2.

        3.2    Representations and Warranties by Party B1 and Party B2

        Party B1 hereby represents and warrants to the other Parties, as of the Effective Date, the following:

        (1)   Organization and Standing

        Party B1 is a company with limited liability duly organized, validly existing and in good standing under the laws of Japan.

        (2)   Corporate Authority

        Party B1 has full corporate power and authority to enter into this Agreement and all other agreements, instruments or certificates contemplated herein to which it is party and to consummate the transactions contemplated herein. The execution, delivery and performance by Party B1 of this Agreement and all other agreements instruments or certificates contemplated herein to which it is party have been duly authorized by all requisite corporate actions, except that B1 will need an approval by its Board of Directors. This Agreement and all other agreements, instruments or certificates contemplated herein have been duly executed and delivered by Party B1. This Agreement and all other agreements, instruments or certificates contemplated herein constitute a valid and binding obligation of Party B1, enforceable in accordance with its terms, except where such enforceability may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance, and/or similar laws affecting creditor's rights generally.

        (3)   No Violation

        Party B1 is not in violation of or in default in any material respect under any term of its organizational documents, any term or provision of any mortgage, indenture, contract, agreement, instrument, judgment or decree. The execution, delivery and performance of this Agreement and all other agreements, instruments or certificates have not resulted in and will not result in any such violation of or conflict with, or constitute a default under any of the foregoing.

Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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        (4)   Compliance with Law

        Party B1 is in compliance with all laws and regulati