China phone giant Oppo dissolves chip design unit as shipments plunge

Chinese smartphone giant Oppo is winding up its fledgling chip design unit Zeku as weak global demand forces major mobile phone makers to cut costs and restrategise.

The decision comes as a surprise to those who believe the phonemaker is pushing its internal chip development as rising geopolitical tensions with the US threaten to remove Chinese companies from key suppliers. For the foreseeable future, Oppo will have to rely on third-party chip partners again.

While Oppo managed to end the first quarter of 2023 as the world’s fourth-largest smartphone vendor, its shipment fell 8%, according to a market research firm. canalys. Aside from Apple, the top five phone makers all saw a decline in shipments. In total, the global smartphone market contracted 13% in the quarter.

Oppo explained its decision to cut its once-promising chip team in a statement released today: “Due to uncertainties in the global economy and the smartphone industry, we have to make difficult adjustments for long-term development. Therefore, the company has decided to cease the operation of Zeku.

In December 2021, Zeku revealed its first self-developed chipset, MariSilicon X, a neural processing unit designed to improve photo and video performance through machine learning, following Apple’s lead in leading chip design. internally. Zeku also established a research base in Palo Alto.

Zeku’s end seems abrupt given that Zeku was still hiring for over 100 positions a month ago, according to his LinkedIn page.

It is not clear how the measure will affect the more than 2,000 employees at Zeku, which has been offering competitive salaries to attract talent from other established chip firms. Oppo is reticent about the whereabouts of the device for now, saying only that “the company will properly fix the related issues and continue to provide excellent products and services to users around the world.”

Oppo’s withdrawal from the chips signals another struggle by Chinese phone companies to tighten their grip on the semiconductor supply chain. Huawei lost access to advanced US chips due to Trump-era sanctions, and its attempt to design its own high-end chips through HiSilicon failed after the US cut major majors. foundries. The company resorted to launching its brand of budget phones, Honor, a move seen as a way to help the subsidiary circumvent sanctions that decimated Huawei’s consumer business.


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