OPPO Shuts Down Its Chip Business Becoming A Victim of Economic Downturn
In a fresh cautionary story for Chinese enterprises chasing the government’s quest for semiconductor self-sufficiency, the Chinese smartphone manufacturer Oppo has unexpectedly closed down its chip design unit, Zeku, to the dismay of employees, according to the company and former workers.
Oppo released a short statement on Friday explaining the decision, calling it “a difficult decision” due to “uncertainties in the global economy and smartphone market.”
Due to the uncertainties in the global economy and the smartphone industry, OPPO has to make difficult adjustments for long-term development. Therefore, the company has decided to cease the operation of ZEKU.
This change will not affect devices that (are) already using the MariSilicon X.
OPPO via Android Authority
Oppo is one of the most well-known Chinese smartphone manufacturers, coming in at fourth in quarterly worldwide shipments. However, IDC data shows that Oppo’s shipments fell 22 percent last year to 103 million devices as the smartphone market contracted.
To create chips for its products, Oppo founded Zeku in 2019. This action was quite similar to one taken by Huawei Technologies, a competitor, with its HiSilicon division. A number of other Chinese smartphone manufacturers, Xiaomi included, have also established their own chip businesses.
US Sanctions Have Made it Difficult for Semiconductor Facilities In China to Progress
The shutdown occurs as the US continues to impose export restrictions on sophisticated semiconductors, making it difficult for Chinese fabless chip design businesses to acquire chips. Wei Shaojun, head of integrated circuit design at the China Semiconductor Industry Association (CSIA), said that of the 3,243 fabless chip manufacturers in China in 2016, only 566 had revenues exceeding 100 million yuan (US$14.4 million).
It is getting more difficult for China’s fabless enterprises to find manufacturers for their designs due to restrictions that ban the export of sophisticated chips employing US-origin technology.
After the United States sanctioned Huawei, the world’s biggest contract chip producer, Taiwan Semiconductor Manufacturing Co (TSMC), stopped accepting orders from HiSilicon. While Washington hasn’t gone after Oppo in particular, new restrictions on exports to China that went into effect in October essentially prohibit the shipment of any chips or chip-making equipment that are sufficiently advanced without prior clearance from the US government.
Oppo’s first in-house image processor, MariSilicon X, made its debut with the Find X line of smartphones in December 2021. TSMC’s 6-nanometer node process, which is currently below the 14-nanometer threshold of Washington’s penalties, was used to produce the device.
Given that Oppo employed its own bespoke chipsets for image operations in the Find X6 Pro, the advancement was definitely wonderful, but we’re betting this closure means we won’t see future MariSilicon chips.
