Chinese smartphone maker Oppo abruptly closes chip design unit Zeku, another casualty in semiconduct
Oppo announced the move on Friday with a brief statement, blaming “uncertainties in the global economy and smartphone market” and calling it a “difficult decision”.
The news came as a surprise to Zeku employees, who received less than a day’s notice. One employee, who declined to be named, told the South China Morning Post that workers were told on Thursday not to go into the office the next day. “I can’t even go back to the office to get the laptop,” the employee said.
Oppo declined to comment beyond its Friday statement.
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Just two weeks ago, Zeku was still publishing ads looking for new workers. Job postings covered dozens of positions including for a chip architecture engineer, chip verification and software coders at locations in Shanghai, Beijing, Chengdu and Xian, according to its official recruitment channel on WeChat.Oppo is one of the largest Chinese smartphone brands, ranking fourth in global shipments in the first quarter. However, as the smartphone market has declined, Oppo shipments have taken a hit, falling 22 per cent last year to 103 million units, according to data from IDC.
Oppo set up Zeku in 2019 to design chips that could be used in its gadgets. The move was similar to what rival Huawei Technologies had already done with its HiSilicon subsidiary. Other Chinese smartphone makers, including Xiaomi, have also set up their own chip ventures.Zeku’s website describes the business as a state-of-the-art semiconductor systems provider with offices in San Diego and Palo Alto in California and Yokohama, Japan. The company has not provided payroll numbers, but employees at the company estimated that it had nearly 3,000 workers after years of aggressive recruitment.
The closure comes amid a tough environment for fabless chip design firms in China, where chip acquisition has been hampered by escalating US export restrictions targeting advanced semiconductors. Out of 3,243 fabless chip firms in China last year, only 566 had sales above 100 million yuan (US$14.4 million), according to Wei Shaojun, president of integrated circuit design at the China Semiconductor Industry Association (CSIA).
Under sanctions that restrict the export of advanced chips using US-origin technology, it is becoming increasingly difficult for China’s fabless firms to find manufacturers for their designs.
In December 2021, Oppo unveiled its first in-house image processor called MariSilicon X, which debuted in the company’s Find X series smartphones. TSMC manufactured the chip using its 6-nanometre node process, which is now under the 14-nm threshold of Washington’s sanctions.In late 2022, Oppo unveiled its second in-house chip focusing on enhancing Bluetooth audio performance.
Oppo has never disclosed how much it invested in Zeku prior to shutting it down.
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