Chinese smartphone maker Oppo abruptly closes chip design unit Zeku, another casualty in semiconductor sufficiency drive
- Oppo, the fourth largest smartphone brand in the world, announced the move in a short statement on Friday after giving employees less than a day’s notice
- As China pushes for chip self-sufficiency, fabless firms are finding it difficult to sign on manufacturers of their designs amid US export restrictions
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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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.
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 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.