Oppo, known mostly for its smartphones, but the company has investments in various different fields. It may come as a surprise, but one of these areas is chip design. The Chinese tech giant has been operating in this field for a while with a subsidiary called Zeku. However, up until now, it has not achieved any notable success. It seems that the company, tired of waiting, has decided to shut down Zeku and withdraw from the chip design business. Here are the details…

OPPO to Discontinue In-House Chip Production

Recently, Oppo has been making headlines with a series of bad news. Not long ago, we mentioned that the company might withdraw from France and even potentially halt its entire European operations. Now, Oppo has made the tough decision to cease operations of its chip development subsidiary, Zeku, in the face of economic uncertainty and a volatile smartphone market.

As you may know, when it comes to consumer electronics, it is necessary to depend on other manufacturers. There are many different components to consider, such as displays, processors, and batteries, and only a few companies can produce all of them in-house. For example, even if you manufacture most of these components yourself, like Samsung, you may still have to rely on external sources for performance-related reasons. However, like Apple, you can focus on producing the most critical and competitive components yourself. Although not easy, chip design was an investment in this area for Oppo.

However, the company has now shut down its chip design subsidiary, Zeku. This move has raised concerns for other Chinese companies striving for semiconductor self-sufficiency, as they navigate a challenging industry landscape. Zeku played a crucial role in Oppo’s chip development efforts, boasting a product line that included core application processors, short-range communication, 5G modems, radio frequency, ISPs, and power management chips.

The decision to terminate Zeku’s operations was announced through an official statement, citing global economic uncertainties and an unpredictable smartphone market. Oppo acknowledged the difficulty of the decision and expressed commitment to managing the situation responsibly while continuing to deliver quality products and value to customers. First, there were rumors of Oppo’s withdrawal from Europe, and now the cessation of Zeku’s operations raises more concerns. What is the reason behind these worrisome decisions?

Despite being one of the largest Chinese smartphone brands and ranking fourth in global shipments, OPPO has experienced a decline in shipments. According to data from IDC, shipments fell by 22% last year, totaling 103 million units. The company may foresee this decline continuing and wants to prepare itself for upcoming challenges in the future. Financial savings is one of the easiest ways to do this, and as you might expect, chip design is a costly business, especially if you’re not getting good returns.

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