As poor worldwide demand compels major mobile manufacturers to cut costs and restructure, Oppo is disbanding its youthful chip design subsidiary Zeku.
The decision surprises those who believe the phone maker is expanding its in-house chip development as escalating geopolitical tensions with the U.S. threaten to cut Chinese enterprises off critical suppliers. As a result, Oppo will likely return to third-party chip partners.
Canalys said Oppo finished Q1 2023 as the fourth-largest smartphone vendor, but its shipment declined by 8%. All five major phone companies except Apple saw shipments drop. Global smartphone sales fell 13% in the quarter.
Today, Oppo addressed its decision to downsize its promising chip team: “Due to the uncertainties in the global economy and the smartphone industry, we have to make difficult adjustments for long-term development. Thus, the corporation has discontinued Zeku.”
Zeku introduced MariSilicon X, a neural processing unit that uses machine learning to improve photo and video performance, in December 2021. In addition, Zeku established a Palo Alto research base.
According to its LinkedIn page, Zeku hired over 100 people a month until its unexpected demise. Zeku’s nearly 2,000 employees are uncertain how the transfer will affect them. “The company will properly arrange related matters and continue to deliver great products and service to users worldwide,” Oppo says of the team’s location.
Oppo’s withdrawal from chips indicates another Chinese phone company’s effort to control the semiconductor supply chain. After Trump-era penalties cut Huawei from major foundries, its HiSilicon chip design failed. As a result, Huawei spun out its inexpensive handset brand, Honor, to avoid sanctions that have crippled its consumer business.