OPPO abruptly closes its chip design division

OPPO has suddenly closed its chip design division, reports the South China Morning Post, among others. OPPO says the move is motivated by “uncertainties in the global economy and smartphone market.”

Reportedly employees of the so-called Zeku department were told on Thursday that they could no longer come to work on Friday. Even picking up a laptop at the office was no longer possible. Zeku would also publish vacancies just two weeks ago to attract more staff. The SCMP asked for more comment, but received no.

Zeku was founded by OPPO in 2019 as a ‘fabless’ chipmaker. That is, Zeku designs and sells the chips, but outsources the production of the wafers to third-party factories, such as TSMC. This makes such companies more vulnerable to market conditions, but also to geopolitical tensions. Zeku worked on chips for WiFi, Bluetooth and audio and in Shanghai it has about two hundred patents to its name, Bloomberg inquired. The MariSilicon brand name is a product of Zeku, for example, and in December another rumor circulated that OPPO would release its own smartphone soc in 2024.

The United States still has export restrictions against China on technology with a process of 14nm and smaller. As a result, US companies cannot do business with OPPO and Zeku, which hinders the licensing and use of US fabs. In addition, the global smartphone market is currently not growing. In the fourth quarter of 2022, that market contracted by 18.3 percent, the largest decline ever, according to IDC. On an annual basis, OPPO’s sales are shrinking by 22.7 percent. OPPO is a sister company of OnePlus, Vivo and realme.