Oppo disbands its chip design division due to declining sales.

According to TechCrunch , this decision came as a surprise to those who believed Oppo was pushing ahead with its own chip development amid rising geopolitical tensions and the threat from the US to cut off Chinese companies from major chip suppliers. Therefore, Oppo will likely revert to relying on third-party partners in the near future.

Oppo's attempt to develop its own chips has been shut down after about two years of operation.

Although Oppo was the fourth-largest smartphone supplier globally in Q1 2023, research firm Canalys reported that the company's sales declined by 8%. Aside from Apple, all five top smartphone manufacturers experienced sales drops. Overall, the global smartphone market contracted by 13% in the first quarter of the year.

In a statement explaining its decision to cut its previously promised chip manufacturing workforce, Oppo said: "Due to uncertainties in the global economy and the smartphone industry, we have had to make difficult adjustments for long-term growth. Therefore, the company has decided to cease operations of Zeku."

In December 2021, Zeku unveiled its first self-developed chip, the MariSilicon X – a processor designed to improve image and video performance through machine learning. Zeku also established a research facility in Palo Alto, USA. Notably, according to the company's LinkedIn profile, Zeku was still hiring for over 100 positions last month. Therefore, the end of Zeku comes as a surprise.

It is unclear how this move will affect the more than 2,000 employees currently working at Zeku. Previously, the company had offered competitive salaries to attract talent from other established chip companies. Oppo is currently keeping its future plans for this group of employees under wraps, only stating that "the company will streamline related issues and continue to provide excellent products and services to users worldwide."

Oppo's withdrawal from its own chip production signals another struggle among Chinese companies to gain control of the semiconductor supply chain. Huawei has lost access to advanced chips from the US due to sanctions, and its efforts to design its own high-end chips through HiSilicon have failed after the US blocked the company's access to major foundries. Huawei has had to abandon its budget phone brand Honor – a move seen as a way for the subsidiary to circumvent sanctions that have hampered Huawei's consumer business.

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