OPPO, one of the largest Chinese smartphone brands, has closed down its chip design subsidiary, Zeku, according to company sources and former workers. The closure was due to the “uncertainties in the global economy and smartphone market”, according to the company.
Zeku was established in 2019 to design chips that could be used in OPPO devices, similar to what rival HUAWEI Technologies had already done with its HiSilicon subsidiary.
However, the closure of Zeku has come amid a difficult environment for fabless chip design firms in China, where the acquisition of chips has been hampered by escalating U.S. export restrictions targeting advanced semiconductors.
Last year, only 566 of the 3,243 fabless chip firms in China had sales above 100 million yuan ($14.4 million), according to Wei Shaojun, President of Integrated Circuit Design at the China Semiconductor Industry Association (CSIA).
With sanctions restricting the export of advanced chips using US-origin technology, it is increasingly challenging for China’s fabless firms to find manufacturers for their designs.
OPPO has not been specifically targeted by the U.S., but updates to U.S. export controls last October effectively ban the export to China of any sufficiently advanced chips or chip-making equipment without explicit approval.
This has made it difficult for Chinese fabless firms to access chip-making technology, and even for manufacturers such as Taiwan Semiconductor Manufacturing Co (TSMC) to accept orders from Chinese firms.
OPPO unveiled its first in-house image processor, MariSilicon X, in December 2021, which was manufactured by TSMC using its 6-nanometre node process. The chip is now under the 14-nm threshold of Washington’s sanctions. The performance of Bluetooth audio was the focus of the company’s second in-house chip, which it launched in late 2022.