Smartphone maker Oppo has shut down its chip design subsidiary Zeku as the semiconductor market is going through a severe downturn, media reported on Friday.
According to the South China Morning Post, Oppo announced the move in a brief statement, calling it a “difficult decision” and blaming the “uncertainty in the global economy and smartphone market”.
The report claimed that Zeku’s employees received less than a day’s notice about the unit’s closure.
The global technology brand set up Zeku in 2019 to design the chips that can be used in its devices. Other smartphone makers, including Xiaomi, have also established their own chip-design verticals.
The move comes as chip manufacturing in China has been severely hit by increasing US export restrictions targeting advanced semiconductors.
According to Wei Shaojun, president of integrated circuit design at the China Semiconductor Industry Association (CSIA), “out of 3,243 fabless chip firms in China last year, only 566 had sales of more than 100 million yuan ($14.4 million).”
Global semiconductor revenue is projected to decline 11.2 percent in 2023 to reach $532 billion, and the short-term outlook for the semiconductor market has deteriorated further.
According to Gartner’s latest forecast, in 2022, the market will total $599.6 billion, a slight increase of 0.2 percent from 2021.
The PC, tablet, and smartphone semiconductor markets are stabilizing. The combined market will represent 31 percent of semiconductor revenue in 2023 and total $167.6 billion.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
