OPPO Layoff Chip Chipmaker

Oppo axes chip arm Zeku amid declining smartphone market

Zijing Fu

posted on May 12, 2023 5:13 pmEditor : Wang Boyuan

Oppo, one of China's leading smartphone manufacturers, is closing Zeku, the chip subsidiary. Zeku's sudden closure has been confirmed by Oppo and was result in “uncertainty in the global economy and the smartphone industry”. 

Oppo refused to comment further or disclose its future chip-making plans.

The Shanghai-based Zeku has previously invented the MariSilicon Y bluetooth audio chip and the MariSilicon X imaging chip, both of which were extensively integrated into the Oppo’s smartphone product lines, including Find and Reno. Oppo claims that the latest change with Zeku would not affect handsets that now use the MariSilicon X, although it is not yet clear if the company will continue to sell MariSilicon chips in any other capacity or discontinue it entirely.

The termination of Zeku occurred against the backdrop of a worldwide decline in the smartphone market. With 285.8 million phones supplied in 2017, China's smartphone shipments fell below 300 million for the first time in a decade. According to IDC, Oppo's market share in the Chinese smartphone market fell by roughly 4% in 2022, and its year-over-year growth shrank by 28.2%.

On April 24, not long before Zeku's demise, it was revealed that the chip manufacturer hired Sun Chengkun, the former leader of the AI team of the overseas team at BirenTech, a Chinese fabless semiconductor design business. Sun Chengkun was the former head of the AI team at BirenTech. Zeku's ambition and progress toward designing SoCs were signaled by the decision to assign Sun responsibility for the NPU's development.

Many people, including Zeku's employees, were surprised by the abrupt collapse of the company. Zeku's internal letter delivered today and posts on Maimai, a Chinese Glassdoor, both state that the business would be shut down on May 12. New graduates hired by the corporation who have not yet reported for duty have the option of joining and relocating to other Oppo divisions outside Shanghai or accepting the layoff compensation.

Most of the Zeku employees will be impacted by the closure of the business. Although the precise headcount is unknown, the company's prior job advertising indicate that there are at least 1,000–2,000 people on the staff.

In recent years, there have been booms and busts in the semiconductor business. While reasons including the expansion of the smartphone industry, the rise of artificial intelligence, and the demand for data storage increased, other elements like overcapacity, trade conflicts, and technical upheavals all had a role in the boom.

The abrupt demise of Zeku is hardly the first cautionary tale in the chip manufacturing sector.

China's top manufacturer of AI chips, Cambricon Technology, went public in 2020. In the first week after the IPO, the company's stock price increased from 64.39 yuan to 297.77 yuan a share, giving it a market worth of over 100 billion yuan. Nevertheless, the business has been losing money since 2017, with a total loss of about 2.8 billion yuan in five years, and apparently let go a significant portion of its workforce last month. Cambricon ascribed its losses on the significant R&D expenditure it made on sophisticated computing chips.