Oppo Is Pulling The Plug On Its Chip Design Unit. Here's Why

Handset maker Oppo is pulling the plug on its chipset design subsidiary amid falling shipments and an uncertain semiconductor market.

The company announced the move in a brief statement.

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Handset maker Oppo is pulling the plug on its chipset design subsidiary amid falling shipments and an uncertain semiconductor market, the media has reported. Oppo's chip design unit, called Zeku is being shut down amid the company's efforts to cut down costs and resize, says a report by TechCrunch.

The handset maker announced the move in a brief statement, calling it a "difficult decision" and blaming "uncertainties in the global economy and smartphone market", says a report by the South China Morning Post.

Oppo's smartphone shipments dropped 8 per cent in the first quarter (Q1) of 2023, according to market research firm Canalys. Other than Apple, all five of the top phone makers saw a decline in shipments. Also, the global semiconductor revenue is projected to decline 11.2 per cent to reach $532 billion in 2023, and the short-term outlook for the semiconductor market has deteriorated further.

To recall, Oppo's chip design unit Zeku first revealed chipset MariSilicon X in December 2021.

Earlier in March, in a bid to cut costs, smartphone brand Vivo and iQoo were in talks to merge their business, reports said. Vivo has reportedly said the merger of both brands into one is also to 'boost efficiency'. It is likely that the brand will be laying off some of its staff during the merger of the two handset makers.

According to a report by publication 36 Krypton, Vivo is working to combine iQoo's branding and online business teams with its own teams. The report cited a source close to the development and mentioned that Vivo's management is mulling to merge iQoo's brand, media strategy and other teams with its existing teams.

While it is known that Vivo and iQoo share R&D, supply chain and other resources, similar to OnePlus and Oppo, but iQoo handsets run software that is different from Vivo models.