Smartphone maker OPPO has shut down its chip design subsidiary called Zeku as the semiconductor market goes through a heavy slump, The South China Morning Post reported.
Zeku employees received less than a day’s notice about the unit being shut down. OPPO set up Zeku in 2019 to design chips that could be used in its devices. Other smartphone makers, including Xiaomi, have also set up their own chip-design verticals.
The move came as chip manufacturing has been severely affected in China by escalating US export restrictions targeting advanced semiconductors.
Out of 3,243 fabless chip firms in China last year, only 566 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).
Global semiconductor revenue is projected to decline 11.2 percent to reach $532 billion in 2023.
The semiconductor market achieved marginal growth of 0.2 percent to $599.6 billion in 2022, according to the latest forecast from Gartner.
The PC, tablet and smartphone semiconductor markets will represent 31 percent of semiconductor revenue in 2023 and total $167.6 billion.