Advertisement
Smartphone giant Oppo’s closure of chip design unit Zeku triggers speculation on cause of action, as 3,000 engineers are laid off
- Economic uncertainties prompted Oppo to close Zeku and dismiss nearly 3,000 engineers in one of the country’s largest semiconductor industry lay-offs
- Speculation among Chinese analysts cite an effort to avoid potential US trade sanctions as another reason for shutting down Zeku.
Reading Time:3 minutes
Why you can trust SCMP
1
Che Panin Beijing
Chinese smartphone giant Oppo’s sudden move to disband its in-house chip design unit, Zeku, has triggered heated speculation on the mainland on the factors behind this action, which involved dismissing nearly 3,000 engineers in what could be one of the largest semiconductor industry lay-offs in the country.
Oppo last Friday announced Zeku’s shutdown through a brief statement, which blamed “uncertainties in the global economy and smartphone market”, and called it a “difficult decision”.
“The obvious factors at this point are the economic slowdown and the need to retain profits,” said Shobhit Srivastava, a senior analyst at tech research firm and consultancy Omdia. “It is not an easy task to maintain a chip division [because] its takes significant investment as well as partner support for success.”
But there has also been speculation among Chinese analysts about non-financial factors as reasons for shutting down Zeku, including an effort to avoid potential US trade sanctions.
While there has been no talk or reports of Oppo as a blacklist target, Washington has already made struggling telecommunications equipment manufacturer Huawei Technologies Co, which runs advanced semiconductor design firm Hi-Silicon, an example of how trade restrictions could damage businesses.
Che Pan joined the SCMP in 2020 and covers China tech news with a focus on semiconductors and AI. Previously, he covered China's economy at Caixin. Che graduated from Sciences Po Paris with a master degree in financial regulations and risk management.
Advertisement