Caixin
Jun 08, 2020 07:59 PM
BUSINESS & TECH

Smartphone-Maker Oppo Jumps on the Custom-Made Chip Bandwagon

Oppo is just the latest Chinese smartphone-maker to announce plans to step up chipmaking efforts amid the ever-growing competition of the 5G era.
Oppo is just the latest Chinese smartphone-maker to announce plans to step up chipmaking efforts amid the ever-growing competition of the 5G era.

Top smartphone-maker Oppo’s China head confirmed the company will develop custom-made microprocessors to differentiate its gadgets in an interview with Caixin.

Producing its own chips will not be easy, but it is a step Oppo will have to take, said Liu Bo, president of the company’s China business. “We have to tackle the chip technology and make the technology the crucial driving force for our future growth,” Liu said Thursday.

Liu’s statement confirmed rumors that had been swirling for weeks about the second-largest Chinese smartphone-maker’s new strategy.

Liu said Oppo will start by working with key suppliers to design and develop chips for its own smartphones. Oppo’s main partners in the endeavor include U.S. giant Qualcomm Inc., Taiwan-based MediaTek Inc. and South Korea’s Samsung Electronics Co. Ltd., Caixin has learned. He did not comment on whether the company will take the next step to develop its own chip system.

Since 2019, Oppo has been hiring chip engineers and several high-level executives from its suppliers including MediaTek, the world’s second-largest mobile chip developer after Qualcomm, and Spreadtrum Communications Inc., a chipmaker owned by Tsinghua Ungroup Co Ltd. Within the company, Oppo also announced a scheme in February called “the Mariana Plan,” which is dedicated to self-developing chips, according to local media reports.

Oppo’s announcement comes as rival smartphone-maker Huawei faces enormous uncertainty over its own supply of custom-made chips, after the U.S. effectively banned companies that use American equipment — including its main manufacturer, Taiwan Semiconductor Manufacturing Co. — from doing business with the Shenzhen-based firm.

Oppo is just the latest Chinese smartphone-maker to announce plans to step up chipmaking efforts amid the ever-growing competition of the 5G era.

Although standard chip designs are usually more readily available and usually cheaper than custom-built ones, many electronics-makers have started looking into customizing or creating their own chips in order to differentiate their products and end their reliance on external suppliers as they seek to increase their market share and make themselves more competitive in the long term, industry veterans told Caixin.

Vivo, another top Chinese smartphone-maker, sent a research and development team of some 500 people to work on site with Samsung engineers after announcing in November it would begin using the South Korean company’s

Exynos 980 5G chip. Xiaomi Corp., one of the world’s five-biggest smartphone-makers, set up a chipmaking unit in 2014, but it has not introduced an updated mobile chip design since it unveiled the first one in 2017.

Vivo made it clear to Caixin in November that its cooperation with Samsung will be focused on custom-made chips, and it was not planning to design and produce those chips on its own. Oppo’s initial strategy is similar to Vivo’s, Caixin learned after the interview with Liu.

Oppo’s global smartphone shipments slumped 11% year-on-year to 22.6 million units in the first quarter, according to data from market consultancy Strategy Analytics.

Contact reporter Isabelle Li (liyi@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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