Last month, big news emerged from China’s semiconductor industry: Oppo announced it was largely disbanding its Zeku chip division. This story may not have received much attention.
Last month, big news emerged from China’s semiconductor industry: Oppo announced it was largely disbanding its Zeku chip division. This story may not have received much attention in the US, but we believe it’s significant, meriting mention in the broader context of non-chip companies designing their own chips. We’ve long discussed this topic as more and more companies attempt the feat. Does Oppo’s move signify a turning point? Will we see more companies abandoning these projects?
First, some background. Due to a variety of reasons, the past decade’s economic landscape has enabled large chip consumers to enter the market of chip design. Well-known examples include Apple’s M-Series CPU and Google’s TPU AI accelerator, but there are many more.
Editor’s Note:
Guest author Jonathan Goldberg is the founder of D2D Advisory, a multi-functional consulting firm. Jonathan has developed growth strategies and alliances for companies in the mobile, networking, gaming, and software industries.
This trend extends beyond big tech companies to the likes of John Deere and Wi-Fi access point maker, TP Link. Our thesis is that companies only undertake this when the chip conveys some form of strategic advantage; designing a chip solely for minor cost-saving is not a profitable proposition.
