Oppo closes chip design business amid global smartphone market decline

Oppo is closing its chip design business due to the prolonged decline in the global smartphone market. The company is ceasing operations of its Zeku unit, which was set up in 2019 to develop applications processors, modems, and other connectivity solutions.

Oppo has suffered double-digit shipment drops over the past year and, like other handset manufacturers, is facing a glut of inventory. China's smartphone market, the world's biggest, has led to a sharp drop in demand that's lasted for over a year. The country's reopening following stringent Covid Zero restrictions has been slow to translate into a rebound in consumer demand so far.

Oppo is one of the first major Chinese tech firms to retreat from the chip sector, after a wave of investment in past years by electronics players wary of tightening US export curbs. The company's decision is a sign of the challenges facing the smartphone industry as it grapples with a slowdown in demand and rising costs.