From the United States banning ZTE and prohibiting American companies from selling parts to ZTE, to suppressing Huawei , the importance of chips is self-evident. Since the Huawei and ZTE incidents, China has been vigorously developing chip technology, and domestic substitution has become the only way for China now and in the future. OPPO has recently accelerated the construction of its chip team and hired Zhu Shangzu, former COO of MediaTek . At the same time, VIVO is not lagging behind and is cooperating with Samsung to develop chips.
1. China’s IC self-made rate will only reach 20% in 2024
IC Insights published a research report stating that China’s self-made chips accounted for only 15.7% of the US$125 billion IC market in 2019, slightly higher than 15.1% five years ago. The agency predicts that this proportion will increase by 5 percentage points to 20.7% in 2024, which will fall short of the 70% self-made rate set by Made in China 2025. China lacks local non-memory IC technology, which is an important issue that many people ignore.
Currently there are no large analog IC, mixed signal IC, server MPU, MCU or special logic IC manufacturers in China. These IC products accounted for more than 50% of China's IC market last year, and are dominated by established foreign companies. Everyone is focusing on memory right now, but for China, self-sufficiency in non-memory ICs is a bigger problem. IC Insights believes that it will take decades for Chinese companies to become competitive in the non-memory IC market.
2. OPPO has increased the design of its own mobile chip
. The design of the mobile phone chip is a "narrow escape" adventure. It integrates a series of components such as CPU, GPU, Wi-Fi module, communication baseband, GPS module component, ISP, DSP, etc. Only an SoC chip can be born.
Last year, as the United States suppressed Chinese technology companies such as Huawei, OPPO began to increase its efforts to design its own mobile chips, including poaching top engineering talents from its suppliers. OPPO has hired several top executives from its key chip supplier MediaTek and numerous engineers from Unisoc, the country's second-largest mobile chip developer, to build an experienced chip team in Shanghai, people familiar with the matter said.
OPPO’s recent recruitment of senior executives includes former MediaTek COO Jeffrey Ju, who already serves as a consultant at OPPO. There are also rumors that an executive involved in the development of MediaTek's 5G smartphone chips will also join OPPO within a month or two. In addition, OPPO has also contacted talents from Qualcomm and Huawei’s independent chip department HiSilicon Semiconductor.
For Zhu Shangzu, he joined MediaTek in 1999 and served as manager of the Digital Consumer Electronics Division and the Digital Camera Chip Division. In 2010, he began to establish the MediaTek smartphone chip division and led the team from scratch to an annual revenue of US$4 billion. It has made a huge contribution to MediaTek becoming the world's second largest smartphone chip supplier.
At the end of 2015, Cai Mingjie also announced that Zhu Shangzu would be his successor. Unexpectedly, just over a year later, MediaTek's mobile phone chip share declined. Cai Mingjie immediately asked former TSMC CEO Cai Lixing to serve as co-CEO, and Zhu Shangzu was demoted to a consultant. , and sadly left MediaTek in July. After Zhu Shangzu resigned, Lei Jun, CEO of Xiaomi Technology, had an in-depth discussion with him. He only transferred to Xiaomi four months after leaving MediaTek. Lei Jun said that Xiaomi poached Zhu Shangzu mainly to help it achieve greater success in industrial investment.
OPPO stated that the company already has chip-related capabilities and "any R&D investment is aimed at improving product competitiveness and user experience," but did not directly respond to recent executive recruitment initiatives. Recruiting industry veterans with decades of development experience could help OPPO accelerate its chip goals. Analysts believe that designing its own customized chips may help OPPO reduce its dependence on U.S. suppliers and compete in overseas markets where Huawei is currently struggling. But industry insiders say the effort will be costly and could take years to bear fruit.
3. Vivo and Samsung formed an alliance to develop 5G chips
Earlier than OPPO, vivo had already joined hands with Samsung to hold an Exynos 980 dual-mode 5G AI chip communication meeting in Beijing on November 7, 2019, and planned to build a self-made chip team. And it has formed an alliance with Samsung. In the future, Samsung will assist vivo in developing related 5G chips. At the communication meeting, vivo introduced its level of participation in this joint research and development: it contributed 400 functional features, jointly solved nearly 100 technical problems at the hardware level, invested more than 500 engineers, and the joint research and development time lasted nearly 10 months. ...
This is not only vivo’s short-term plan, but also vivo’s consideration Long-term strategy after market characteristics: "Chip design already has a complete development process, with corresponding design tools, including the cooperation of foundries. The core is on the front end, and we will do what we think is right, that is, cooperate with Let’s work together on chip design. This is not just about the next two years, but also the next four or even six years, what direction should vivo take.” said Hu Baishan, vice president of vivo.
Regarding the reason for strengthening manufacturers’ dominance over chips, Hu Baishan said that it is to follow up on consumer demand more quickly and avoid the passive situation of mobile phone manufacturers. "After the first tape-out, we discuss whether the specifications are suitable or how to change them later. If consumer demand changes during this period, the cost of this will be huge for both parties."
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Since OPPO and vivo are MediaTek’s top customers, the two major customers are actively increasing the proportion of independent chip development, which may affect MediaTek’s future order momentum. It can be expected that OPPO will follow the models of Huawei and Samsung in the future and design high-end chips by itself, which means that the high-end market that MediaTek has been actively developing in recent times will shrink again.
MediaTek does not comment on market rumors, but MediaTek Chairman Cai Mingjie pointed out many years ago that it is a general trend for customers to establish independent chip teams. What MediaTek can do is to try its best to meet customer needs and expand various customers, application product levels and quantity.
