OPPO has abruptly shut down its chip design division, reports the South China Morning Post, among others. OPPO says the move was motivated by “uncertainty in the global economy and smartphone market”.

It said On Thursday, employees of the so-called Zico department were told they could no longer come to work on Friday. Even picking up a laptop in the office is no longer possible. Zeku will also post job vacancies just 2 weeks ago to attract more employees. SCMP requested, but did not receive, further comments.

Zeku was founded by OPPO in 2019 as a “fabless” chipset manufacturer. That is, Zeku designs and sells chips, but produces Chips Outsourcing to third-party manufacturers, such as TSMC. This makes such companies more vulnerable to market conditions, but also to geopolitical tensions. Zeku has worked on WiFi, Bluetooth and audio chipsets and in Shanghai has around two hundred patents to its name, Bloomberg inquired. The brand name MariSilicon is a product of Zeku, for example, and in December another rumor spread that OPPO would release its own smartphone soc in 2024.

The US still restricts the export of technology to China with the 14nm process and smaller. As a result, US companies cannot do business with OPPO and Zeku, which hinders the licensing and use of American fabs. In addition, the global smartphone market is currently not growing. In the fourth quarter of 2022, this market shrank by 18.3 percent, the largest decline ever, according to IDC. On a yearly basis, OPPO’s sales shrank by 22.7 percent. OPPO is a sister company of OnePlus, Vivo, and realme.