According to a report from China Media Jiwei, there are recent rumors suggesting that the Chinese smartphone brand OPPO may restart its chip design business and has begun recruiting former employees from ZEKU. In response, OPPO stated that the company has terminated its ZEKU business and declined to provide further comments.

On May 12th of this year, OPPO announced that due to global economic uncertainties and a volatile smartphone market, the company needed to make strategic adjustments to address long-term challenges. Following a decision by the Executive Management Team, the ZEKU business was terminated. The company is committed to handling all related matters resulting from this business adjustment and will continue to create value through its products.

ZEKU issued a notice stating that the company and its wholly-owned subsidiaries and branches would be dissolved starting from May 12th. They would also legally terminate all labor contracts. Starting on May 19th, they began signing compensation agreements with employees, providing compensation of N+3, and consolidating all May salaries into a single monthly payment. Social insurance and housing fund for May were also processed.

It is worth noting that before the business termination, ZEKU had a workforce of over 3,000 employees, with 2,500 of them based in China. In terms of personnel scale, it was one of China’s top-tier chip design companies. Established four years ago, ZEKU attracted talent from well-known chip design enterprises such as Spreadtrum, Hisilicon, Qualcomm, as well as recruiting numerous talents from renowned domestic microelectronics institutions through campus recruitment efforts.

(Photo credit: OPPO)

Major economies are investing heavily in semiconductor industries, with China leading at $143 billion, the U.S. at $52.7 billion, and the EU at $47 billion, according to “EE Times”. India plans to give $922 million amid U.S.-China tensions.

Despite China’s much larger subsidies compared to India’s, the Chinese semiconductor industry faces various challenges. But under mainly from the United States, to slow down its progress, some Chinese companies are struggling to survive, while others are shutting down. For instance, after OPPO’s unexpected announcement in May to close their IC design company ZEKU, active for less than 4 years, Holding Group, Geely, also declared on August 8th that it would halt its self-developed chip business through the Xingji Meizu group, only 5 months after its launch.

According to a recent report from ‘EE Times,’ governments from around the world are actively pursuing semiconductor self-sufficiency to meet their high-tech and communication needs. China, in particular, has taken the lead by planning a substantial $143 billion subsidy program to boost its industry and reduce dependence on the United States.

In the U.S., the ‘Chips ACT’ passed last year allocated $52.7 billion in subsidies. As per McKinsey, the cumulative commercial investments related to this endeavor have already exceeded $200 billion.

The European Union is also making its mark, aiming to increase its global semiconductor market share from 10% to 20% by 2030. The ‘European Chips Act’ is expected to see $47 billion in government investment. TSMC has confirmed plans to establish a factory in Germany and is expected to receive relevant subsidies.

Singapore is projecting a $19 billion subsidy for its semiconductor industry, while Japan’s exact subsidy scale remains unknown, with reports suggesting a minimum of $6.5 billion. South Korea is focusing on tax reductions for semiconductor-related companies, offering 15% tax credits for corporate groups and up to 25% for small and medium-sized enterprises.

Recently, the UK and India have joined the battle. The UK has set aside a $1.5 billion subsidy, and India’s ‘Semicon India’ initiative offers at least $922 million to bolster its influence in the global electronics supply chain. While Malaysia hasn’t disclosed the amount of support for its chip industry, the country is providing approved priority industries, especially high-tech firms, with a full 10-year tax exemption. The government also offers investment subsidies and various incentives within specific investment zones.

Amidst U.S. restrictions, China initially aimed to boost its chip industry and create its own ‘China chips.’ However, setbacks have occurred. OPPO’s IC design company, ZEKU, formed in 2019, spent a staggering $44 billion over three years only to shut down on May 12th, leaving 3,000 employees jobless. Geely Holding Group’s subsidiary, Xingji Meizu, also announced on August 8th their decision to halt self-developed chip operations due to global economic uncertainties. Their focus will now turn to product innovation and software user experiences.

(Source: https://ec.ltn.com.tw/article/breakingnews/4392195)