Chinese mobe-makers play a long game with homebrew chips
Modest, low-volume chips will pay off over time, apparently
Chinese supply chain analyst outfit Jiwei has suggested local smartphone makers are having limited success with their attempts to create homegrown silicon.
Jiwei reports that Oppo pledged in 2019 to spend over $7 billion on its own silicon, and has since delivered a fancy image signal processor and a Bluetooth audio processing chip.
Analyst Wang Xiaofang has suggested those chips are yet to be mass produced and won't be used in many Oppo models because they're not mature compared to kit Oppo can buy off the shelf.
The analyst also opines that Oppo is a long way from being able to build modems for its devices, and that local alternatives such as those from Huawei are sound products – but that Chinese manufacturers still need to shop offshore to meet their needs. The same problems confront Xiaomi, the analyst said.
CPUs or systems-on-a-chip are also out of Oppo's reach for the foreseeable future.
That's good news for the likes of Qualcomm and MediaTek, which currently dominate sales of mobile silicon to all players.
Chinese manufacturers are acutely aware of their dependence on overseas suppliers. US sanctions have shown that parts can become impossible to access if Washington wills it. Building their own chips is one way to reduce the risk of geopolitics interfering with their businesses.
But as Wang points out, Oppo's efforts have produced just two pieces of silicon in two years, they won't be available in volume until later in 2023, and even then won't be widely used. Which looks like failure.
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Wang's take is that Oppo's own silicon will initially be used to differentiate some of its devices, even as it keeps importing parts to build products sold at other price points.
That plan will bear fruit as the economy returns to growth and consumers are again comfortable to shop for premium products. When that happens, Oppo will deploy its homebrew silicon to meet demand. In years to come, it is to be hoped that its chips will have matured enough to be used in more of its products.
At which point it's presumably Qualcomm’s and MediaTek's turn to have trouble in China. ®