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China’s Oppo has joined the race to develop its own smartphone chips

Taipei — Oppo, China's leading smartphone maker, is developing high-end mobile chips for its high-end phones to gain control of core components and reduce its dependence on foreign semiconductor suppliers Qualcomm and MediaTek.
The world's fourth-largest smartphone maker plans to use its own mobile on-chip system (SoC) in handsets launched in 2023 or 2024, depending on the pace of development, two people familiar with the matter told Nikkei Asia.
Oppo thus joins smartphone makers including Apple, Samsung and Xiaomi, all of which are developing their own processors.Google on Tuesday unveiled The Pixel 6, its first smartphone to use a Tenor mobile processor.
In-house development of critical chips could also strengthen supply chain controls and potentially ease widespread shortages and disruptions.
Oppo is seeking to use 3-nanometer chip production technology provided by Taiwan Semiconductor Manufacturing Co LTD, the sources said.That would make it part of the second wave of TSMC customers using the cutting-edge technology, after Apple and Intel.
This shows Oppo's commitment to developing high-end mobile chips that can compete with the world's top semiconductor developers, the sources said.
Internally designed processors have become a hallmark of the world's leading smartphone brands.A decade ago, Apple began installing A-series mobile processors in iphones.Huawei Technologies Co., once the world's largest smartphone maker, made a name for itself with its Kirin processors, but before a U.S. crackdown on the company derailed its consumer-electronics business.
Oppo has been ramping up investment in chips since the US crackdown on Huawei.The company has hired top chip developers and AI experts from MediaTek, Qualcomm and Huawei, and continues to hire in the US, Taiwan and Japan, according to industry executives and job postings.

The company is also working on its own artificial intelligence algorithm and a custom image signal processor for the phone's camera.Domestic rivals Xiaomi and Vivo have also launched their own image signal processing devices, as more smartphone buyers base their purchases on advanced photo and video features.
Image signal processors are less difficult to develop than monolithic systems, which require a combination of central processing and graphics capabilities, security and connectivity, and integration with a given operating system.
Xiaomi was one of the first Smartphone makers in China to set up a semiconductor design team, back in 2014, and its smartphones currently do not use any internal processors.Most Oppo and Xiaomi flagship smartphones use Qualcomm's high-end Snapdragon chipset.
Eric Tseng, chief analyst at Isaiah Research, told Nikkei Asia that smartphone makers are racing to deploy their own processors with the risk that the chips may not perform as reliably as standardised offerings from existing suppliers.
"That's why we haven't seen a lot of companies take the bold step of using their own mobile processors, and why most companies started by developing image signal processing chips."
Brady Wang, an analyst at Counterpoint, told Nikkei Asia that for most smartphone makers, there are two main benefits to having their own mobile processors: differentiation and better supply chain control."If everyone is using Qualcomm chipsets on their flagship phones, it's hard to say you have unique capabilities and products," he said."At the same time, during chip shortages, you have to compete with competitors for the allocation of chips and resources and have no direct knowledge of the chip supply chain."
But so far, the in-house chip efforts have paid little dividends, Wang added."After Apple, Huawei and Samsung, we still don't see great success stories," he said.After all, there are barriers to entry and a sustained effort by a large team, just like complex systems integration.As chip manufacturing technology improves, so does the cost."
Oppo declined to comment on the specific progress of chip development, but said the company's core strategy is to produce good products."Any investment in R&D is aimed at enhancing product competitiveness and user experience," Oppo told Nikkei Asia.TSMC declined to comment.

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