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Chinese smartphone manufacturers will not soon be able to provide their own chips.

Published: 2023-01-24

Analysts at Chinese company Jiwei, which studies local production chains, believe that the success of the semiconductor-related business in China has been very limited so far. Jiwei said Oppo pledged to spend more than $7 billion on its own chips in 2019, but has since introduced only an image signal processor (ISP) and a Bluetooth audio processing chip.

According to analysts, the developers have yet to organize mass production - it is unlikely that the chips will be used in many Oppo models, since the novelties are not “mature” enough compared to the finished products that Oppo can freely purchase.

Analysts believe Oppo won't be able to make modems for its smartphones anytime soon, and while local alternatives like Huawei's solutions are of some interest, Chinese businesses still need to bulk buy overseas to meet demand. The same problem, for example, applies to Xiaomi. What's more, no Chinese processors and chipsets are expected to ship for the foreseeable future, which is certainly good news for companies like Qualcomm and MediaTek, which dominate the mobile semiconductor market.

Of course, Chinese manufacturers are well aware of their dependence on foreign suppliers. US anti-Chinese sanctions have shown that some components are literally impossible to buy in significant quantities unless Washington so wishes, which cannot but worry Chinese business. Creating our own chips will reduce the risks of geopolitical influence on the relevant sectors of the economy.

However, so far Oppo has managed to release only two kinds of semiconductors in two years, which is clearly not enough - even they will not be available in significant quantities until a certain period in 2023, and even after that they will not be widely used. In other words, the project does not seem to have been particularly successful so far.

The company says that Oppo's own solutions will first be applied as the company's "distinctive" solutions. The plan could bear fruit if the world's economic growth starts to recover and buyers begin to show more interest in premium products again. When that happens, Oppo will have a ready-made solution to meet growing demand - if by then the chips are mature enough to be used in more models. If the long-term game of Chinese manufacturers really succeeds, Qualcomm and MediaTek may indeed have some problems, at least in China.