OPPO closed its chip business unit Zhe Ku, reminiscent of previous statistics from domestic chip companies. It is reported that China collapsed more than 5000 chip companies in 2022, indicating that the development of domestic chips is far less optimistic than expected.

Tens of thousands of chip enterprises have emerged in the domestic chip industry for several years, which makes people think that China's chip industry has been in a stage of rapid breakthrough. However, the closure of the chip department by OPPO and the collapse of more than 5000 chip enterprises shown by previous statistics have uncovered some disadvantages of the domestic chip industry, and it can be said that their fig leaf has been torn off.

Chip research and development is far from as simple as the industry imagines. People in the industry point out that R & D chips only obtain patent authorization from ARM, which is calculated in terms of tens of millions of yuan. Once the chip design has defects, then tens of millions of these will be wasted. The mobile phone processor previously developed by a domestic mobile phone will eventually lead to hundreds of millions of yuan lost because the technology failed.

The closure of the chip business department by OPPO once again reminds the difficulty of chip research and development. It is reported that the chip developed by OPPO is also a mobile phone processor, using ARM's public edition CPU and GPU core, which is far from the mobile phone SOC chip; what is more difficult for the mobile phone SOC chip is the baseband chip, which can be seen from the fact that Apple has not succeeded in developing the baseband chip for so many years, while many domestic chip companies are weaker than Apple and OPPO.

There is also a major problem for domestic chips, that is, chip manufacturing, and there is a huge amount of investment in advanced technology. TSMC's investment in building 5-nm and 3-nm factories in the United States is expected to be as high as 40 billion US dollars. Such a huge investment is prohibitive even for the most powerful technology enterprises in China, not to mention many technical problems faced in the research and development of advanced technology, while advanced chip equipment is difficult to obtain.

People in the industry pointed out that more than 5000 chip companies that have fallen since last year, many of which rely on chip companies such as chip subsidies, have failed to find the right market, and after getting chip subsidies, they are almost helpless in the face of huge chip research and development investment and chip technology problems, which is an important reason for their rapid collapse.

Of course, compared with these more than 5000 chip companies, OPPO's financial strength is much stronger, it is reported that OPPO is expected to invest 50 billion yuan in chip research and development, while the current cost is only more than 10 billion yuan, and OPPO also invited many technology bigwigs such as former MediaTek executives Zhu Shangzu, which shows the strength of OPPO's bet on chip research and development.

However, with such strength of OPPO even quickly admit defeat, how many other domestic chips can be as strong as OPPO, and how many of these young domestic chip companies can survive when the chip industry is entering a downward phase? It can be expected that with OPPO shutting down the chip business, the domestic chip industry may usher in a new round of closure.

Domestic chips may also face siege from the overseas chip industry. Qualcomm said it will further reduce the price of mobile phone chips, hoping to seize the market by reducing the prices of middle and low-end chips. Qualcomm is not only familiar with mobile phone chips, but also WiFi, radio frequency chips, and so on. With the price reduction of overseas chip companies such as Qualcomm, new domestic chips are more likely to be eliminated.

Of course, these things that have happened in the chip industry are not all bad things. It has been nine years since the establishment of the Integrated Circuit Industry Fund in 2014, and tens of thousands of domestic chip enterprises cultivated in the past nine years have come to find a way out. Those with market competitiveness are bound to stand out. After the market eliminates a large number of uncompetitive chip enterprises, it will provide a broader space for the development of these domestic chip enterprises. To form the trend that the strong are always strong, and finally the rise of domestic chips that are really competitive, that is the enterprise that really competes with overseas chip enterprises.