Chinese smartphone manufacturer Oppo has announced the closure of its chip design unit, Zeku, due to uncertainties in the global economy and the smartphone industry.

Zeku, established by Oppo in 2019, has been responsible for developing products like the MariSilicon X chip, which features a neural processing unit (NPU) to enhance image quality for smartphone photography and videography.

A representative from the company explained that the decision to shut down Zeku was driven by the need for difficult adjustments in light of long-term development prospects.

This move comes as China's smartphone market, the world's largest, continues to struggle with a significant decline in demand. In 2022, smartphone shipments in China dropped by 14%, marking the first time in a decade that total unit shipments fell below 300 million.

In the first quarter of 2023, total smartphone shipments declined by 11% year-on-year, reaching 67.2 million units, the lowest quarterly total since 2013 according to Canalys.

Oppo, along with other Chinese smartphone rivals like Xiaomi, had previously established in-house chip design units to foster self-reliance in response to the United States' sanctions on Huawei's smartphone division.

Oppo, a subsidiary of BBK Electronics, which also owns Vivo, another prominent Chinese smartphone brand, is now faced with the challenge of navigating the volatile smartphone market while reevaluating its strategic focus on chip design.