OPPO may be the only hope for home-made self-developed mobile phone chips to rise again

Apple is a big technology company that takes all software and hardware. With its unique ability to independently develop operating systems and processor chips, it has become synonymous with global high-end mobile phone brands. Most of the profits of the entire smartphone market have gone to Apple. Samsung and Huawei also have strong brand appeal to consumers at present (or once) because of their core competitiveness such as self-developed mobile phone chips.

Although OPPO, Vivo and Xiaomi have not really developed their own mobile phone AP processor (application processor), let alone the more difficult mobile phone SoC processor (system single chip); However, the technology is actually progressing according to schedule. Oppo is almost certain to launch the first self-developed mobile phone AP processor in the second half of 2023. Whether OPPO can shake the pattern of Apple, MediaTek and Qualcomm in the future has attracted market attention.

From another point of view, there are advantages and disadvantages of self-developed mobile phone chips. Mobile phone manufacturers need to weigh the costs and risks themselves. However, with the continuous development and maturity of China's and the global smartphone market, self-developed mobile phone chips have in fact become one of the important means for Chinese smartphone brand manufacturers including OPPO, Vivo and Xiaomi to improve their market competitiveness and research and development level.

The success of Huawei and HiSilicon in the mobile phone AP processor (Kirin processor) has been the long-term development goal of other domestic mobile phone brands. Especially after Huawei lost the support of advanced manufacturing process OEM and was unable to continue to compete in the mobile phone market, the situation that other domestic brands tried hard to compete in the flagship mobile phone market is not available, which makes the mobile phone manufacturers think that if there is no way to make a technical breakthrough in the mobile phone AP processor field, It is really too difficult to create a clearer differentiation, but rely on the processors of third parties such as Qualcomm and MediaTek, and compete with Apple and Samsung. Therefore, it has become the goal of almost every mobile phone brand to build a self-developed mobile phone AP processor that can be comparable to the Hiskylin processor.

In addition to challenging the two flagship mobile phone brands – Qualcomm and MediaTek, the differentiation of self-developed chips is also to shake off other mobile phone brands. In fact, in recent years, with the trend of mobile phone application function update becoming more and more single and synchronized, OPPO, Vivo and Xiaomi have been difficult to make distinctive mobile phone varieties that are completely different from competitive products, and the AP processor platforms used are also very similar, so they can not be separated from Qualcomm and MediaTek. The competition between brands has become a mud war in terms of function, specification and price, which is not conducive to the establishment of brand value in essence.

Of course, in addition to sales and brand considerations, the adoption of self-developed AP processors is also beneficial in terms of technology and cost. In terms of technology, software and hardware integration and design flexibility will be greater, and it will be easier to create differentiated products. In terms of cost, when the purchase of AP processor is no longer subject to the cost of others, it can naturally expand the profit space of a single mobile phone variety. However, in order to achieve such cost-effectiveness, the technical level of AP processor design and compatibility with peripheral chips must also be improved to a certain level to truly reduce the cost of the entire system. Otherwise, the situation that the cost of a single chip decreases but the system cost increases may indeed occur.

Looking at all domestic mobile phone brand manufacturers, OPPO is at the forefront of development at this stage. According to the information circulated on the Internet, OPPO not only employed many former employees of Huawei Hisense, but also recruited senior generals such as Zhu Shangzu, the former co-operating director of MediaTek, and Li Zonglin, the general manager of the wireless communication business unit, as the commanders, to integrate various resources to establish Shanghai Zheku. OPPO officially launched the first NPU computing chip Mariana MariSilicon X in 2021, using TSMC's 6nm logic process technology, with AI algorithm and image signal processing as its main functions; It also launched Bluetooth audio SoC Mariana MariSilicon Y at the end of 2022, using TSMC 6nm RF process technology.

According to OPPO's technical development blueprint, the first self-developed mobile phone AP processor will be officially launched in the second half of 2023. Although the initial mass production scale should be small, and it is still uncertain whether to follow the originally set 6nm process technology or directly attack the 4nm process technology; However, the supply chain has revealed that OPPO's first self-developed AP processor chip has indeed entered the final stage. The official launch time depends on OPPO's marketing plan, and the production end is also ready.

According to OPPO's estimation, after the first mobile phone AP processor is launched in 2023, it is expected to launch a mobile phone SoC processor with higher technical difficulty in 2024, that is, the integration of self-developed AP and self-developed BP, which is expected to catch up with third-party chip design manufacturers such as Qualcomm and Mediatech in product technology. OPPO also recently announced that it had signed a global patent cross-licensing agreement with Huawei. After the cooperation on 5G and cellular network patents, the research and development of its mobile phone SoC will be greatly enhanced.

At present, there is no more clear message about how OPPO will import its own mobile phone AP processor. It is generally believed that the medium and high-end mobile phone varieties should be imported in a small amount, rather than the flagship mobile phone varieties. The actual strategy depends on the market situation of mobile phones from 2023 to 2024. If the self-developed AP processor can break through in the weak market, the follow-up development is quite worth looking forward to.

Vivo's current self-developed image processor chip (ISP) has developed from V1 and V1+to the latest V2 series. The main goal is to carry the existing mobile phone SoC platform, and enhance its own mobile phone shooting function (taking photos and videos) through the upgrading of image processing capabilities and AI assistance. According to the network information, Vivo still has a long way to go from the self-developed SoC processor of mobile phones. At present, Vivo hopes to continuously upgrade the self-developed image chip, make the resource investment more efficient, and do its best to create the differentiated performance of mobile phones.

Xiaomi's self-developed chips are generally not smooth. The mobile phone SoC Surging S1 was released in 2017 at the earliest, but it ended in nothing; It was not until 2021 that Xiaomi chip development department officially launched ISP chip surging C1; In the future, the fast charging chip surging P1 and power management chip surging G1 will be launched for the power semiconductor field. In terms of strategy, Xiaomi is clearly moving forward to peripheral chips first, achieving differentiation and cost control through the autonomy of peripheral chips.

In the face of the threat of mobile terminal brand customers and the desire to promote self-developed chips to improve their mastery of their own mobile phones, Qualcomm and MediaTek have expressed their respect for the trend that customers may become competitors, and will still fully support customers' various needs, and stressed that they would like to see more competitors join in promoting industrial progress. Looking at the development of Qualcomm and MediaTek in the past two or three years, it is still very difficult to surpass these two major manufacturers in the field of mobile phone SoC in the short term.

As for OPPO, which is closest to the launch of mobile phone SoC at present, it will wait until 2024 at the earliest. Technically, OPPO, as a novice in the mobile SoC field, still needs some time to run in and accumulate experience. In the consumer market, it also needs to formulate correct sales strategies and communicate brand value with consumers. How to position its own brand will be one of the biggest challenges for OPPO and the most powerful competitive barrier for Qualcomm and Mediatech.

In addition to OPPO, domestic mobile phone brand manufacturers still focus on the development of peripheral chips. Therefore, the cooperation between Qualcomm, Mediatech, Vivo and Xiaomi will be closer, and there is no obvious positive competitive relationship. At present, only Xiaomi's power management chip may erode Qualcomm's and Mediatech's chip sales business, and there is no direct negative impact on ISP and AI computing auxiliary chips.

On the whole, for Qualcomm and Mediatech, although OPPO is catching up rapidly, in the short term, unless OPPO can really develop and sell the market's amazing chip products for several years in a row, and significantly improve consumers' willingness to buy, Qualcomm and Mediatech can still maintain a leading position in the market.

For domestic mobile phone manufacturers, the self-developed chip is certainly worthy of recognition, but it is bound to face the obstacles of promotion – market positioning. Taking the current competitive situation of Qualcomm and Mediatech as an example, both factories have very clear positioning. It is difficult to break through, and it takes time to communicate with consumers. For example, although the SoC series products of the flagship mobile phone of MediaTek did not perform poorly in all aspects of the evaluation, and even surpassed Qualcomm's new products in 2021-2022, Qualcomm still has an absolute advantage in the actual introduction and adoption of the flagship mobile phone, which is the gap brought by the brand effect.

Therefore, what market positioning will OPPO's self-developed mobile phone SoC target in the future? How to combine with your own mobile phone products to promote brand effect? Although most Chinese consumers are willing to give full support to the domestic mobile phone SoC now, it is not enough to rely on the support of the Chinese market alone. How to take root in the domestic market and show attractiveness to global consumers will test the subsequent strategy formulation of OPPO.

If Vivo and Xiaomi continue to develop into peripheral chips, the obstacles to promotion are not too big, because they are not directly competing with Qualcomm and Mediatech, and both ISP and PMIC manufacturers generally do not focus on mobile applications excessively. It is really unnecessary to consider such complex issues as OPPO. However, there must be a ceiling on the effect of using peripheral chips to promote product differentiation, and there is no longer a long-term brand upgrading effect. This may be the bottleneck that Vivo and Xiaomi will encounter in the future.

Conclusion: In fact, for most consumers today, mobile phones, tablets and notebooks priced at 2000 or 3000 yuan on the market are not only beautiful in appearance design and excellent in product quality, but also can meet the application needs very well and give consumers a very good experience. Whether mobile terminal devices such as mobile phones and tablets need to carry chips manufactured by 3nm, 2nm or even 1.4nm technology is debatable.

Some people gave a more reasonable speculation on Apple's products. Even if Apple began to use 3nm technology to manufacture chips in 2023, it would probably take 4 years to use; It has been used until around 2026. If the chips made by 2nm technology are used again, the service time may be longer. Moore's law is close to the physical limit and is expected to continue around 2030. However, the manufacturing of advanced technology chips driven by mobile devices such as smart phones and tablets will probably stop at the 2nm node.

Therefore, as a latecomer, OPPO, with its own position in the mobile phone market, firmly chose to develop its own AP and even SoC chips, and the difficulty behind it can be imagined. Hopefully, it is not too late for OPPO.

(I organize and publish for the science and technology craze)

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