Is Oppo looking to manufacture its own chips for flagship smartphones?

A new report says Oppo may make custom chips for future flagships

With Google, Samsung, Huawei and Xiaomi all developing in-house chips, it looks like Oppo will be the latest device maker to jump off the Qualcomm and MediaTek bandwagon.

According to a report by Nikkei Asia, Oppo is looking to utilize the 3-nanometer chip production facilities at Taiwan Semiconductor Manufacturing Co. (TSMC) for custom chips.

Sources close to the publication told Nikkei that depending on the speed of development, we could be seeing custom Oppo chips in their flagships as early as 2023 or 2024. They also said that in-house chips would help control the supply chain.

Oppo has been ramping up efforts in custom silicon over the last few years. It has already hired top chip engineers and AI experts from MediaTek, Qualcomm and Huawei. It is also continuing its hiring spree in US, Taiwan and Japan.

Nikkei also notes that Oppo may also be working on custom image signal processors.

Lead Analyst Eric Tseng told the publication that developing custom chips comes with its own set of challenges and they may end up performing worse than the ones from established brands like Qualcomm.

"That's why we don't see a lot of players boldly using their own mobile processors," said Tseng. "and why most of them started from developing image signal processing chips first."

"If everyone is using Qualcomm's chipsets for flagship phones, then it's very hard to claim that you have unique performance and products," said Brady Wang, an analyst with Counterpoint.

"Meanwhile, you have to compete for allocations of chips and resources with your competitors during a time of shortage, and do not have direct visibility of your chip supply chain," Wang added.