Chinese brands step up R&D in bid for competitive edge in global market

Chinese smartphone manufacturers are in hot pursuit of chip design capabilities as well as research and development heft as competition intensifies in the global market.

Most of them still see such capabilities as key to increasing their competitiveness, and hence are intent to grow them even against odds, despite Oppo's decision earlier this year to shutter its chip design department, experts said.

For instance, Vivo unveiled its upgraded, self-designed V3 imaging chip, which adopts a 6 nanometer process, in late July, after topping a declining Chinese smartphone market in the second quarter of this year.

Yu Meng, vice-president of imaging at Vivo, said during the chip launch: "At Vivo, we are committed to advancing 'human-centric professional imaging'. To this end, we have continuously enhanced our expertise across optics, computing and algorithm foundations to build imaging capabilities comparable to professional photography equipment."

Vivo's chip features a newly designed multi-concurrent AI-ISP architecture and second-generation Frame Info Tunneling or FIT technology. Vivo said FIT delivers a better user experience by enabling 4K cinema-like bokeh. Bokeh refers to the aesthetic or soft quality of the blur in image areas outside the lens' focus.

The chip also helps deliver automatic subject focus detection and switching, cinema-like skin optimization and cinematic color processing. Vivo thus became the first Android phonemaker to enable 4K cinema-quality portrait video with post-processing functions.

Canalys, a market research provider, said Vivo topped smartphone brands in China in terms of second-quarter shipments with a market share of 18 percent. Some 64.3 million smartphones were shipped by various brands in China in the quarter, down 5 percent year-on-year.

Besides Vivo, Honor and Xiaomi are doubling down on chip design. Xiaomi's investment unit has invested in about 110 semiconductor- and electronics-related enterprises, including optoelectronic chips, automotive chips, semiconductor manufacturing equipment and other fields, according to data compiled by Chinese media outlet Chinastarmarket.cn. Xiaomi has also unveiled multiple self-designed chips in the past six years.

Honor also registered a chip design company in May, with a registered capital of 100 million yuan ($13.9 million).

Fu Liang, an independent telecom analyst, said smartphone makers are eyeing in-house processors as a means of differentiating their products, and many see the imaging chip as a good starting point in that direction.

Although chip firms are known to be capital- and technology-intensive, Chinese mobile phone firms may scale up their investments in the future, Fu said.

The global smartphone market has been in a downtrend for dozens of quarters now. So, not all phone companies can afford to foray into chips. In May, Oppo said it has stopped developing its own chips, and attributed its decision to uncertainties in both the global economy and the smartphone industry. By then, Oppo was believed to have invested substantial capital, time and efforts in chip R&D activities.

Wei Jianguo, former vice-minister of commerce and vice-chairman of the China Center for International Economic Exchanges, said: "The chip industry is known for being highly intensive in capital, talent and technology. These three factors are all needed to ensure its healthy development. We have to beef up our indigenous R&D push."