On May 12, OPPO suddenly announced that its chip design company Zheku was closed, and all personnel were laid off, and the sudden shock of the matter shocked everyone, even as fast as an official notice in the morning, and even the official website was closed in the afternoon.
According to the reporter's interview, even on the night of May 11, there were many employees working overtime, not knowing about the dissolution of the company, and suddenly received a system notice from the company's chat software at night: "Due to a major upgrade of the IT system, the office will be closed for 24 hours from 0:00 to 24:00 on 5/12/2023." ”
Many employees were surprised, and the next morning they received a notice to hold an all-hands meeting at 11 o'clock, at which they were notified that the company was dissolved and all employees were laid off, according to the statement of the CEO of Zheku, "There are many directors here, and they have just received this news." ”
Speech by Liu Jun, CEO of Zheku, explained the reasons at the plenary meeting:
"The global economy and mobile phone industry are now extremely unoptimistic, and the company's entire revenue is far from meeting expectations, so under such circumstances, such a huge investment in chips will be unaffordable for the company, so I regret to make a reading here: After careful discussion, the company decided to shut down the Zheku and terminate the chip self-research business."
According to IDC data, OPPO's mobile phone shipments in 2021 were 133.6 million units, and mobile phone sales in 2022 were 103.3 million units, with shipments falling by 22.7%, and its global share also fell from 9.8% in 2021 to 8.6%.
In Q1 2023, the global smartphone market continues to be in a sluggish state, according to Counterpoint data, global smartphone sales in the first quarter fell 14% year-on-year, and according to Canalys data, Q1 2023 global smartphone shipments fell 12% year-on-year, different institutions although the data is different, but all show that in the case of the global smartphone market recession in 2022, the first quarter of this year is still continuing to decline year-on-year.
According to OPPO HR's video speech at the plenary meeting on May 12, the overall compensation plan is relatively decent, reaching or even exceeding the level of many foreign companies, and I hope that Chinese companies are decent in this regard.
1: The N+3 compensation given exceeds the N+1 provision;
2: The basis of compensation N is the total including the annual bonus and other income divided by 12, not simply based on the monthly salary;
3: N+3 compensation is not subject to triple limit. This triple is the national law stipulates that the enterprise compensates N+1, and the law only supports the local average wage level within three times, and the enterprise can not pay more than three times.
"The compensation standard given by the company to all regular employees is N+3. This base for N+3 calculation will be the sum of all employees' monthly salary, bonuses, and other payables for the year, minus 12. Then the standard of compensation this time does not have the upper limit of three times the upper limit of each region, so the calculation amount will be all the past annual salary, bonus, and other amounts after adding up and dividing by 12"
2: Although the company was dissolved on May 12, all salaries were settled until May 31
3: Pay all to the social security provident fund in May.
"Dear colleagues, once signed, the company will complete the payment of this compensation within five working days. The last working day of all employees is today May 12th, then our salary in May this month will be settled uniformly until May 31st, and we will also help all colleagues pay the social security provident fund in May. ”
Domestic enterprises should say that in this regard, the overall still needs to be greatly strengthened, to the developed countries, in fact, the whole society gradually towards the legalization, humanization of the process, to do one thing with the developed countries or even better, into the developed countries will be natural.
The termination of the Zheku business this time, many people suspect that it has something to do with possible US sanctions, to be honest, I also doubt it, but there is no evidence, but this suspicion is very reasonable. Because this is indeed the case, even if Zheku insists on investing in the final mass production of the legendary 4nm mobile phone processor, when the time comes, the United States will order OPPO to impose sanctions like Huawei, which will make OPPO unable to cope, after all, it is not supported by the communication equipment business of the old bank like Huawei.
Huawei's communication equipment I said in a previous article, the unit price is high and the shipment volume is not large, Huawei sends hundreds of thousands of 4G/5G base stations to global operators a year, plus wired networks, software revenue, operation and maintenance services can obtain almost 300 billion yuan of operating income.
So if OPPO can continue to stick to it, it is naturally a good thing, but the sword of Damocles in the United States may indeed fall at any time.
Speaking of which, I don't know why I think of Japan thirty years ago
The situation that Japan faced back then was that the upgrading of high-end industries was held down by the hegemonic powers, setting a ceiling for you, and to what extent you can develop depends on the ideas of the hegemonic countries, and if you are in a good mood, you will raise the ceiling a little, and if you feel bad, you will use the ceiling to limit you.
Japan is the only major developed country with a GDP per capita that is not comparable to that of 30 years ago, and during the same period, the United States, Britain, France, Germany, Italy, Spain and other countries have increased to varying degrees.
Once a country's advanced industry does not develop, it will not only bring various new problems, but also the original problems will not be solved or even worsened.
China's decision-makers have made a famous judgment very early, that is, "development is the key to solving all problems", that is to say, a country will continue to face a variety of internal problems, and many of these internal problems will be very serious, but as long as industrial upgrading is constantly underway, per capita labor productivity is constantly improving, and the cake is getting bigger and bigger, then these problems are possible to solve, and many times they will be solved.
However, if the upper limit of industrial upgrading is limited and the cake cannot continue to grow, then various internal problems will often become unsolvable, and will become more and more serious, and eventually break out centrally.
Let's take our own family as an example, maybe we face various problems such as high mortgages, large investment in children's education, and family members getting sick, but if the company they work for is still developing, and the salary and bonus income is rising, then these problems may eventually be solved, but if the company suddenly closes at this time, and cannot find a new job as a source of income, then various family problems will accumulate and erupt intensively, and finally cause family bankruptcy.
Not only the Plaza Accord of 1985, but Japan's advanced industries, from color TVs, automobiles to semiconductors, faced waves of external attacks from the United States.
Under the pressure of the Japan-US automobile trade war, the United States forced Japan to impose its own automobile export restrictions on the United States by threatening to pass the automobile quota bill, and on May 1, 1981, Japan issued the "Main Content of the Measures for Exporting Cars to the United States" in the form of a statement by the Minister of International Trade and Industry, limiting the number of cars exported by Japan to the United States from April 1981 to March 1984.
The number of vehicles exported by Japan to the United States from April 1981 to March 1982 in the first year was limited to 1.68 million units, and the number in the second year could be added to the increase in the U.S. market by 16.5% on the basis of the previous year.
Later, Japan also allocated quotas for exports from each Japanese automobile company, taking the quota exported to the United States from April 1983 to March 1984 as an example, Toyota quota was 516,659 units, Nissan 456,030 units, Honda 348,631 units, Toyo Kogyo 159,282 units, Mitsubishi 112,584 units, Fuji Heavy Industries 70,014 units, Isuzu 16,800 units, a total of 1,680,000 units.
After three years in 1984, it was postponed and the export limit for Japanese cars to the United States rose to 1.85 million units.
Restrictions on imports have led to higher prices in the U.S. auto market, and the economic boom has rebounded, so that the profitability of the three major U.S. auto companies, which were originally facing the impact of Japanese automobiles, has also improved, turning from losses to profits.
The semiconductor industry signed the Japan-US semiconductor agreement with the United States twice in 1986 and 1991, which not only stipulates the share of foreign semiconductor products in the Japanese market, but even stipulates that the price of Japanese semiconductor exports to the US market cannot be lower than a certain amount, otherwise it is considered dumping.
To be honest, this is a very hegemonic clause, like the Japan-US Semiconductor Agreement signed by the United States and Japan in 1986, Japan is not only required to stipulate that the price of exporting US semiconductors cannot be lower than a certain amount, but also required to open its own semiconductor market, and ensure that foreign companies will gain 20% market share in Japan within 5 years.
This is equivalent to China signing a car agreement with the United States today, requiring that China's electric vehicles exported to the United States must be higher than a certain price, and stipulating that American brands such as Tesla cannot have a 20% share of the Chinese market.
In 1986, Japan's exports declined, and the growth rate of foreign trade exports fell from 2.4% in 1985 to -4.8% in 1986.
It is precisely because of the external ceiling set by the United States, through a series of suppression, Japan has to face a more difficult external environment, and Japan itself has made various mistakes in monetary policy and semiconductor development direction when dealing with complex environments (Plaza Agreement, semiconductor industry), which eventually caused a lost thirty years.
There is a view that Japan's lost thirty years was self-inflicted, such as Germany, which also signed the Plaza Accord to make the currency appreciate, but in the end it passed safely without causing economic stagnation.
In addition, like Japan in the face of the United States in the field of automobile suppression, although the signing of the Japan-US automobile agreement was suppressed, the content of the agreement is not fair to Japan, but in the end did not stop the pace of the development of the Japanese auto industry, the picture below is the best brand sold in the United States in 2021, Toyota ranked first with 2.0278 million units, surpassing Ford and Chevrolet, while Honda and Nissan ranked fourth and fifth. The performance is still good.
But my point is that Japan does have a chance to do things right, but the U.S. strategy is to limit through sustained external repression, and you will eventually make mistakes, which will lead to slowing or even stagnating industrial upgrading.
Although the Japanese auto industry is still performing well under the pressure of the United States, is it possible that if there were no quantitative restrictions in those years, Japanese cars would probably have completely destroyed the local car companies in the United States?
Now the smart phone, laptop brand market is like this, brands from Chinese mainland, the United States, South Korea have basically eliminated European and Japanese electronic brands.
If Europe also has the same power as the United States, directly restricting the sales of Apple, Samsung, Huawei and others in Europe through various agreements to protect Europe's local mobile phone brands, the situation may be different.
Similarly, today's electric car boom is not very beneficial to Europe, if they have the power to directly sign an unequal agreement to restrict Tesla, and Chinese electric car sales in Europe, and in turn through the agreement stipulates that European car brands in the Chinese mainland, the share of the US market must reach a certain value they want, which will also benefit European car companies.
Compared with Japan's automobile industry, Japan's semiconductor industry is blocked in the internal and external markets (through price limit share) and its own development strategy problems under the double blow, by the United States is obviously overtaken, in 1988 Japan's semiconductor share accounted for 50.3% of the world, by 2019 only 10.0%.
The following figure shows the conference materials "Semiconductor Strategy (Overview)" released by the Ministry of Economy, Trade and Industry in June 2021
We can say that even if Japan had taken every step of the way in dealing with external repression such as the Plaza Accord and the Japan-US semiconductor agreement thirty years ago, it would have ushered in more repressive policies by the United States, until Japan faced strong and complex external pressures with its own mistakes and its development stagnated.
What is very fatal for Japan is that because politics, economy, and military are firmly controlled and influenced by the United States, and the market and technology are also highly dependent on the United States, Japan actually has limited space to say no to the United States. This shows the importance of the United States holding power in the face of Japan, which can force you to sign all kinds of unfavorable agreements and continue to cause you problems, and you will eventually make mistakes in dealing with these problems.
This is like a company leader if he wants to complete a subordinate, then he constantly arranges all kinds of unreasonable work, and does not provide various peripheral resources, then no matter how good the subordinate's ability is, there will always be times when the task cannot be completed and mistakes are made.
This also shows the value of New China from the founding of the People's Republic of China to take the road of independent development, after all, only independent countries can finally break the ceiling, it is difficult for the United States to sign unequal treaties with the mainland to suppress the development of the mainland's high-tech industry, and militarily dare not act rashly because there is no certainty of victory, so it can only be suppressed through market and technological advantages in such fields as trade wars and economic wars.
However, in the field of market, the United States does not have an absolute advantage, because China's local market is also large enough, and in terms of supply chain and manufacturing, China even has a larger and more comprehensive manufacturing industry, and the United States can only use some key technologies such as semiconductors to combat sanctions.
Therefore, breakthroughs in key technologies are now the most critical for us.
Speaking of which, back to Zheku.
To be honest, if OPPO shuts down Zheku because of possible US sanctions, I am more psychologically acceptable. But if it is true that the business is closed as a whole simply because of financial problems, it shows that among the many consumer electronics brands in the mainland, there are really not many companies that have the determination, patience and ability to break through the core technology.
Xiaomi once tried to develop its own chip, but later proved that the ability was indeed insufficient and gave up;
OPPO's Zheku was originally pinned on hope, but now he voluntarily withdrew;
At present, VIVO only has self-developed small chips, and has no plans to develop its own mobile phone processor.
As for Lenovo, not to mention, Lenovo now has Motorola mobile phones sold overseas, but it is impossible to develop its own processor.
Glory is now mainly sold in China, with limited sales in overseas markets and a relatively small volume.
According to Omdia data, Honor's global sales of 59 million units in 2022 are one level with OPPO's derivative brand Realme of 53 million units, far less than the global sales of Xiaomi (152 million units), OPPO (107 million units) and VIVO (98 million units), the volume is not enough to support self-developed mobile phone processors, and as an independent company of Huawei, it is itself targeted by the United States.
The only Unigroup Zhanrui in China that specializes in mobile phone processors, the current overall ability is average, not as good as MediaTek.
Huawei has been sanctioned for four years, it seems that the only one in China that can comprehensively overturn Qualcomm, MediaTek, is still Huawei's HiSilicon.
It seems that in the end, it will have to return to Hais.