(Yicai Global) Aug. 30 -- Vivo Communication Technology’s latest nX70 mobile phone series, due to be released next month, will feature its own image signal processing chip, the executive vice president of China’s most popular handset brand said.

The V1 is a custom imaging chip mainly used in camera-related tasks, Hu Baishan said on Aug. 27. It is Vivo’s first foray into the semiconductor field and took two years to develop. Dongguan-based Vivo mainly focuses on developing the imaging algorithms and outsources the chip design and manufacturing to others.

“Vivo may make other types of cell phone chips in the future, but these will still be products strongly related to consumer demand and algorithm conversion,” Hu told Yicai Global. It will also look at developing products that its chip partners have no time to make in the short term.

Semiconductors are becoming an area in which mobile phone manufacturers can get ahead of the pack in the face of fierce competition.

“Most Chinese cell phones are made by original equipment manufacturers,” an industry insider told Yicai Global. They present handset makers with a set of ready-made reference design solutions which the companies tweak slightly before placing their order.

But now, core technology has become a key battleground for cell phone makers as they vie for market share. If handset manufacturers strengthen their investment in core technologies such as chips, this will undoubtedly enhance the competitiveness of their products and help them gain “future room for growth,” the person said.

There will be an overall development budget for investment in the chip field, but it needs to be determined according to specific projects, Hu said. The budget will not include manufacturing, packaging and testing.

Vivo was the country’s best-selling mobile phone brand in the three months ended June 20 with 23.8 percent market share, according to US market researcher International Data Corp. Oppo Mobile Telecommunications came second with 21.7 percent and Xiaomi third with 17.2 percent.

It is also in the top five global cell phone makers, behind Samsung, Xiaomi, Apple and Oppo, with a 9 percent share, according to Singaporean market research firm Canalys.

Editors: Tang Shihua, Kim Taylor