US semiconductor firm Marvell lays off entire China research and development team in latest round of job cuts amid industry slowdown

·3 min read

US semiconductor company Marvell Technology is laying off its entire research and development team in mainland China, about five months after the firm initiated job cuts to scale down its operations in the world's largest chip market.

Santa Clara, California-based Marvell said it is eliminating about 320 jobs, or 4 per cent of its global workforce, in response to what the company described as an industry slowdown, according to a statement from the firm on Wednesday.

"We are streamlining our organisation to ensure that our workforce is positioned to take advantage of our most promising opportunities, both now and when we emerge from the current industry downcycle," Stacey Keegan, Marvell's vice-president of corporate marketing, said in the statement.

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While China remains a large and important market for Marvell, Keegan said the company has decided to "concentrate our China-based resources on customer-facing teams to best support our local customers and business opportunities". She added, however, that this move has "resulted in the elimination of certain R&D roles".

The logo of US semiconductor company Marvell Technology is seen at its headquarters in Santa Clara, California. Photo: Shutterstock alt=The logo of US semiconductor company Marvell Technology is seen at its headquarters in Santa Clara, California. Photo: Shutterstock>

Most of Marvell's latest job cuts will directly affect the firm's entire research and development operation in mainland China, while only about 5 per cent of these lay-offs will be conducted in the US, according to a report on Wednesday by Chinese semiconductor industry portal Ijiwei, which cited sources familiar with the matter.

Marvell is expected to immediately notify its affected Chinese employees and offer a severance package similar to that provided during the lay-offs last October, the Ijiwei report said.

Multiple departments at Marvell's offices in Shanghai and in Chengdu, capital of southwestern Sichuan province, were either downsized or entirely cut last October.

Before the lay-offs, Marvell had nearly 1,000 employees in China at its peak. About 800 of these workers were located in Shanghai, which had the company's third-largest research and development team behind its operations in the US and Israel.

Marvell's latest round of job cuts reflect the increased pressure on the world's major semiconductor companies owing to the large imbalance between supply and demand in the global market, where chip inventories have risen to record levels.

Arm China, the mainland joint venture of SoftBank Group Corp-owned Arm, last month laid off more than 100 people across three departments, following a tough 2022 that saw profits plummet by 96 per cent.

Meanwhile, US memory chip giant Micron Technology closed its DRAM design operations in Shanghai at the end of last year, with some 150 Chinese engineers asked to relocate to either the US or India amid rising tensions between Beijing and Washington.

Marvell, which designs advanced chips for cloud computing, automotive, 5G mobile communications and enterprise networking applications, earlier this month reported record revenue of US$5.92 billion for its financial year ended January 28, up 33 per cent from a year earlier, on the back of growth from those business segments. But it also posted a US$164 million net loss in its past financial year.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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