By Josh Horwitz
SHANGHAI (Reuters) – Santa Clara, California-based chip designer Marvell Technology Group Ltd is eliminating some roles in China as part of a realignment of its global research and development investments, the company said on Thursday.
“In China, we will focus our R&D investments on local customers and the China market,” Stacey Keegan, vice president of Corporate Marketing at Marvell said in a written response to questions sent from Reuters.
“As a part of this realignment, several of our business units and functions are announcing changes to their global location strategy that will result in the elimination of roles in China.”
Marvell did not specify how many staffers would be affected by the cuts.
Domestic China media outlet iJiwei reported late on Wednesday, citing unnamed industry sources, that Marvell planned to lay off a large proportion of its research and development team in China.
Marvell at one point had 1,000 people working in China, about 800 of which were located at its research and development center in Shanghai, according to iJiwei, an online news site tracking the semiconductor sector.
Marvell specializes in chips for switches used inside data centers owned by cloud computing providers.
The company’s move comes as chipmakers brace for slowing demand following a boom at the peak of a global chip shortage.
Samsung Electronics Co Ltd on Thursday reported a 31% drop in profit due to weak demand, and forecast it would stay low until early 2023.
Chip stocks broadly took a hit earlier this month when Samsung and Advanced Micro Devices Inc announced dour forecasts for the quarter.
Marvell’s move also comes after Washington enacted tough sanctions on the Chinese chip sector, which effectively bar U.S.-based equipment makers from servicing Chinese manufacturers of advanced chips.
Amid the geopolitical tensions, a number of U.S.-based companies have scaled back ther R&D operations in China.
In January, fellow U.S.-based chipmaker Micron Technology Inc shut down its its DRAM R&D center in Shanghai citing shifting investment priorities.
(Reporting by Josh Horwitz; Editing by Tomasz Janowski)
