Chip designer Marvell Technology Group is eliminating jobs in China as part of a realignment of its global research and development investments.
“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 told 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.”
Santa Clara, California-based Marvell Technology, a leader in infrastructure semiconductor solutions, did not specify how many staffers would be affected by the cuts.
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.
Marvell Technology reported revenue of $1.517 billion and net income of $4 million for the second quarter of fiscal year 2023. Marvell is expecting revenue of $1.56 billion with gross margin of 51.1 percent in the second quarter of fiscal year 2023.
The company’s move comes as chipmakers brace for slowing demand following a boom at the peak of a global chip shortage.
Samsung Electronics reported a 31 percent drop in profit due to weak demand, and forecast it would stay low until early 2023.
Marvell’s move comes after the United States 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 their R&D operations in China.
In January, U.S.-based chipmaker Micron Technology shut down its DRAM R&D center in Shanghai citing shifting investment priorities.