Jiwei Network reported (text / Zhu Zhilei) After less than half a year, Marvell laid off employees again. In October last year, Marvell laid off most of the R&D members of its Shanghai and Chengdu branches in China, and Jiwei learned that this layoff will lay off all R&D teams in China, and the official notice will be issued this Wednesday.
A person close to Marvell told Jiwei that the layoff plan in China is the main part of Marvell's global layoffs. The company plans to lay off about 15% of its R&D personnel worldwide in the near future, about 1,000 people, of which the United States accounts for only about 5%, and most of the remaining layoffs are located in China, and the latest round of layoffs in China can be seen as a continuation of last October's layoffs.
What is the radical "de-China"?
At that time, Marvell explained the reason for the layoffs in China as "the company's global business and organizational restructuring", and the abolition of the SPG divisions of Chinese subsidiaries Mabwell Shanghai and Mabwell Chengdu; abolition of Mabvitadis Shanghai's PHY division; dismantling the Design Verification team of Mabvitad's ASIC division in Shanghai; Eliminate the Engineering team of Mabvitad's IT department in Shanghai, partially dissolve the Infrastructure team and retain some IT support staff; Layoff of Mabwell's Chengdu GREWS department and some staff of Mabwell's Shanghai GREWS department. The compensation plan is N+3, or there is a quick signature fee of 10,000 yuan. This compensation plan is not much different from the large-scale layoff compensation plan at the end of 2015, so it is likely that the layoffs in March this year will also be carried out in this plan.
At present, Marvell China has subsidiaries in Shanghai, Nanjing, Chengdu and Beijing, and this time the remaining R&D department of last year will be eliminated, and the remaining departments and personnel are expected to be eliminated after completing the contract closure of current customers. "It is equivalent to the final withdrawal of Marvell from the Chinese market."
Although many US semiconductor companies in China have been affected to varying degrees under US sanctions, and Micron, TI, Lam Research and other companies laid off employees last year, no company has been as aggressive as Marvell.
On the one hand, the above people analyzed that Marvell is different from other foreign companies in that it does have a research and development team involving high-end products in China, so it will be more affected by US sanctions. "The design service team is doing relatively high-end chips and is profitable, such as the design services of 5nm chips. Affected by the sanctions, this part of the external design service business was forced to terminate. Projects such as these involving advanced processes cannot be carried out, and management may think that it is becoming more and more difficult to carry out R&D work in China, and simply shrink overall. ”
On the other hand, in the view of an Marvell employee, the company's boss has been trying to show favor to the US government since taking office, and it is not ruled out that he has plans to make political capital in the future, and he does not want to have too many business dealings with China, so the tone of the company's development is to fully implement the US government's decoupling policy.
The Chinese market that gives Marvell a "headache"
In fact, the Chinese market has become a headache for Marvell.
Marvell's results announced in March this year showed that as of January 28 this year, its net revenue for fiscal 2023 reached a record $5.92 billion, an increase of 32.7% year-on-year; Net loss of $163.5 million was significantly narrower than the previous year's net loss of $421 million. The Chinese mainland accounted for 42% of revenue, and while Marvell emphasized that most of the chips sent to the region are related to sales to non-Chinese customers with factories or contract manufacturing operations in China, its importance is self-evident.
Faced with this important market, the company is concerned that many Chinese companies and entities have been added to the U.S. Entity List, imposing export restrictions on them, curbing demand for Marvell's chips and exacerbating an already challenging macroeconomic environment. Sales to some Chinese customers require export licenses, but authorities have rejected some of Marvell's applications and there is no guarantee that the U.S. government will approve future license applications.
Marvell is also concerned that customers in the region may see it as an "unreliable supplier" because of the inability to guarantee sales to Chinese customers, which may lead some Chinese customers to stock up on chips in large quantities in advance or change suppliers in the future. At the same time, the Chinese government has also published the "Unreliable Entity List Regulations", and inclusion in the list of unreliable suppliers will adversely affect its business and operations.
The above uncontrollable factors will create unpredictable risks to Marvell's Chinese market prospects.
In addition, with the completion of Marvell's acquisition of Inphi, it will be interesting to see whether its subsidiary in Nanjing, China, and another Cortina Network System Shenzhen subsidiary will also be affected by de-China in the future.
Where are Marvell's Chinese R&D personnel going?
Marvell's total number of employees in China was close to 1,000, and it had R&D centers in Shanghai, Nanjing, Chengdu and Beijing, of which the International R&D Center in Shanghai had more than 800 R&D personnel, making it the third largest R&D center outside Israel after the US headquarters. After many layoffs and job hopping, there are still a large number of senior R&D teams in Shanghai, Nanjing and other places.
According to a report by Jiwei in October last year, some core Chinese employees in the previous round of layoffs were notified in advance and given the opportunity to transfer to Singapore internally, and a considerable number of employees applied to go to the United States.
A person familiar with this matter told Jiwei that the leaders of the R&D team actually knew about this in advance, and some leaders were trying to contact some favorite companies, and the ideal expectation was that the other party would accept the entire team. "For example, some departments that acted in advance have already found a home, and some departments have not been very concerned about this matter before, and recently plan to take the initiative to contact VeriSilicon, ZTE Microelectronics, Jingluo and other companies, hoping to package the receiving team." The person said, "But since this year, the entire industry has basically been reducing costs and increasing efficiency, and Marvell's R & D team members are very senior, the number may be fifty or sixty people, the whole team to take over the cost is not small, domestic companies are likely to be unable to take over." ”
Jiwei Network learned that ASR and other companies have recently gone to the outside of Marvell's office to "rob people". But perhaps the most desirable thing for employees is for the whole team to go to the new company together. "Some employees have been targeted by multiple headhunters, but they are told to wait longer, they want to be with the original team."
According to relevant statistics, the chip industry is the industry with the highest salary increase in 2022, with an average increase of more than 50%. Among them, there are many cases where chip engineers have achieved several times their salaries through the "triple jump". However, in 2023, the market has taken a sharp turn, and more and more chip manufacturers have begun to cut wages, lay off employees, and stop issuing year-end bonuses. Although the semiconductor talent gap is still there, it is estimated that there are very few companies that can receive dozens of R&D teams in this package.
More importantly, if such a mature R&D team enters a new enterprise, there may be many challenges in project allocation, corporate culture, team integration and other aspects. "Employees who are familiar with the management style of foreign companies such as Marvell will have difficulty adapting to the style of private enterprises and state-owned enterprises. Either rolled to death, or dull and stiff, comfortable senior employees of foreign companies are likely to be unsatisfied. The person said, "There are matching products and technologies, a large enough volume, and a foreign company's management style or background, what can such a company count?" ”
Perhaps Marvell's Chinese R&D staff will end up "scattering into stars."
epilogue
After several mergers and acquisitions, Marvell has moved in the direction of the "soft market" of data networks; At the same time, this semiconductor company founded by Chinese is also accelerating to get rid of Chinese elements, which can't help but be embarrassing. (Proofreader/Zhang Yiqun)