One of the leading producers of graphics processing units (GPUs) worldwide, Advanced Micro Devices (AMD), denied rumours circulating on the internet that it is laying off hundreds of workers in Shanghai in a statement released on Thursday. Instead, AMD claimed that it has been “optimising and restructuring” its China business recently.
In a statement released in Chinese, AMD China stated, “The company has recently made a small optimisation and restructuring based on a corporate strategy adjustment,” clarifying that recent internet reports were not “real.” It did not provide specifics on the number of employees it plans to lose or its restructuring strategy.
In public declarations, Chinese enterprises frequently employ the phrase “optimisation” as a code word for layoffs. According to Chinese legislation, layoffs involving more than 20 workers, or more than 10% of the workforce overall, technically call for the involvement of labour authorities.
The announcement followed reports on Chinese social media that the US corporation was planning to fire several hundred employees from its Shanghai operations, mostly from its Radeon Technologies Group—the division in charge of AMD’s major GPU division.
An export restriction imposed by the United States in August prevents AMD and its biggest competitor, Nvidia Corp from selling their advanced products in China. Nvidia Corp owned all the GPUs used to train AI systems. This rule was modified to include Nvidia’s customised versions built for the Chinese market as part of updated export restrictions that were made public earlier this month by the US Commerce Department.
The country’s under-the-counter market for Nvidia and AMD goods is expanding as a result of the current regulations, and China’s Big Tech businesses are looking for cutting-edge AI processors to provide them the processing power they need to train their large language models (LLMs). Many generative AI applications, including chatbots like OpenAI’s ChatGPT, are powered by LLMs.
AMD has offices in at least eight locations across mainland China which are Beijing, Shanghai, Shenzhen, and Chengdu.
In 2022, AMD received US$5.2 billion in revenue from China, including Hong Kong, making about 22% of the company’s total sales to overseas clients.
However, AMD CEO Lisa Su feels that China has great potential. “We do believe there’s an opportunity to develop products for our customer set in China that is looking for AI solutions. Therefore, we’ll continue to work in that direction,” she said in a conference call with analysts. She emphasised that the company will be “fully compliant with US export controls.”
The US chipmaker is to follow in the footsteps of Qualcomm and Marvell Technology. They have lately decreased their staff in China due to the escalating US-China tech war and the global drop in consumer electronics demand.
According to an article published by China Business News, Qualcomm is one of the biggest US companies with an office in China has announced layoffs at its Shanghai headquarters without specifying how many.
About five months after starting job cutbacks to reduce staff, California-based semiconductor company Marvell Technologies said in March that it was terminating its entire research and development team in mainland China due to an industrial slowdown.
