AMD says it is implementing ‘optimisation and restructuring’ at its China chip business but denies huge lay-off rumours
- AMD says it has recently made a small ‘optimisation and restructuring’ at its China business
- AMD has offices in at least eight cities in mainland China, including Beijing and Shanghai
Advanced Micro Devices (AMD), one of the world’s top maker of graphics processing units (GPUs), said it has been “optimising and restructuring” its China business recently but refuted online speculation that it is cutting hundreds of jobs in Shanghai, according to a statement on Thursday.
“Based on a corporate strategy adjustment, the company has recently made a small optimisation and restructuring,” AMD China said in a statement in Chinese, adding that recent online rumours were not “real”. It did not elaborate on its restructuring plan or how many staff will be cut.
“Optimisation” is a term often used by companies in China in official statements as an indirect way of referring to job cuts. Technically, lay-offs involving more than 20 employees – or more than 10 per cent of the total workforce – require intervention from labour authorities under Chinese law.
The statement came in the wake of Chinese social media posts that the US company would lay off a few hundred staff at its Shanghai offices, mainly at its Radeon Technologies Group, the unit responsible for AMD’s core GPU business.
Both AMD and its larger rival Nvidia Corp, which has a near monopoly on GPUs used to train AI systems, are prohibited from selling their advanced products in China under a US export ban imposed last August. That rule was updated earlier this month to include tailor-made versions designed by Nvidia for the Chinese market, as part of updated export rules released by the US Commerce Department.
US ban on tailor-made Nvidia and Intel chips hits Beijing’s AI ambitions
The existing rules have led to the rise of a booming under-the-counter market for Nvidia and AMD products in the country, with China’s Big Tech companies seeking advanced AI chips to provide the computing power needed to train their large language models (LLMs). LLMs underpin various generative AI applications, such as chatbots like OpenAI’s ChatGPT.
AMD has offices in at least eight cities in mainland China, including the country’s capital Beijing, financial hub Shanghai, southern tech hub Shenzhen as well as Chengdu, the capital of southwestern Sichuan province, according to its website.
China, including Hong Kong, contributed US$5.2 billion in revenue to AMD in 2022, accounting for 22 per cent of total sales to external customers.
Still, AMD CEO Lisa Su sees big opportunities in China. “We do believe there’s an opportunity to develop products for our customer set in China that is looking for AI solutions, and we’ll continue to work in that direction,” she said during a conference call with analysts in August, while highlighting that the firm will be “fully compliant with US export controls”.
The US chip maker is set to join peers such as Qualcomm and Marvell Technology in reducing its workforce in China in recent months amid an escalating US-China tech war and weak global demand for consumer electronics.
Qualcomm, which has one of the biggest footprints in China of any US company, said there will be lay-offs at its Shanghai office, without giving a figure, according to a report by Shanghai’s local newspaper China Business News last month.
California-based semiconductor firm Marvell Technology said in March it was laying off its entire research and development team in mainland China amid an industrial downturn, about five months after the firm initiated job cuts to scale down its operations in the country.
