U.S. computer chip giant Micron Technology plans to shut down its DRAM design team in Shanghai by the end of this year, the company confirmed to Caixin.
The move comes after many members of Micron's DRAM engineering team were poached by domestic competitors. It will serve as a precautionary measure to prevent technology leaks to competitors, several chip industry participants told Caixin.
Micron is not the first U.S. chip company to scale back its research and development teams in China. U.S. chip designer Advanced Micro Devices Inc. has also said it plans to downsize its Shanghai research center, prompting some employees to leave the company.
The exodus is being accelerated by a wave of investment in the domestic chip industry under Beijing's Made in China 2025 plan, which aims to upgrade China's manufacturing to be more globally competitive, especially in high value-added sectors like microchips. Many U.S. companies haven't signed noncompete agreements with Chinese employees, making it easy for Chinese competitors to poach talent, industry participants say.
In 2021, China had 2,810 domestic chip design companies, up 26.7% from the previous year. Some domestic chip companies offer fresh graduates with master's degrees an annual salary of more than 400,000 yuan ($63,280).
Other employees in Micron's Shanghai office won't be affected by the restructuring of the DRAM team, the company said. A chip industry investor told Caixin that he expects that some employees who want to stay in the stable environment of a foreign company are likely to move to the U.S., but more employees are likely to join domestic companies.
Even before the restructuring, Micron was downsizing its NAND chip design team in China and moved its Asian NAND research and production center to Singapore, the chip industry participants told Caixin.
Founded in 1978, Micron is one of the world's biggest memory chipmakers. It accounted for 22.9% of the global DRAM chip industry in the third quarter of 2021, behind Samsung and SK Hynix, according to market researcher TrendForce. No Chinese companies are among the top six DRAM chipmakers.
Micron's Shanghai research center covers almost all of its products. The company also has a factory in Xi'an, responsible for chip assembly and testing.
The company said its future investment priorities are in the U.S. In October, Micron said it planned to invest more than $150 billion over the next decade in chip research and production. The company is also urging the U.S. Congress to pass legislation that would aid domestic plant expansions.
Micron has been caught in disputes with Chinese competitors. In 2017, Micron sued Chinese state-backed chipmaker Fujian Jinhua Integrated Circuit Co. Ltd. in the U.S. for stealing trade secrets. Jinhua later countersued Micron in China, and a court in the southern Chinese city of Fuzhou sided with the Chinese company and blocked the sale of some of Micron's chips in China.
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Caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Nikkei has an agreement with the company to exchange articles in English.