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How Marvell is Shifting its R&D Strategy from China to Vietnam

Marvell Technology Group Ltd, a U.S.-based chip designer, has announced its plan to open a global research and development center in Ho Chi Minh City, Vietnam, as part of its strategy to realign its global R&D investments and focus on local customers and markets.

The move comes after Marvell eliminated some roles in China last year, citing risks due to the U.S.-China technology competition and the tough sanctions imposed by Washington on the Chinese chip sector. According to domestic China media outlet iJiwei, Marvell laid off a large proportion of its R&D team in China, which at one point had 1,000 people working in Shanghai.

Marvell is not the only U.S.-based chipmaker that has scaled back its R&D operations in China amid the geopolitical tensions. In January 2022, Micron Technology Inc shut down its DRAM R&D center in Shanghai, saying it was shifting its investment priorities.

Marvell specializes in chips for switches used inside data centers owned by cloud computing providers. The company’s decision to expand its presence in Vietnam reflects the growing importance of Southeast Asia as a potential hub for IC design and semiconductor industry.

Vietnam boasts favorable government policies, lower overall labor costs, and burgeoning local semiconductor actors such as Viettel, Vingroup, and FPT. The country also has enough IC designers to offer the industry stricken by labor shortage.

Other companies such as Qualcomm, Texas Instruments, and NXP have also started to set up local offices in Southeast Asia for better product promotion, technical support, and logistics control, as firms in South Korea and Japan are picking up the pace to move their supply chain into the same area.

Analysts are watching closely where the local and international semiconductor synergy will lead the area, as upstream IP block and EDA foundries set foot in the region. Most Taiwan-based semiconductor firms will likely still base themselves in Taiwan and China, with MediaTek being the most likely to expand to other areas.

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