Recently, TP-Link Systems, the main export entity of the Chinese router manufacturer TP-Link, was reported to have carried out a sudden large-scale layoff of its Wi-Fi chip R&D team at the Zhangjiang High-Tech Park in Shanghai. This layoff affected several core positions including algorithms, design, verification, with only a few key personnel retained. The downsizing is seen as a signal of the company’s phased withdrawal from high-investment chip R&D lines, closely related to the continuous upgrading of US technology and chip export controls in recent years.
According to disclosures from several workplace social media platform users, TP-Link Systems recently held an all-hands meeting internally to announce a “significant structural adjustment” to its Wi-Fi chip department, with most employees expected to be dismissed within a few hours. Employees revealed that the company is offering a compensation package of “N+3,” higher than the industry norm of “N+1,” but the rapid pace of the layoffs has left many shocked.
Screenshots circulating online show employees of the company sharing information about the layoffs and compensation methods within chat groups. Reports from Sina Technology and Observer Net on June 17th also confirmed that TP-Link’s Wi-Fi chip team at the Zhangjiang site in Shanghai has experienced a large-scale downsizing this week. The company’s management explicitly stated during the all-hands meeting that only a few R&D members would be retained, while personnel in various positions such as algorithms, verification, and design would all be dissolved.
This round of layoffs primarily targeted the in-house Wi-Fi chip team established since 2021. The team was originally intended to support TP-Link’s technical upgrades in the smart home sector, developing core chip modules for the Wi-Fi 6 and Wi-Fi 7 standards. However, as of now, the team has yet to produce commercially viable products, with TP-Link’s router mainstay still relying on MediaTek chip solutions. It is widely believed in the industry that the team’s input did not correspond to the results achieved, a significant factor leading to its downsizing.
However, the deeper-rooted dilemma may stem from external technological limitations. Chinese independent analyst Ma Yugui pointed out that “TP-Link’s difficulty in achieving fully self-developed Wi-Fi chips is due to restricted team resources on one hand, and constraints on critical components imposed by US export controls, including EDA software, testing equipment, and packaging technology on the other.”
He mentioned that the US technology embargo has extended beyond high-end enterprises long ago, posing systemic challenges to medium-sized equipment manufacturers like TP-Link.
Since 2022, the US Department of Commerce has been intensifying its technical restrictions on Chinese technology companies, expanding limitations from high-performance chips to the entire semiconductor design and manufacturing processes. Export permits for high-end EDA software, high-frequency testing platforms, and advanced packaging lines have become increasingly scarce, leading many Chinese companies in the industry to face bottlenecks.
Multiple industry insiders have stated that TP-Link’s current layoffs do not indicate a complete abandonment of its chip business, but rather a phased contraction of high-cost and high technical barrier research projects like Wi-Fi Front End Modules (FEM), shifting towards reliance on external mature solutions to mitigate risks and optimize resources.
Meanwhile, TP-Link’s overseas market layout in recent years has also drawn significant attention. Since 2024, the company has separated its Chinese and US businesses into two legal entities, with TP-Link Systems Inc. independently operating its US business, controlled by Zhao Jianjun. Zhao Jianjun emphasized publicly that he has “completely removed management and financial ties with China” and relocated core executives to the United States. However, the US Department of Commerce has initiated an investigation, examining whether the company’s rapid expansion in the US market poses a potential threat to national security.
According to Bloomberg, TP-Link’s market share in the US home router market had once soared to 60%, far exceeding the 10% in 2019, making it one of the few successful Chinese tech brands in the US market. Yet, success has brought greater political and legal pressures. In addition to technological barriers, the company is facing patent lawsuits from local US manufacturers and questioning regarding market access transparency.
Shanghai technology commentator Gao Qiang stated, “TP-Link is currently at the forefront of the global technological rule reconstruction. Chinese companies still heavily rely on overseas supply chains in critical areas such as communication protocols and chip architectures, leading to ongoing external constraints on their research decisions and product strategies.” He pointed out that even with self-developed chips, reliance on international licensing tool chains and foundry systems is necessary, as independence does not equal isolation.
Furthermore, amid the ongoing decoupling of Chinese and American technology and the reconfiguration of global supply chains, TP-Link’s recent layoffs are clearly not an isolated incident. Gao Qiang remarked, “As technological sovereignty becomes a strategic issue, every tech company must find a new balance between external dependencies, R&D capabilities, and market policies.” He added that TP-Link’s ability to maintain competitiveness amidst the global tech upheaval will become a crucial case in assessing Chinese companies’ adaptability.