Recently, news broke that the chip division of TP-Link, a Chinese networking equipment giant, has laid off all employees and suspended its self-developed business. Almost simultaneously, “Xirenhorse,” a high-end sensor enterprise once valued at a staggering 3.6 billion yuan, was declared bankrupt by the court. Multiple sources have confirmed these two incidents, raising concerns about the current state of China’s chip industry.
According to reports from multiple tech media outlets such as IT Home, DoNews, and MyDrivers, TP-Link’s chip division was completely dissolved in mid-September, affecting core positions like algorithms, design, and testing.
It was noted that several affected employees confirmed the wide-ranging layoffs on social media platforms. An insider revealed that the company acted swiftly, with the entire process from notification to completing departure procedures taking less than half a day. The compensation plan is based on “N+3,” where “N” is calculated based on the average social wage. Employees with a year of service receive an additional 3 months’ compensation, those with six months to a year receive 2 months, and those with less than six months receive 1 month.
Analysts point out that three years ago, TP-Link boldly initiated a self-developed chip program with the aim of reducing reliance on suppliers like Qualcomm and MediaTek. However, at the critical juncture of Wi-Fi 7 technology upgrade, the project failed to commercialize, leading to an imbalance between investment and returns, ultimately forcing a halt.
Mr. Zhao, who has worked in the semiconductor industry in Hebei for many years, expressed that despite receiving subsidies, the Chinese chip industry still faces challenges under Western technology restrictions. He stated, “Apart from strategic companies like Huawei and SMIC, other enterprises, even if they receive funds, find it difficult to survive. The government’s finances are tight and cannot endlessly pour money as before.”
He added that for a company primarily focused on network equipment, self-developed chips are inherently risky investments. If mass production fails, subsequent investments become a heavy burden.
Research revealed that TP-Link’s chip team was established in 2021 and had completed the tape-out of two chips but was halted before entering mass production. In June of this year, TP-Link’s export entity, “Lianzhou International,” had previously downsized its Wi-Fi chip department in Shanghai’s Zhangjiang area, affecting Wi-Fi Front-End Module (FEM) research direction. The recent layoffs in September were more extensive, impacting nearly the entire department. TP-Link has yet to issue a public response on this matter.
Meanwhile, a search on the China Corporate Bankruptcy and Reorganization Information Network revealed that on September 9, the Intermediate People’s Court of Quanzhou, Fujian Province announced the bankruptcy liquidation of Xirenhorse Joint Measurement and Control (Quanzhou) Technology Co., Ltd on the court acceptance date of September 1. The announcement indicated that creditors must declare their claims by November 10, with the first creditors’ meeting scheduled for November 25.
Industry experts analyzed that the issue with “Xirenhorse” lies not in the technology itself but in excessive reliance on capital and policy support while neglecting market expansion and sustainable commercialization capabilities. “Without subsidies, such enterprises find it difficult to survive.”
Mr. Lu, who previously worked at Alibaba, pointed out that the Chinese chip industry relies too heavily on capital speculation. He stated, “Many companies are keen on discussing concepts to attract investments, but lack long-term technical accumulation and solid governance. When capital flow retreats, problems immediately surface, and many companies simply cannot sustain themselves.”
Publicly available information indicates that “Xirenhorse” was established in 2017, focusing on MEMS sensor chip design, manufacturing, and testing, employing the IDM (Integrated Device Manufacturing) mode. Founder Dr. Nie Yongzhong holds over a hundred patents. In 2021, the company was selected as one of the “Top 10 Chinese Semiconductor MEMS Enterprises,” with a valuation once exceeding 3.6 billion yuan, seen as a beacon of domestic substitution hopes. However, starting from 2023, the company became embroiled in patent disputes and shareholder conflicts, failed to commence production at its core manufacturing base on time, worsened its financial chain, and eventually went bankrupt.
Public opinion widely acknowledges that whether it’s the dismantling of TP-Link’s chip division or the bankruptcy liquidation of “Xirenhorse,” it highlights the pressure on China’s chip industry in terms of core technology, independent research, and market transformation. The former’s situation demonstrates that even leading global companies in market share struggle to break through in high-end chip sectors, while the latter signifies that enterprises once seen as promising “domestic alternatives” may collapse due to broken financial chains.
Previously, Zhejiang Qingke Semiconductor Co., Ltd. also entered bankruptcy liquidation as a result of a broken financial chain, ruled by the Wucheng District Court in Jinhua City.