On August 11, 2025, global semiconductor packaging and testing equipment giant ASMPT (Advanced Semiconductor Equipment Technology Co., Ltd.) announced the liquidation of its subsidiary, Advanced Semiconductor Equipment (Shenzhen) Co., Ltd., located in Baoan, Shenzhen, and the closure of the factory, causing nearly a thousand employees to face unemployment within three days, sparking protests.
The day after ASMPT announced the closure of the Shenzhen factory, a large number of employees gathered to demand clarification from the union on the legality of the layoffs. One worker loudly questioned, “Why is the company terminating our contracts? What did we do wrong?” The union representative only responded by stating that the company is “undergoing normal closure” and promised to convey their demands but failed to provide any legal basis.
In video footage from the scene, dozens of employees gathered in a meeting room to express their discontent with the company and questioned, “Did the company suddenly lay us off?” Several employees interviewed expressed concerns that the company’s compensation may not be sufficient and also questioned the company’s avoidance of social responsibility.
ASMPT responded by stating that the closure of the factory was not due to losses but part of the “optimization” of global production capacity and supply chain, with future resources focusing on Singapore, Germany, and Huizhou. However, the company’s financial reports showed that AEC had a net income of approximately 20.6 million yuan by the end of 2024, with net assets of around 444 million yuan. The dissolution is expected to incur approximately 360 million yuan in restructuring costs, including severance and lease losses.
Established in 2019, the ASMPT Shenzhen factory reached its peak with 1,300 employees. Dissolving in just six years has left many industry insiders shocked.
The closure incident has prompted a reassessment of Shenzhen’s business environment by the public. Mr. Liu, a volunteer at the Shenzhen Labor Service Social, mentioned that in recent times, Guangdong has seen a near-daily occurrence of companies shuttering or laying off employees, many of which are not due to losses but rather due to a “lack of confidence in the Chinese market.”
He explained, “These companies have sensed risks and are preparing to evacuate. Over the past month, I have received numerous inquiries and pleas for help. Most of the businesses closing this time are not due to poor operational performance or lack of profitability. Perhaps these large companies have sensed something before making such decisions, causing many workers to fall into difficulty.”
Since the late 2010s, the Chinese government has implemented a “mandatory social security” policy, requiring companies to pay full social insurance for employees, placing continued pressure on foreign businesses operating in China.
Mr. Liu also highlighted the significantly higher labor and operating costs in Shenzhen compared to surrounding cities. Employee salaries in Shenzhen are 20% to 30% higher than those in Huizhou, factory rents are two to three times higher, coupled with policies like mandatory social security, foreign companies endure substantial cost burdens in the long run.
An investment consultant who has worked in foreign companies in Shenzhen for a long time also believed that ASMPT was profitable last year, but with a sudden decrease in Chinese orders this year, they might face losses, leading to the company’s decision to withdraw.
Since July this year, many foreign and private enterprises in China have been closing factories one after another, resulting in numerous workers losing their jobs and highlighting the difficulties faced by both companies and workers. A trader who has been involved in foreign trade in Guangdong for twenty years, under a pseudonym Chen Debiao, bluntly stated that behind the exodus of foreign companies lies policy and environmental pressures. He said, “Foreign companies are leaving due to policy and cost pressures, while workers are abruptly unemployed without warning, and the government has not responded. Both companies and workers have become sacrifices of the system.”
Retired professor Li Hong from the China University of Technology’s Management School, stated in an interview that many of China’s policies have deviated from market-oriented directions. “Foreign companies can still move elsewhere, but mainland private enterprises have no way out. Institutional factors are the key.”
Industry analysts generally believe that ASMPT’s case is not an isolated incident but rather a microcosm of the deteriorating operating environment for foreign companies in mainland China. In the past two months, several foreign and private enterprises in Guangdong have closed factories or laid off employees, leading to a large number of workers becoming unemployed and many being forced to switch to grassroots industries such as logistics and courier services, resulting in income reductions.
ASMPT holds a market share of up to 38% in the Chinese market. Miss Chen, a semiconductor analyst from Jiangsu, expressed, “ASMPT’s withdrawal from Shenzhen sends a signal to the industry chain. The overall environment is harsh, making it extremely difficult for private enterprises.”
The closure of ASMPT’s factory reflects the dual struggle faced by Chinese enterprises and workers. Foreign companies choose to leave due to policy and cost pressures, leaving workers abruptly unemployed. Some may receive compensation but remain uncertain about their future. While foreign companies can relocate, private enterprises find it hard to cope.
Miss Chen warned that ASMPT’s sudden dissolution may just be the beginning of the exodus of foreign companies. “If policies and the business environment do not improve, similar incidents will only increase in the future.”