TP-Link cuts staff at Shanghai chip unit, retains Shenzhen facility

TP-Link, China’s leading Wi-fi router manufacturer, has laid off most employees at a chip development unit in Shanghai amid setbacks, according to people familiar with the matter and local media reports.

Lianzhou International, known globally as TP-Link Systems and the overseas arm of the router maker, cut the majority of workers at its Shanghai-based chip unit last week, according to two people with knowledge of the situation, who declined to be named because they are not authorised to speak to news media.

The lay-offs, first reported by Chinese media on Saturday, primarily affected employees working on the front-end module of Wi-fi chipsets, spanning roles such as algorithms and verification, according to the reports.

The total number of affected employees remains unclear. TP-Link did not immediately respond to a request for comment on Monday.

One source said the cuts followed difficulties in chip development, with one product failing to pass final testing.

The move signals a downsizing of TP-Link’s overseas business, which comes months after the US government reportedly launched a national security probe into the company in December.
The US Commerce Department, which oversees controls on semiconductor exports to China, subpoenaed TP-Link at the end of last year for details on its corporate structure, Bloomberg reported at the time. US officials found that the company undercut rivals on price to capture a dominant share of the local market, according to the report, which cited unnamed sources.

However, TP-Link Systems may not be fully retreating from chip development. The company also operates a chip unit in the southern technology hub of Shenzhen, which so far remains unaffected, according to one of the people familiar with the matter.

Founded in 1996 by brothers Zhao Jianjun and Zhao Jiaxing, TP-Link began expanding overseas in 2005. The company has established 43 wholly owned overseas subsidiaries, with products sold in more than 170 countries and regions, according to its website.

TP-Link Systems entered the US market in 2008, with its global headquarters in Irvine, California.

The company controlled about 60 per cent of the US retail router market last year, up from about 10 per cent at the start of 2019, according to data reviewed by US investigators and reported by Bloomberg. In the Wi-fi 7 mesh systems segment – the company’s most advanced consumer-grade routers – TP-Link held nearly 80 per cent of the market, the report said.

TP-Link Systems, however, said on its website that its US market share has been “inaccurately reported as being much higher than it actually is”. The company cited data from market research firm Circana showing that it held a 36.5 per cent share of the US consumer router market by volume in 2024. South China Morning Post