(Yicai Global) Feb. 13 -- The Shanghai unit of the US’ Amkor Technology, the world’s second-largest integrated circuit packaging and testing company, has refuted rumors that it will start to let staff go and that it will move out of China, as demand drops amid a weak global semiconductor market.

Amkor Technology does not intend to shift production out of Shanghai or even China and the firm, which employs more than 5,400 staff at its factory in the Shanghai Waigaoqiao Free Trade Zone, has no plans to reduce its headcount, Amkor Shanghai said on Feb. 11. No further information was given about the firm’s business performance and future plans.

There are also rumors circulating that the Shanghai plant, which covers an area of 120,000 square meters, might shut down for one week from Feb. 27 to March 5 due to a lack of orders. Both the Amkor headquarters and its Shanghai unit have not responded to Yicai Global’s queries about the authenticity of these rumors.

Since the fourth quarter last year, weak consumer demand and high inventories have affected packaging and testing service providers.

Global semiconductors sales plunged 14.7 percent in the fourth quarter 2022 from a year earlier, and dropped 7.7 percent from the previous quarter, to USD130.2 billion, according to data from the Semiconductor Industry Association.

Chipmakers stocked up on raw materials during the busy times and the overall equipment utilization rate of the industry is currently very low, Zheshang Securities said in a research report. As one of the final stages of production, packaging and testing will continue to be affected by a drop in sales in the first quarter, it added.

Editor: Kim Taylor