BEIJING’S surprise move to blacklist Illumina has unleashed a frenzy among the US firm’s Chinese rivals to win market share from the gene-sequencing giant.
While Illumina is still assessing the consequences of being added to China’s unreliable entity list earlier this month, Chinese makers of instruments that read genetic information have wasted little time trying to persuade the San Diego-based company’s customers to switch through both social media and private outreach.
MGI Tech, one of the largest local manufacturers and a spin off of BGI Genomics, is offering free trials to existing Illumina customers – the first time it has rolled out such a large-scale promotion covering all of its models, according to a source familiar with the matter. Cygnus Bio, a smaller company, also announced in a WeChat post that it is offering free trials “based on client switching needs”.
Illumina’s blacklisting puts its replacement by cheaper domestic machines “on an acceleration path”, wrote Shenzhen Zhenmai Biological Technology, adding that it could offer subsidies as part of its proposals for new clients. “Switch now, Sikun sequencers help with a seamless transition,” read the title of a WeChat post from Zhengzhou Sikun Biological Engineering.
The pile-on reflects the growing complexity global companies have to navigate in the face of the US-China trade war. Illumina was blacklisted in a retaliatory move by Beijing after US President Donald Trump imposed 10 per cent tariffs on Chinese goods. This came after MGI was added to the US blacklist.
MGI shares have surged more than 50 per cent since Beijing’s move against Illumina. Stocks of BGI and genetic sequencer maker Novogene also jumped, alongside medical device and diagnostic kit makers such as Dian Diagnostics, Lepu Medical Technology and Amoy Diagnostics.
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In a response, Illumina said it has seen no change in its customer base.
“Illumina has taken immediate steps towards achieving a positive resolution, including holding productive meetings with Mofcom and the relevant Chinese government authorities,” the company said. “Our goal remains to find a positive resolution and to continue serving Chinese customers, supporting the important work they are doing to improve human health by unlocking the power of the genome.”
The US company, which made around 7 per cent of its revenue in China last year, has steadily lost market share to local companies in recent years and the trend is only set to accelerate, said John Yung, head of Asia healthcare research at Citigroup. Many of the laboratories that perform genetic sequencing already have machines from both Illumina and domestic companies and have been looking into substitutes, he said.
“This is a clear demonstration that the critical technology that was previously only acquired by, or only owned by Illumina, most of these have already been acquired by Chinese companies,” he said.
Rising complexity
Genetic sequencing instruments are used in a wide range of research and clinical settings, including studying biological processes, diagnosing rare diseases and matching cancer patients to targeted treatments. The makers of the sequencers also make money from selling reagents needed for running the machines, a model industry practitioners often compare to printers and ink cartridges.
Since entering China in 2005, Illumina has invested in partnerships, incubation and manufacturing. But lower-price offerings from local companies have been eroding its market share, which fell from 59 per cent in 2020 to 37 per cent in 2022, according to local media reports citing data platform Joinchain. Between 2023 and 2024, MGI won 47 per cent of government contracts for newly installed machines across China, overshadowing Illumina’s 16 per cent.
Yung sees Chinese machines taking the “absolute majority” of market share in about three years, similar to how domestic alternatives have squeezed out overseas makers of MRI, PET/CT and ultrasound machines. But, according to Yung, foreign companies may still command 10 to 15 per cent of the market. BLOOMBERG
