Chinese supercomputer maker Sugon and chip developer Hygon call off merger plans

Chinese supercomputer maker Sugon and chip designer Hygon Information Technology have called off a planned mega-merger that had been under discussion for months, in a surprise move that could complicate the country’s tech self-sufficiency efforts in the semiconductor and high-performance computing sectors.

The two Shanghai-listed companies late on Tuesday said they cancelled merger talks because “the market environment has changed significantly since the initial planning stages of this transaction”. They added that “the conditions for implementing this major asset restructuring are not yet mature”.

They said the factors which affected their respective stocks included “changes in the domestic and international environment, the overall trend of the mainland share market, changes in the artificial intelligence industry’s popularity and market expectations”.

“By not merging, Hygon can operate as an independent chip supplier, providing core computing chips to the entire domestic server industry,” said Li Jun, general manager at Beijing-based Sugon, which is listed as Dawning Information Industry Co.