MGI Tech, the China-based sequencing instrument maker, plans to divest its U.S. subsidiary, according to Bloomberg, citing geopolitical reasons for the move. The company did not disclose a buyer, transaction structure, or financial terms.
MGI Tech, a subsidiary of BGI Group, has positioned its DNBSEQ platform as a price-competitive alternative to Illumina in research and clinical sequencing. The company has gained market share in Asia, Europe, and Latin America, but its U.S. presence has faced headwinds including congressional scrutiny over data security and trade restrictions.
The timing coincides with Illumina's announcement this week that it is cutting full-year revenue guidance and implementing a $100 million cost-reduction program, citing a China sales ban among other factors. The twin developments underscore a deepening fracture in the global sequencing market: Illumina is losing access to China while MGI exits the United States.
For U.S. labs that had evaluated MGI instruments as a hedge against Illumina's pricing, the divestiture raises questions about long-term service, support, and reagent availability. In the near term, Illumina, Element Biosciences, and Ultima Genomics may benefit from reduced competition in North America. However, the removal of MGI's pricing pressure could reduce incentives for incumbents to lower consumable costs, a concern for high-volume sequencing users including population genomics programs and liquid biopsy labs.
The broader question is whether the bifurcation of sequencing supply chains along geopolitical lines becomes permanent, complicating international collaboration on large genomic datasets that depend on cross-compatible platforms.