Chinese Chip Heavyweight Abandons Acquisition of Server Firm
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Chipmaker Hygon Information Technology Co. Ltd. has abandoned its plan to acquire server-maker Dawning Information Industry Co. Ltd., or Sugon, ending a monthslong effort to consolidate the two U.S.-sanctioned tech heavyweights that are critical to China’s computing infrastructure.
Shanghai-listed Hygon ditched the deal citing major changes in market conditions and the complexity of the merger, according to an exchange filing dated Wednesday. The company also said that the decision will not severely affect its operations and financial status as well as its future cooperation with Sugon.
The deal, first announced in May, would have seen Hygon acquire Sugon through a share swap. Under detailed merger terms disclosed in June, Sugon shareholders were set to receive 0.5525 Hygon shares for each share held. This translated to a valuation of 115.967 billion yuan ($16 billion) for Sugon.
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- Hygon abandoned its $16 billion share-swap deal to acquire Sugon, citing market changes and merger complexity.
- The terminated merger would have increased Hygon’s shares by 35% and led to Sugon delisting from the Shanghai Stock Exchange.
- Both firms, listed on the U.S. Entity List since 2019, remain critical to China’s tech infrastructure and will continue to cooperate.
- Hygon Information Technology Co.Ltd.
- Hygon Information Technology Co., Ltd. is a chipmaker that recently abandoned its plan to acquire server-maker Dawning Information Industry Co., Ltd. (Sugon). It was formed in 2014 and has collaborated with AMD to produce x86-based CPUs. Hygon is listed in Shanghai and, along with Sugon, was added to the U.S. Entity List in 2019.
- Dawning Information Industry Co.Ltd.
- Dawning Information Industry Co.Ltd., also known as Sugon, is a server and cloud solutions provider founded in Tianjin in 2006. Partially owned by an investment arm of the Chinese Academy of Sciences' Institute of Computing Technology, Sugon was the subject of an attempted acquisition by Hygon Information Technology Co.Ltd., which ultimately fell through.
- Advanced Micro Devices Inc.
- Advanced Micro Devices Inc. (AMD) is a U.S. chip giant that collaborated with Hygon Information Technology Co. Ltd. Hygon was formed in 2014 and worked with AMD to produce x86-based CPUs domestically. This collaboration highlights the intricate relationships within the global semiconductor industry, even amidst geopolitical and technological shifts.
- 2006：
- Sugon was founded in Tianjin.
- 2014：
- Hygon was formed.
- 2019：
- Hygon and Sugon were added to the U.S. Commerce Department’s Entity List.
- May 2025：
- The deal for Hygon to acquire Sugon was first announced.
- June 2025：
- Detailed merger terms were disclosed, including a share swap ratio of 0.5525 Hygon shares per Sugon share.
- December 10, 2025：
- Hygon announced the abandonment of the plan to acquire Sugon.
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