"I Can't Trust Them" The Company China Sees as a Thorn in Its Side [Tech Talk]

Illumina, a U.S. Genome Sequencer Manufacturer,
Added to China's "Unreliable Entities List"
Genome Sequencers: The Semiconductors of Life Sciences

When U.S. President Donald Trump imposed additional tariffs on China, Chinese authorities retaliated on the 4th (local time) by imposing counter-tariffs on U.S. imports. Furthermore, China added the American company Illumina to its "unreliable entities list" (the Chinese version of a blacklist).

Illumina is a biotechnology company that manufactures genome analysis equipment, with annual sales around $4 billion (approximately 5.8 trillion KRW). It is the largest company in the global genome analysis market but is far removed from the big tech companies that dominate the world economy. However, as genetic engineering has recently made remarkable advances, genome companies have emerged as a new front in the U.S.-China competition.

Sequencers that decode biological DNA into digital data

Illumina's sequencer, a DNA sequencer manufacturer based in the United States. Illumina website

Genome analysis refers to the electronic analysis and digitization of an organism's nucleotide sequences. The tool used for this task is commonly called a genome analyzer or simply a "sequencer." Using the digitized DNA information, scientists can track new viruses or bacteria and assess the likelihood of rare disease manifestation in patients.

Genome analysis is still closer to scientific research than to the market. Sequencers primarily serve government health authorities, corporate research labs, and some large hospitals. Illumina, which recorded $4.4 billion (about 6.37 trillion KRW) in sales last year, is the largest player in the global sequencer industry.

China has designated this company as an "unreliable entity," meaning it may face various disadvantages when conducting business within China. In other words, it has been placed on the Chinese version of a blacklist. However, the "sequencer conflict" between the U.S. and China has been ongoing for much longer. During former U.S. President Joe Biden’s administration in March 2023, the U.S. government also blacklisted BGI, the overseas branch of the Chinese sequencer manufacturer MGI.

Only three scientific superpowers worldwide can design and manufacture

Sequencer from China's BGI (left), sequencer product line from UK's ONT. BGI, ONT official websites

Although sequencers are laboratory equipment, their strategic importance is growing. Moreover, only a handful of countries worldwide possess the scientific capability to manufacture sequencers. Illumina’s equipment is developed in the U.S. and the U.K. The current Illumina sequencer originated from the acquisition of the British sequencer company Solexa. In China, MGI and BGI effectively monopolize the domestic market.

Besides these, there are very few startups such as Ion Torrent, a subsidiary of the American scientific equipment company Thermo Fisher, Pacific Biosciences (PACBIO), and Oxford Nanopore Technologies (ONT) in the U.K. In other words, the triad of the U.S., China, and the U.K. has already solidified dominance in this field. South Korea’s government genome public projects also rely entirely on overseas sequencers.

From synthetic biology to advanced diagnostics... the rice of future industries

The genome analysis laboratory of the Korea Disease Control and Prevention Agency in 2022. Korea's sequencer equipment also relies on imports from overseas. Photo by Yonhap News

The power of sequencers was most evident during the COVID-19 pandemic. Even after the development of vaccines by Pfizer-BioNTech, Moderna, and AstraZeneca, numerous variants of the coronavirus emerged and continued to spread. It was thanks to next-generation sequencers that scientists could scan the virus genome and track variants in real time. This utilized the "whole genome sequencing (WGS)" technology, which decodes an organism’s entire genome in just a few hours.

Sequencers are expected to become essential equipment in many areas of biotechnology. For example, mRNA vaccines, which played a key role in COVID-19 vaccination, contain RNA that is very fragile, making it difficult to monitor RNA degradation during manufacturing. Next-generation sequencers can analyze not only DNA but also RNA, serving as "quality inspectors" for vaccine materials.

Next-generation diagnostic technologies, such as synthetic biology that edits microbial DNA to produce more efficient fuels or biodegradable plastics, and liquid biopsies that diagnose dozens of cancers by analyzing human genomes through WGS, are also realized through sequencers. Semiconductors are often compared to the "rice" of electronics, and soon sequencers have the potential to become essential equipment spanning healthcare, pharmaceuticals, biotechnology, and scientific research industries. The spark of U.S.-China technological competition is likely to shift from semiconductors to sequencers.