Chinese tech giants Hygon and Sugon call off merger, say they're still besties
(2025/12/11)
- Reference: 1765415407
- News link: https://www.theregister.co.uk/2025/12/11/hygon_sugon_merger_cancelled/
- Source link:
Chinese tech giants Hygon and Sugon have called off their planned merger.
Hygon is a chipmaker that produces GPUs and processors. Sugon makes servers, supercomputers and interconnects. To understand the potential impact of the transaction, imagine a merger between AMD and Supermicro to create an entity that makes most of the technologies needed to build a supercomputer and has the manufacturing muscle to deliver the machines.
Combining the companies looked good on paper, but getting the deal done meant pushing a lot of paper because Sugon is Hygon’s largest shareholder and the transaction involved other entities. According to statements issued by Hygon, in the time since the May [1]announcement of the merger, market conditions shifted and so did the stance of some stakeholders.
[2]
Attempts to reconcile differing opinions failed, and all concerned decided to call off the merger.
[3]
[4]
“The decision to terminate this transaction was made after careful study by the company and full communication and friendly consultation with the counterparty,” Hygon’s announcement states.
[5]Tencent Cloud launches CentOS variant tuned for Chinese silicon
[6]HPE to offload remaining stake in Chinese joint venture H3C
[7]US closes subsidiary loophole on dozens of Chinese entity list members
[8]What's big, blue, and short on Intel? The supercomputer world's podium: USA tops Top500 with IBM Power9
The decision not to merge doesn’t mean an end to collaboration between the two companies. Indeed, Hygon execs said the company will get even closer to Sugon, and “give full play to the advantages of Sugon in cutting-edge technologies such as super-node computing power, scientific large model development platform, and cluster systems.”
The two companies also dismissed suggestions the decision not to merge would harm China’s computing industry.
H200 hijinks
In a Q&A session, investors asked if the Trump administration’s [9]decision to allow Nvidia to sell its H200 accelerators to select Chinese buyers is a challenge to Hygon’s GPU business.
An unidentified exec responded by saying the H200 “may intensify competition in the domestic high-end chip market, but its accompanying sales share will push up procurement costs, and market penetration still has challenges.” Hygon intends to keep improving its own accelerators and demonstrating their suitability for customers’ workloads. Execs also said Hygon will continue to ensure its GPUs remain compatible with Nvidia’s CUDA APIs, an important consideration as they’re very widely used by AI developers. ®
Get our [10]Tech Resources
[1] https://www.theregister.com/2025/05/27/hygon_sugon_china_x86_supercomputing/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aTpP7Fep7AKPD7pP5gfrOAAAAA0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aTpP7Fep7AKPD7pP5gfrOAAAAA0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aTpP7Fep7AKPD7pP5gfrOAAAAA0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2024/07/23/tencentos_server_v3_launch/
[6] https://www.theregister.com/2023/01/03/hpe_to_sell_remaining_share/
[7] https://www.theregister.com/2025/03/26/us_entity_list_subsidiaries/
[8] https://www.theregister.com/2018/11/13/500_supercomputers_list/
[9] https://www.theregister.com/2025/12/09/nvidia_h200s_china_ai/?td=rt-3a
[10] https://whitepapers.theregister.com/
Hygon is a chipmaker that produces GPUs and processors. Sugon makes servers, supercomputers and interconnects. To understand the potential impact of the transaction, imagine a merger between AMD and Supermicro to create an entity that makes most of the technologies needed to build a supercomputer and has the manufacturing muscle to deliver the machines.
Combining the companies looked good on paper, but getting the deal done meant pushing a lot of paper because Sugon is Hygon’s largest shareholder and the transaction involved other entities. According to statements issued by Hygon, in the time since the May [1]announcement of the merger, market conditions shifted and so did the stance of some stakeholders.
[2]
Attempts to reconcile differing opinions failed, and all concerned decided to call off the merger.
[3]
[4]
“The decision to terminate this transaction was made after careful study by the company and full communication and friendly consultation with the counterparty,” Hygon’s announcement states.
[5]Tencent Cloud launches CentOS variant tuned for Chinese silicon
[6]HPE to offload remaining stake in Chinese joint venture H3C
[7]US closes subsidiary loophole on dozens of Chinese entity list members
[8]What's big, blue, and short on Intel? The supercomputer world's podium: USA tops Top500 with IBM Power9
The decision not to merge doesn’t mean an end to collaboration between the two companies. Indeed, Hygon execs said the company will get even closer to Sugon, and “give full play to the advantages of Sugon in cutting-edge technologies such as super-node computing power, scientific large model development platform, and cluster systems.”
The two companies also dismissed suggestions the decision not to merge would harm China’s computing industry.
H200 hijinks
In a Q&A session, investors asked if the Trump administration’s [9]decision to allow Nvidia to sell its H200 accelerators to select Chinese buyers is a challenge to Hygon’s GPU business.
An unidentified exec responded by saying the H200 “may intensify competition in the domestic high-end chip market, but its accompanying sales share will push up procurement costs, and market penetration still has challenges.” Hygon intends to keep improving its own accelerators and demonstrating their suitability for customers’ workloads. Execs also said Hygon will continue to ensure its GPUs remain compatible with Nvidia’s CUDA APIs, an important consideration as they’re very widely used by AI developers. ®
Get our [10]Tech Resources
[1] https://www.theregister.com/2025/05/27/hygon_sugon_china_x86_supercomputing/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aTpP7Fep7AKPD7pP5gfrOAAAAA0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aTpP7Fep7AKPD7pP5gfrOAAAAA0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aTpP7Fep7AKPD7pP5gfrOAAAAA0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2024/07/23/tencentos_server_v3_launch/
[6] https://www.theregister.com/2023/01/03/hpe_to_sell_remaining_share/
[7] https://www.theregister.com/2025/03/26/us_entity_list_subsidiaries/
[8] https://www.theregister.com/2018/11/13/500_supercomputers_list/
[9] https://www.theregister.com/2025/12/09/nvidia_h200s_china_ai/?td=rt-3a
[10] https://whitepapers.theregister.com/
What do you expect from China ?
The great advantage of having a Great Leader (tm) is that mergers can be decided directly, as a matter of national security, by the Great Leader (tm) deciding that they should be involved.