[News] Chipmaker Hygon to Acquire Sugon as China Pushes Chip Sector Consolidation

According to Commercial Times, citing South China Morning Post, China’s semiconductor sector has seen a surge in mergers and acquisitions in 2025, driven by the rollout of the “Six M&A Guidelines” and booming AI demand. The latest case involves local chip designer Hygon Information Technology and supercomputer firm Sugon, which announced plans for a major asset restructuring on May 25.

The report notes that Hygon plans to acquire Sugon through a share swap by issuing new shares to all of Sugon’s A-share shareholders, along with raising additional supporting funds as part of the deal.

The merger marks a major step in consolidating two core players in China’s computing supply chain. As noted by South China Morning Post, Hygon develops central processing units (CPUs) and deep computing units. The company is seen as a key force in China’s push for semiconductor self-sufficiency, with analysts cited by South China Morning Post suggesting its products could serve as alternatives to NVIDIA’s AI chips.

Sugon is a leading supercomputer manufacturer in China. As noted by South China Morning Post, the U.S. government added Sugon and its three affiliates to the Entity List in 2019, restricting their access to chips from American suppliers.

South China Morning Post notes that the merger is the latest sign of consolidation in China’s semiconductor industry, as companies face increasing difficulty securing funding amid escalating U.S.-China tech tensions.

Meanwhile, Commercial Times, citing industry analysts, indicates that Hygon’s merger with Sugon could unify key segments of the value chain—from chip design to system integration—and marks the first absorption-type merger between listed firms since China revised its restructuring rules.

Commercial Times highlights that China’s semiconductor sector has seen ten merger and restructuring deals since early 2025, involving major players such as National Silicon Industry Group and Wingtech Technology.

For instance, in March, Chinese chip equipment giant Naura Technology Group announced a plan to acquire a 9.5% stake in photolithography coating equipment maker Kingsemi for 1.69 billion yuan (USD 235 million). According to South China Morning Post, it would be the first such deal between semiconductor equipment firms listed in China.

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• [News] China’s Chip Equipment Giant Naura Tech Acquires Stake in Kingsemi amid Local Industry Integration

(Photo credit: Hygon)