New Delhi: The escalating US-China tariff war has ratcheted up to enter the field of biotechnology and science. For the first time, China has put American genome-sequencing equipment manufacturer Illumina on its “unreliable entity list”.
The move was a direct counter to the US imposing sanctions on Beijing Genomics Institute (BGI), another global giant that makes genome sequencing equipment.
This is no ordinary tit-for-tat sanctions battle, but a clash of two giants in the sector.
It reflects the muscle of a once obscure Chinese biotech company that grew to corner half the global market that until recently was dominated by America.
In fact, BGI began as one of Illumina’s biggest consumers of gene sequencing tools in 2010 before it began manufacturing them on its own in 2014. Today, both companies, BGI and Illumina, lead the world’s genome sequencing revolution, and have a history of collaboration—and collision.
Both BGI and Illumina have also sued each other in multiple countries for patent infringement.
“It’s yet another story where a Chinese firm—BGI and its spinoff MGI—went from being a huge customer to being a major competitor,” reads a post on X by Kyle Chan, a postdoctoral researcher at Princeton University.
Under the Biosecure Act passed in September 2024, the US government wanted to prohibit the import of biotech manufacturing material from other countries, mainly China. This included BGI and its subsidiaries like Complete Genomics, a US-based firm, and MGI, the manufacturing arm of BGI.
With the number of sanctions imposed, BGI and MGI have been nearly “excluded from all European and North American markets,” according to a report in South China Morning Post.
In response, China on 4 February placed Illumina on its “unreliable entity list”, allowing the Chinese government to impose punitive sanctions on the company.
Illumina holds more than 60 percent of the global market share in the genome sequencing sector, and China accounts for 7 percent of its sales. Meanwhile, MGI’s latest gene-sequencing machine makes it possible to sequence an entire human genome for $100, which is revolutionary for the industry.
The cost of whole human genome sequencing until 10 years ago was about $10,000, before dropping to $600 in 2022.
With the sanctions, both China and US’s genome sequencing industries are expected to take a hit.
“Genome sequencing can change the face of modern medicine as we know it,” said Dr Priya Yadav, Techno Commercial Lead, Genomics, Meril. “It can help understand and possibly cure rare hereditary cancers, neurodevelopmental disorders and prenatal diseases. A move such as this is obviously a huge hit for an industry that is on the cusp of breakthroughs.”
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History of BGI and Illumina
Genome sequencing, the process of unravelling the entire genetic make-up of any organism using DNA samples, is key to understanding human genetics and diseases and furthering personalised medicinal treatments.
Highly technical and precise machines called DNA sequencers are used for genome sequencing, and there are two main methods globally: Sanger sequencing and the newer Next Generation Sequencing (NGS).
Illumina was one of the pioneers in NGS technology, with its Illumina analyser machine that was launched in 2007. In 2010, when BGI purchased as many as 128 NGS machines from Illumina, other genomic centres accused Illumina of playing favourites with BGI.
With an army of 128 genome sequencers, partially funded by a loan from the China Development Bank, BGI first set about rapidly sequencing genomes almost “like a factory”.
Unlike Illumina, which began first as a manufacturing company and then moved to providing genome sequencing services, BGI began purely as a genome sequencing institute. The goal, according to an article in Nature journal from 2010, was to “produce cheap, high-quality genome sequences” and to change the balance of genome sequencing power in the world.
In 2013, however, BGI turned around and bought Complete Genomics, a US-based gene sequencing company and a competitor of Illumina.
This gave BGI a foothold in the US market, along with access to Complete Genomics’ sequencer production technologies. Even in 2013, Illumina’s CEO had tried to stop the acquisition and in an interview with The New Yorker, mentioned how BGI is “working hard to establish Chinese dominance in the market”.
What followed was a decade-long competition between Illumina and the BGI Group by unveiling of newer, cheaper methods to sequence DNA both at a commercial and clinical level.
While BGI through Complete Genomics began entering US markets, Illumina continued to exert its influence in the Chinese market. However, since 2022, BGI and MGI’s share of the Chinese market has exceeded Illumina’s, according to South China Morning Post.
This is partly because the Chinese government has aggressively supported BGI and China’s genomics research industry through R&D subsidies, export financing and other policies.
However, experts like Yadav contend that pricing shouldn’t be the only factor in a field like genome sequencing that is still relatively new.
“The kind of prohibitive pricing war that BGI-Illumina are engaging in is eventually harmful for the industry—$200 tests, $100 tests and even lower pricing should not compromise on the quality of genome sequencing needed for different purposes,” said Yadav.
Future of genome sequencing
A 2024 paper published by US-based Center for Security and Emerging Technology compared BGI’s growth in the global genomics market to Huawei’s domination in 5G and telecommunications back in early 2000s. The two companies share striking similarities—both grew in the Chinese factory city of Shenzhen, began as manufacturing units using other global companies’ technologies, and then developed their own systems.
Huawei too, like BGI, got into patent infringement lawsuits with global competitors like Cisco and Motorola.
If there is anything to learn from Huawei’s story, it is that the Chinese government has and will continue to offer behind-the-curtains policy support to indigenous genomics companies like BGI, making it all the more difficult for Illumina and other global companies to stay in the market. With an overt move like the “unreliable entity list”, however, Illumina faces near exclusion from China. And the company has taken note.
The latest earnings call meeting in Illumina on 6 February addressed the China question in great detail, with senior management saying that they’re doing their best to “talk to relevant stakeholders” to reach a resolution.
In response to questions about BGI’s involvement, the CEO of Illumina said: “We actually like competition, we take it very seriously. It keeps us on our toes and makes sure the customer gets the best service.”
Yadav pointed out that “it isn’t just US and China but the genomics industry globally that will take a hit with this step—in a time when the goal should be to provide genomics access to everyone, these moves will hinder that”.
(Edited by Nida Fatima Siddiqui)