Latest news with #Sugon
Asia Times
28-05-2025
- Business
- Asia Times
Sugon, its suppliers hit by US sanctions, to merge with Hygon
Sugon, also known as Dawning Information, a state-owned computing server maker in China, will be acquired by its subsidiary Hygon Information Technology to deal with the inability of its suppliers to source US chips due to sanctions. Hygon, a Shanghai-listed fabless chipmaker, has a market cap of 316 billion yuan (US$44 billion) while Sugon has a market cap of 90.6 billion yuan. 'At present, the development of China's information technology industry represented by artificial intelligence (AI) is in a complex situation where opportunities and challenges coexist,' Hygon's executives told the media in the company's first quarter result announcement briefing on Monday. 'Considering the current capital market policies and development needs, the two parties (Hygon and Sugon) decided to merge through a share swap.' The executives said the reorganization is conducive to the coordinated development of both parties, reducing costs and increasing efficiency, consolidating and expanding the two companies' market share in the domestic computing power industry. The decision came after the US Commerce Department's Bureau of Industry and Security (BIS) added 80 entities, mainly in China, to its Entity List on March 25. Twelve companies were accused of developing advanced AI, supercomputers, and high-performance AI chips for China-based end-users with close ties to the country's military-industrial complex. Sugon's key suppliers or business partners, including Henan Dingxin Information Industry Co Ltd, Nettrix Information Industry Co Ltd, Suma Technology Co Ltd, and Suma-USI Electronics Co Ltd, are among those sanctioned. 'These entities have provided significant manufacturing capabilities to Sugon, a Chinese high-performance computing server manufacturer added to the Entity List in 2019 for building supercomputers used by military end users and supporting China's destabilizing military modernization efforts,' said the BIS. The BIS also sanctioned six subsidiaries of Inspur Group, another major computing server maker in China, which was added to the Entity List in March 2023. The BIS accused them of contributing to Inspur's development of supercomputers for military end use, particularly by acquiring or attempting to acquire US-origin items supporting supercomputer projects for the Chinese government or military. In June 2019, the BIS sanctioned Sugon and Hygon and their senior executives due to their connection with the People's Liberation Army. In December of the same year, Sugon spun off a 200-strong team to set up Nettrix, which then took up Sugon's role of supplying sanctioned Chinese companies and institutions with computers that used Intel and Nvidia chips and Microsoft software. In August 2024, the New York Times exposed this loophole. A follow-up report by Asia Times showed how Sugon's Vice President Qin Xiaoning founded Nettrix and received her rewards in Hygon's 2022 public listing. Sugon said on May 15 this year that it adjusted its business structure in the third quarter of 2024 by selling more high-end components and fewer low-profit servers. It said its revenue fell 22.6% year-on-year in the fourth quarter, and gross profits of its core business decreased 4.7%. The company said it would focus on high-end computing parts and solutions businesses and form an ecosystem with Hygon and other associate companies to sell chips, servers, cloud services, and AI computing power. In the first quarter of this year, the company's revenue surged 4.3% year-on-year to 2.59 billion, and its net profit rose 30.8% to 186 million yuan. However, the BIS sanctioned Nettrix in March this year. In April, the Trump administration told Nvidia that it would need a license to export its H20 chips or similar products to China. Although Sugon can no longer source Nvidia's graphics processing units (GPUs), it can use Hygon's deep computing units (DCUs) or general-purpose GPUs (GPGPUs). The most potent Hygon DCU model is the Z100, which was developed with open-source software called ROCm. A Chinese technology columnist said the performance of Z100 is about 25-55% of that of Nvidia's A800. A Tianjin-based columnist using the pseudonym 'Little Fish' says in an article that the vertical integration of Hygon (chips) and Sugon (servers) is a good idea as they can rely on each other's strengths. However, he also points out that Sugon would lose competitiveness over the long run if Hygon's chips could not catch up with other players. On May 13, the US released a guideline warning worldwide companies not to use Huawei Technologies' Ascend chips. Some analysts expect the supply of Ascend AI chips in the Chinese markets to surge, leaving less room for Sugon and Hygon to grow. Read: Sugon spin-off helps China evade US chip bans
Yahoo
28-05-2025
- Business
- Yahoo
China allegedly making its own supercomputer chips to cut dependence on US tech
Supercomputers have been a powerful tool ever since their birth in the 1960s. Today, almost every nation has advanced supercomputing facilities and systems capable of solving the most complex of tasks. Chinese semiconductor manufacturer Hygon and supercomputer builder Sugon have announced the creation of a vertically integrated computing giant capable of building high-performance systems entirely with domestic technology. The processor is a result of the stock swap merger between the two companies. This gives China control over both the chip design and supercomputer manufacturing. The process began in 2016 when Hygon licensed AMD's first-generation Zen CPU design and x86-64 architecture. This is the most commonly used architecture for processors in computing today. Hygon used the original license to develop its Dhyana processor series, which gained support from Linux kernel developers and adoption by Chinese tech giants like Tencent. Meanwhile, Sugon used the Dhyana processor to make a machine that ranked in the Top 500 list of the world's most powerful supercomputing systems. This partnership proved successful. The merger timing coincides with Hygon's most ambitious processor announcement yet—the upcoming C86-5G processor. The CPU features 128 cores, capable of running 512 simultaneous threads through four-way simultaneous multithreading (SMT4). In other words, this means that the CPU can run 512 operations or processes simultaneously. This roughly doubles the processing power offered by commercial Intel and AMD CPUs, which use two-way SMT. Beyond threading, the C86-5G delivers a 17% improvement in instructions per cycle compared to its predecessor. This points to architectural improvements beyond adding cores to the CPU. The processor also supports massive amounts of memory (up to 1TB) and modern connectivity features, putting it on par with current Intel and AMD chips. Hygon went from licensing AMD's technology in 2016 to developing competitive processors independently. Now, combined with Sugon's supercomputing expertise, they can build complete high-performance systems entirely with Chinese technology. The merger reflects China's broader strategy of building domestic semiconductor capability and reducing dependence on American chips. It's a strategy that reflects broader industry practices. Major players such as AWS, Microsoft, and Google routinely co-develop processors and server architectures to optimize system performance. For China, this vertical integration addresses critical supply chain vulnerabilities since both companies appear on U.S. export restriction lists. The newly combined entity is expected to draw considerable attention from Chinese buyers who are actively looking for homegrown alternatives to American-made technologies.
South China Morning Post
26-05-2025
- Business
- South China Morning Post
Sugon, Hygon merger is latest sign of consolidation in China's computing sector
Chinese supercomputer maker Sugon and chip designer Hygon Information Technology have announced a merger plan, marking the latest consolidation in the country's high-performance computing sector amid US export restrictions. Under the proposed deal, Hygon will absorb Sugon shares through a stock swap agreement and issue new mainland China-listed shares to Sugon's shareholders, according to their stock exchange filings on Sunday. To avoid fluctuations in share prices from the deal, both companies' Shanghai-listed shares would be suspended for up to 10 trading days starting Monday, according to the filings, which did not disclose the amount of money involved. The merger marks a major move to consolidate two of the leading players in China's computing supply chain. Hygon, which was founded in 2014, specialises in the design of central processing units (CPUs) and so-called deep computing units, an accelerator card specially designed for artificial intelligence (AI) and deep learning. This photo taken on May 24, 2023 shows engineers working at the Wuhan Supercomputer Centre in China's central Hubei province. Photo: AFP The company is seen as an important player in the country's push for semiconductor self-sufficiency, with analysts suggesting its products could become an alternative for AI chips from Nvidia, which have come under tighter export restrictions from the US.
Nikkei Asia
26-05-2025
- Business
- Nikkei Asia
China chipmaker Hygon, server maker Sugon agree to merger
SHANGHAI -- Chinese state-backed chipmaker Hygon Information Technology and server producer Dawning Information Industry, better known as Sugon, have agreed to merge as the country races to cut dependence on foreign suppliers. The companies signed a letter of intent for a "merger by absorption" on Sunday, according to filings to the Shanghai Stock Exchange. Hygon will acquire Sugon by issuing mainland-listed shares, or A-shares, to all of Sugon's A-shareholders in a share swap. It will then issue A-shares to raise supporting funds, though it did not provide details about what those funds will be used for.
New York Times
26-03-2025
- Business
- New York Times
U.S. Adds Export Restrictions to More Chinese Tech Firms Over Security Concerns
The Trump administration on Tuesday added 80 companies and organizations to a list of companies that are barred from buying American technology and other exports because of national security concerns. The move, which targeted primarily Chinese firms, cracks down on companies that have been big buyers of American chips from Nvidia, Intel and AMD. It also closed loopholes that Trump administration officials have long criticized as allowing Chinese firms to continue to advance technologically despite U.S. restrictions. One company added to the list, Nettrix Information Industry, was the focus of a 2024 investigation by The New York Times that showed how some Chinese executives had bypassed U.S. restrictions aimed at cutting China off from advanced chips to make artificial intelligence. Nettrix, one of China's largest makers of computer servers that are used to produce artificial intelligence, was started by a group of former executives from Sugon, a firm that provided advanced computing to the Chinese military and built a system the government used to surveil persecuted minorities in Xinjiang. In 2019, the United States added Sugon to its 'entity list,' restricting exports over national security concerns. The Times investigation found that, six months later, the executives formed Nettrix, using Sugon's technology and inheriting some of its customers. Times reporters also found that Nettrix's owners shared a complex in eastern China with Sugon and other related companies. After Sugon was singled out and restricted by the United States, its longtime partners — Nvidia, Intel and Microsoft — quickly formed ties with Nettrix, the investigation found. Records obtained through WireScreen, a business intelligence platform, showed that Sugon and Nettrix have links to the Chinese Academy of Sciences, a vast research institution that develops chip technology, parts of which the United States has sanctioned for national security concerns. Procurement documents indicated that Nettrix had sold servers to universities that host defense laboratories and cybersecurity firms that work with the military and on China's Great Firewall, among other customers. The Trump administration added 54 companies and organizations from China to the entity list on Tuesday, as well as more than two dozen others from Iran, Pakistan, South Africa, the United Arab Emirates and Taiwan. The entities added had made contributions to Pakistani nuclear activities and its missile program, advanced China's quantum technology capabilities and hypersonic weapons development, and tried to circumvent U.S. controls on Iran, among other actions, the administration said. 'We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,' Howard Lutnick, the secretary of commerce, said in a statement. The Trump administration also expanded its penalties on Tuesday to several subsidiaries of Inspur Group, which has been a significant customer of Intel and other U.S. technology firms. The administration said those entities had aided Inspur's development of supercomputers that were used by the Chinese military, and had tried to acquire U.S. technology in support of that. The Biden administration added Inspur's parent company to the entity list in 2023, but after a brief pause, U.S. companies continued to do business with Inspur's subsidiaries. Inspur Group moved its registered address to a location about a mile away from its parent group in 2023. Trade experts have said that the impact of U.S. entity listings can be easy for companies to dodge, because the entity listing is tied to a specific name and address. Tuesday's entity listings together will affect a significant portion of the Chinese market for servers, a type of computer that is necessary to generate artificial intelligence. The Trump administration also added a special designation to its restrictions to expand the penalties globally, which will stop companies from trying to bypass U.S. rules by exporting products to the Chinese firms from countries other than the United States. The entity list was created under the Clinton administration to prevent adversaries from developing weapons of mass destruction, but presidents have wielded it increasingly aggressively over the past decade. Other groups added to the list Tuesday included the Beijing Academy of Artificial Intelligence, which the administration said were being added for trying to acquire A.I. models and chips in support of China's military modernization.
