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.
