Illumina plans US $100 million cost reduction amid China’s import ban

USA – Illumina, a leading company in genetic sequencing, is adjusting its financial expectations for 2025 following China’s recent decision to ban the import of its gene-sequencing machines.

The company now anticipates an adjusted profit of US $4.50 per share, a slight decrease from the earlier forecast of US $4.50 to US $4.65.

To mitigate the anticipated revenue decline from its Greater China operations, Illumina plans to reduce spending by US $100 million.

The Chinese market accounts for approximately 7% of Illumina’s total sales, contributing US $308 million in 2024.

The import ban is part of escalating trade tensions, with China responding to U.S. tariffs by targeting specific American companies.

China announced a ban on imports of genetic sequencers from Illumina that took effect from March 4, just minutes after U.S. President Donald Trump’s additional 10% tariff on Chinese goods took effect.

In addition to the import ban, China imposed a 15% tariff on certain U.S. goods and listed 15 U.S. firms on its export control list, adding 10 more to its unreliable entity list.

Despite these challenges, Illumina remains committed to supporting its Chinese customers. The company is exploring strategies such as manufacturing in China and implementing cost-cutting measures to mitigate the impact of the export ban.

Illumina is also engaging in discussions with both U.S. and Chinese governments to navigate the ongoing trade disputes.

In response to the import ban, Illumina’s stock experienced a decline, dropping by 3.6% to US $81.16.

The company’s revenue from China has been decreasing over recent years, partly due to competition from local firms like BGI Genomics and MGI Tech, whose stocks have surged following the ban.

Illumina also faces challenges from reduced U.S. federal research funding. Nonetheless, analysts maintain an optimistic outlook, noting that Illumina is exploring manufacturing in China and cost-cutting measures to mitigate the impact of the export ban.