Transformation and Prospects of China's Second-Hand Sequencing Instrument Market Under the Illumina Sales Ban

In February 2025, global gene sequencing giant Illumina was added to China’s "Unreliable Entity List" by the Ministry of Commerce, followed by an explicit ban on its gene sequencer exports to China on March 4. This major policy shift instantly freed up approximately ¥600 million in market space, profoundly reshaping China’s gene sequencing industry. Against the backdrop of U.S. tariff hikes on Chinese goods, the sector is undergoing a "de-foreignization" transformation, with the second-hand sequencer market—a critical link in the supply chain—exhibiting unprecedented dynamics. This article comprehensively analyzes current supply-demand shifts, innovative circulation models, technical adaptation challenges, and long-term prospects in China’s second-hand sequencing equipment market.

Fundamental Reshaping of Supply-Demand Dynamics

The Illumina ban has radically altered the underlying logic of China’s second-hand sequencer market. As the former market leader with a 54.2% share, Illumina’s sudden supply cutoff created a structural gap in high-end sequencing capacity. This reversal has turned second-hand Illumina devices from "residual value utilization" into "scarce resource competition," polarizing the market.

• High-end research-grade equipment (e.g., Illumina NovaSeq 6000 series), where domestic alternatives remain immature, became "hard currency" in the second-hand market. Buyers fall into three categories:

  1. University labs (e.g., China Agricultural University) needing to sustain critical research projects during the transition.
  2. Third-party testing service providers leveraging residual value for commercial operations.
  3. Domestic manufacturers acquiring devices for reverse engineering, often under strict confidentiality agreements. Prices for near-new units reach 70–80% of original values.

• Mid-range clinical-grade devices (e.g., NextSeq 550) face a nuanced landscape. While their performance meets most clinical needs, domestic alternatives like BGI’s MGISEQ-2000 offer comparable specs. Regional disparities emerge: rapid obsolescence in tier-1 cities and top-tier hospitals contrasts with sustained demand in budget-constrained grassroots clinics. Some buyers insist on bundled "frozen reagents" to hedge against potential supply disruptions.

• Low-throughput devices (e.g., MiSeq) are least affected, as fully substitutable domestic options (e.g., BGI’s BGISEQ-50) dominate. Prices for second-hand Illumina units here dropped 30–40%, with some dismantled for spare parts.

Innovative Circulation Models and Repricing Mechanisms

Traditional dealer models are being supplemented or replaced by diversified second-hand market ecosystems:

• Rent-to-own schemes lower entry barriers for cash-strapped small institutions, with rental fees deductible from eventual purchase costs.
• Trade-in subsidies (up to 30% of new device prices) from domestic players like BGI accelerate market fluidity.
• Equipment-sharing platforms leverage IoT to enable fractional usage rights, boosting idle asset utilization.
• Financial leasing firms offer flexible plans tied to residual value assessments and domestic substitution timelines.

Pricing mechanisms have been upended:

• The traditional 3–5-year technology cycle valuation is now secondary to "political correctness." Domestic devices (e.g., MGISEQ/DNBSEQ series) command premium resale values despite slightly inferior specs, owing to supply chain security and localized service guarantees. A new paradigm of "domestic premium, import risk discount" has emerged.
• Service network reliability reshapes valuations. Illumina’s uncertain in-country support raises risks, while BGI’s 28 technical support centers (with 4-hour response pledges) enhance second-hand device appeal.

Technical Adaptation Challenges and Long-Term Trends

The foremost technical hurdle is consumables compatibility. Illumina’s closed-system design locks users into proprietary reagents, which—though not yet banned—face supply uncertainties. Market responses include:

• Reagent stockpiling: Institutions are hoisting 2–3 years’ worth of reagents, stored at -80°C, driving prices up 15–25%.
• Compatible consumables R&D: Startups are developing workaround reagents via patent workarounds or alternative chemistries, though regulatory hurdles delay mass adoption.

Future market trajectories may include:

• K-shaped valuation divergence: High-end scarcity sustains premiums, while mid/low-end prices decline.
• Multi-criteria assessments: Supply chain resilience, data compliance, and service coverage gain weight alongside technical specs.
• Channel consolidation: Integrated platforms offering appraisal, financing, logistics, and after-sales services will dominate.
• Refurbishment boom: High-value devices may see "certified refurbished" programs, while cross-border "re-imports" of global second-hand units could emerge, pending trade policies.

Industry Chain Impact and Future Outlook

The ban’s ripple effects are spreading across the value chain:

• Upstream: Maintenance service demand surged (37% more providers in Q1 2025), with prices rising 20–30%.
• Midstream: Major service providers (e.g., Berry Genomics) are hybridizing old and new devices to balance costs.
• Downstream: Data format inconsistencies between platforms necessitate additional standardization investments.

Over the next 3–5 years, as domestic sequencing technology matures, China’s second-hand market is poised to develop a transparent, efficient circulation system. Players adept at navigating policy, technology, and demand shifts will gain a competitive edge. Ultimately, a robust second-hand market will bolster the industry’s self-sufficiency and reduce innovation costs.

Note: The Unreliable Entity List remains dynamically managed, with potential policy adjustments introducing risk premiums/discounts into transactions. Savvy investors are already eyeing "policy arbitrage" opportunities, such as acquiring second-hand Illumina units ahead of potential regulatory easing.

(Figures and citations (e.g., "2") reference original Chinese sources omitted here for brevity.)