The merger between Sugon and Haiguang Information is a significant event in the Chinese technology industry in 2025. This case of a subsidiary merging with its parent company is far from a simple capital operation; it embodies deep industrial logic, national strategic considerations, and the developmental needs of the companies themselves. It represents a strategic positioning aimed at the global computing power competition over the next decade, marking a new phase in the self-sufficiency process of China’s digital infrastructure, transitioning from ‘single-point breakthroughs’ to ‘ecological co-defense’. Sugon has always been the largest shareholder of Haiguang Information, holding 27.96% of its shares as of the end of the first quarter of 2025, with both companies positioned at different ends of the chip industry chain. Haiguang Information focuses on chip design (CPU/DCU), while Sugon specializes in servers, storage, and computing power services. This complementary relationship naturally makes them important customers and suppliers to each other. There are many overlaps in the management and technical teams of both companies. For instance, Li Jun, a director and president of Sugon, also serves as a director of Haiguang Information; Sha Chaoqun, a director and general manager of Haiguang Information, has previously held positions as vice president of technology and senior vice president at Sugon; Xu Wenchao, the financial director of Haiguang Information, also served as the board secretary at Sugon in earlier years. In terms of technical teams, over 60% of Haiguang Information’s technical backbone participated in Sugon’s early chip research projects, and the R&D teams of both sides maintain regular technical exchanges. Given the existing understanding and trust in corporate strategy, management style, and technical culture, as well as both being part of the Chinese Academy of Sciences computing institute system, the merger aligns with the national strategy of ‘concentrating resources to tackle core technologies’. The internal and external environments are favorable, and the integration should proceed relatively smoothly. The integration has completed board review and preliminary disclosure, and is currently in the process of advancing due diligence, awaiting the shareholders’ meeting and subsequent regulatory approvals. The final completion time largely depends on the progress of regulatory approvals, with an optimistic estimate of the end of 2025, but it could also be delayed until the first half of 2026. The core reasons for the merger are: 1. The global technology competition landscape is becoming increasingly complex, and the risk of external technological restrictions always exists. Through the merger, the new entity will form a ‘giant ship’ with stronger internal circulation and higher risk resistance. In the face of external supply chain fluctuations, it can ensure the continuity and security of computing power supply for key domestic industries through its full-chain independent capabilities from chips to systems. At the same time, the merged giant can better concentrate resources to compete with international leaders such as Intel, AMD, and NVIDIA in their dominant ‘chip + server’ ecological model. 2. The merger will build a complete industrial chain closed loop of ‘chip design – server manufacturing – computing power services’. Haiguang Information focuses on the R&D of domestic high-end processors (CPU) and AI computing power processors (DCU), while Sugon is a leading enterprise in high-end computers, storage, and data center products in China. The integration of the two can optimize the industrial layout from chips to software and systems, reduce external dependencies, and enhance the independent controllability of the domestic computing power industry. 3. The merger can bring significant technological synergy effects. Sugon has a deep accumulation in high-end computing, storage, and cloud computing, and its system integration capabilities can enhance the technical and application synergy between Haiguang Information’s high-end chips and computing systems, further promoting the large-scale application of domestic chips in key industries such as government affairs, finance, communications, and energy. This will help promote the healthy development of China’s information industry and have a profound impact on shaping a mainstream universal ecological system. Conclusion: The new company is expected to create a unified domestic computing power ecosystem centered on self-developed Haiguang CPU/DCU, spanning hardware, basic software, and industry applications, thereby lowering the usage and migration thresholds for customers. The larger and more complete story of the merged public company is expected to achieve a higher valuation in the capital market, thereby feeding back into R&D and forming a virtuous cycle of ‘technological breakthroughs – market returns – R&D investment’. This concludes the article; thank you for your patience in reading. Disclaimer: This article represents personal views and does not constitute investment advice; please make independent judgments.【Welcome to follow this public account for more in-depth analysis of leading enterprises】