(Yicai) March 13 -- MGI Tech, a Chinese supplier of gene-sequencing equipment, said it has seen demand surge since China put an import ban on similar products from US competitor Illumina last month.

Amid increasing trade tensions with the United States, China’s commerce ministry added Illumina to its so-called unreliable entity list on Feb. 4, citing national security concerns, and announced a ban on imports of the San Diego-based company’s gene sequencers on March 4.

MGI said this has caused supply concerns among domestic customers, so it is actively trying to step into the gap. While the Shenzhen-based company is fully committed to assessing and addressing market demand, it will take time to determine the scale of new demand, it added.

Illumina accounted for about 26.5 percent of new installations of gene-sequencing machines in China last year and generated USD310 million of revenue in the China region, which was 7 percent of its total income, with most of that coming from reagent sales, according to a research report by Guosen Securities.

In the short term, Illumina’s market share is expected to be redistributed among domestic firms, with MGI positioned as the biggest beneficiary due to its mature solutions and strong market foundation, the report said. Other Chinese sequencing companies may also gain market share as a result of the void left by Illumina.

In the short term, the market share vacated by Illumina is expected to be taken by domestic companies. MGI Tech has long been Illumina's main competitor in the Chinese market and has established mature solutions, positioning it to capture the largest share, the report said.

Reflecting this shift, Wind Information’s gene testing index climbed 15 percent last month, while MGI’s market value doubled, adding CNY17.5 billion (USD2.4 billion) to the share price.

MGI’s stock [SHA: 688114] fell 0.7 percent to close at CNY89.66 (USD12.37) in Shanghai today. It has increased in value by more than 90 percent since the end of last year.

Editor: Tom Litting