Article The Observer’s Mind Observatory
On February 4, China’s Ministry of Commerce released an announcement that shook the biomedical industry, as Illumina Inc, a leading U.S. company in gene sequencing, was officially included in the list of unreliable entities.
The wording of the announcement is harsh, as Illumina has violated the principle of normal market transactions, interrupted normal transactions with Chinese companies, and taken discriminatory measures against Chinese companies, which has seriously jeopardized the legitimate rights and interests of Chinese companies. The Working Mechanism for the List of Unreliable Entities will take appropriate measures against the above entities in accordance with relevant laws and regulations.
After a month, the boots of corresponding measures have landed on the ground.
Ingram Micro has been banned from exporting gene sequencers to China with immediate effect.
Not only Ingenics, on the same day, the Department of Commerce also put another 15 U.S. companies on the export control list, prohibiting the export of dual-use technologies to them, and ongoing related export activities should be stopped immediately.
A considerable proportion of the list was previously included in the countermeasures list of the Chinese Ministry of Foreign Affairs, and the statement of the Ministry of Commerce, which is directly responsible for the approval of the import and export of dual-use items and technologies, undoubtedly implies that the actual implementation will be further strengthened.
In a series of announcements, like a spring thunder, China’s signal couldn’t be clearer!
Yesterday’s nonsense will be paid for today.
The consequences are immediate for a public company like Inmune.
This loud spring thunder was not without warning, and the bitter fruits of Ingenics were already planted in the strategic choices made many years ago. From a technological pioneer to a political pawn, the sinking and floating of this company is not only a sad song of corporate transformation, but also a microcosm of the geopolitical game in the era of globalization.
In this war without smoke and mirrors, is a company a self-righteous manipulator or a pawn to be manipulated? The answer is more brutal than we can imagine.
Once represented the spirit of American innovation hard science and technology enterprises, how step by step themselves jumped into the geopolitical vortex?
Ingenics’ transformation from industry pioneer to industry Paraquat is a story of ambition, temptation, and the decay of the American commercial soil.
Around the turn of the millennium, the San Diego-based startup reshaped genomics with disruptive innovations in high-throughput sequencing technology that made DNA decoding efficient and cost-effective. Hospitals, universities, and pharmaceutical companies around the world were rushing to buy its equipment, and Ingenics was once the dominant player in the field.
From labs to hospitals, Ingenics changed the face of biomedicine and paid off handsomely for the founding team. However, as the first generation of entrepreneurial geeks retired, the soul of Inmena quietly deteriorated.
The entry of activist investor Carl Icahn and the takeover by a group of professional managers with impressive resumes pushed the company from technology-driven pioneers to the sweet but dangerous path of capitalization.
Stock buybacks, mergers and acquisitions, expansions, financing operations, all this financial alchemy gradually replaced cutting-edge exploration in the lab.
Ingram Micro went from being an innovator who dreamed of changing the world to the 800-pound gorilla he hated.
This transformation is not unique. Driven by both globalization and capitalization, many U.S. tech companies have followed a similar path.
With the epic rise of UW Genetics and its subsidiary, UW Smart, the environment in which Ingenium had long been accustomed to making money began to change.
In the face of increasingly fierce competition in the market, a new generation of managers did not choose to do the boring and difficult work, compared to spell R & D and cost, resort to outside the dish undoubtedly appears to be much smarter.
The arena of competition shifted from laboratories, factories, and stores to the courtroom and the backroom.
In 2019, Ingenics began to launch multiple patent lawsuits against UW, accusing the other side of stealing intellectual property. The UW side did not show any weakness to return the favor, launching patent infringement counterclaims against Ingram Micro.
In 2022, a Delaware court finally issued a shocking ruling that Ingenium had infringed on UWI’s two-color sequencing patents and needed to pay $334 million in damages. Ultimately, a settlement was reached, with UW Smart announcing that it had settled all pending litigation in the U.S. with Ingenium, which agreed to pay UW Smart $325 million in net damages.
The defeat hit Inamina in a number of ways. Financially, the $325 million in damages, while not shaking its foundations, left investors skeptical about its growth prospects. Strategically, the failure of the patent battle failed to curb UWI’s expansion, but instead left Ingena itself passive in the technology competition. Management swallowed the bitter pill and was kicked out by vulture investor Carl Icahn in the ensuing court battle.
However, the courtroom setbacks did not wake up the Indena controllers, but rather prompted them to turn to even more dangerous politicized maneuvering.
It is a matter of public record that Inmuner then dramatically increased its lobbying efforts, and after successfully testing the waters with the National Defense Authorization Act by stuffing it with its own personal cargo, Inmuner decisively hired big names from the powerful lobbying firm S 3 Group to begin lobbying on issues related to national security and genomic safety, and soon after, the U.S. Congress passed the BIOSECURE Act, which severely restricts the ability of U.S. entities to collaborate with companies such as U.S. Genetics. companies such as UW Genetics.
The long overdue victory of Ingenics ultimately proved to be nothing more than a thirst quencher.
Today, China’s Ministry of Commerce has struck back, as expected, with a decision to ban imports that will not only wipe out about seven percent of Ingenics’ revenue, but also shake the stability of its supply chain and its confidence in the marketplace.
The deeper cost is that Ingena’s short-sighted strategy has pushed it into the center of a geopolitical vortex. It had thought that politics was an extension and a tool of capital to clear the hurdles that normal business rules could not overcome. However, the risks of dancing with the wolves were far greater than they had imagined.
Ingenna is not alone in what has happened to it. The other 15 U.S. companies that the Commerce Department is countering are also mostly Silicon Valley startups, which, as MindWatch showed in its article China’s Countermeasures Hit U.S. Hard Tech in Seven Inches, are highly dependent on China’s supply chain while sparing no effort to try to be accepted by Silicon Valley’s right-wing gold-diggers and Washington’s military-industrial complex by pandering to anti-Chinese issues.
If Ingram Micro represents the evolution of American tech companies around the turn of the millennium, and its prologue was at least full of passion, sincerity, and idealism, the Silicon Valley startups that the Commerce Department is countering are already full of lies and pretense in their original story.
Dhanush Radhakrishnan, the founder of Clone Robotics, recently revealed a representative observation about how dependent U.S. hard-tech companies are on China’s supply chain.
Relying on Chinese actuators and claiming they are self-developed has been a common practice for 99 US robotics startups. These companies are often surrounded by the lure of capital and politics at the outset, choosing the shortcut of sliding down the ladder rather than the path of upward mobility.
The story of Inmana is a mirror that reflects the vulnerability and confusion of globalized companies in the geopolitical whirlwind. Reality coldly proves that in the collision of national interests, enterprises that think they are chess players are often the most fragile pieces. From patent wars to political maneuvering to the ban on the Chinese market, every step taken by Ingram Micro has left a lesson under the watchful eye of history.
The story of Ingram Micro will never be the final chapter, and more arrogant and self-righteous pawns will still be floating on the chessboard. For those players still seeking profit, the cost of the forbidden fruit is only just becoming apparent.
China’s countermeasures, for today’s U.S. manufacturing industry, is no longer a joke that can be ignored, every ban every sanction, for many Americans the cost is no longer abstract, but a real and urgent reality.
When today’s U.S. companies stare into the abyss of intertwined ideologies and interests, the temptation and cost, has become more and more need to soberly scrutinize.
Is it to continue to chase financial alchemy and lobbying magic, or to return to the roots of technology and the market?
The storm has not dissipated, the shadow is still there, and the answer, perhaps, can only be revealed in the quenching of time, in the closed factories and silent laboratories between the whispers.
Source Mindwatch
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