Company: TXG
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001770787-25-000013
Chunk: 53

Company: 10x Genomics, Inc.
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1A
Chunk 53
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 claims or penalties.

Our business in China subjects us to unique commercial, operational, competitive and regulatory risks.

25

Weakening economic conditions in China, our dependence on local distributors and other third parties to commercialize our products in China, and local competition and trade tensions between the United States and China (including recent U.S. tariffs imposed or threatened to be imposed on China and any potential retaliatory actions taken by China), among other factors, have in the past resulted, and may again result, in difficulty generating revenue for sales of our products in China. In February 2025, the United States increased tariffs on goods imported into the United States from China by 10%, and China responded by imposing a 15% tariff on coal and liquified natural gas products and a 10% tariff on crude oil, agricultural machinery and certain automobiles. If maintained, the newly announced tariffs and the potential escalation of trade disputes could directly impact our Chinese operations and sales and indirectly impact our business by restricting or otherwise adversely affecting the operations of our distributors, suppliers and other third parties. For example, in February 2025, China’s Ministry of Commerce (MOFCOM) added Illumina, Inc., the largest sequencer manufacturer, to MOFCOM’s Unreliable Entity List, potentially in response to tariffs imposed by the United States. In connection with this designation, MOFCOM may impose restrictions or prohibitions on Illumina’s China-related import or export activities, investments in China, relevant personnel or transportation entering China, work permits, stay or residence status, fines or other penalties. Our Chromium and Visium products are often utilized with Illumina sequencers by researchers conducting single cell or spatial experiments. As a result of Illumina’s designation by MOFCOM as an “unreliable entity,” it may now be difficult or impossible for certain users or potential users of our products in China to access or utilize Illumina’s products, including in connection with planned or potential Chromium or Visium experiments, and our business in China may suffer as a result. If China were to expand the Unreliable Entity List to include other life sciences companies, including 10x, our business in China, which represented approximately ten percent our total revenue in 2024, could be materially impacted or eliminated.

Additionally, we believe that in the past certain of our distributors in China held excess inventory of certain of our products, in part due to fluctuations in customer purchasing patterns in China due to COVID-19, which we believe resulted in lower than anticipated sales of our products to