Summary of Key Points
The Lingang New Area in Shanghai has initiated a systematic development strategy for the fourth-generation semiconductors over a decade before most companies worldwide have even entered this field, which is still in the laboratory phase. By creating future industrial clusters, establishing proof-of-concept platforms, and implementing innovative funding mechanisms (such as “grant-to-investment” programs), the area aims to help transform university research findings from the lab into market-ready products. The goal is to form a preliminary industrial cluster by 2028 and seize the lead in the emerging semiconductor industry.
1. Why Did Shanghai Start Planning More Than a Decade Early? It’s Not About Blind Betting, but Creating Momentum
The development cycle for fourth-generation semiconductors is much longer than expected. It took over 30 years for third-generation semiconductors (such as silicon carbide) to move from laboratory research to widespread use in products like the Tesla Model 3. The first breakthrough for fourth-generation semiconductors (represented by gallium oxide) occurred in 2012, and under normal circumstances, their commercialization might not happen until 2040. Shanghai’s early planning is not about chasing short-term trends but about proactively creating opportunities—similar to how Tesla sparked the interest in silicon carbide. By doing so, the region hopes to attract downstream companies and social resources to accelerate the industrialization process.
2. The Game-Changer of Fourth-Generation Semiconductors: Reduced Costs and Solving Industry Challenges
The core advantages of fourth-generation semiconductors lie in their lower costs and the ability to overcome existing technological limitations:
- Cost Advantages: Gallium oxide can be produced using a “liquid-phase” method, which is simpler and less costly than the “gas-phase” process used for silicon carbide. This could significantly reduce production costs on a large scale.
- Overcoming Challenges: Current materials are approaching their physical limits in applications such as high-frequency communication filters, making it necessary to develop new materials. Additionally, fourth-generation semiconductors can convert industrial waste heat into electricity, opening up new market opportunities. In China, the annual waste of industrial heat is equivalent to the annual power generation of 100 Three Gorges Dam units.
3. How to Overcome the “Valley of Death” Between Laboratory and Market? Incubators Help Find Applications and Develop Prototypes
University research results do not necessarily translate into market-ready products, and the “valley of death” between these two stages is a major obstacle. The Sinan Incubator in Lingang has established proof-of-concept platforms to assist companies in completing the entire process from idea to market:
- For example, the thermoelectric chip developed by Hu Zhiyu’s team at Shanghai Jiao Tong University was helped to connect with Baosteel’s waste heat needs, enabling its application in energy-intensive industries like steel and cement.
- The platform also provides services such as prototype manufacturing, performance testing, and market evaluation, turning laboratory innovations into profitable products.
4. Where Does the Money Come From? Government Support and Angel Investors
Startups face significant funding challenges. Lingang has adopted two innovative approaches:
- Grant-to-Investment: The government initially provides research subsidies, and when projects are ready to be commercialized, a government-backed investment platform collaborates with external investors based on market valuations, with the original subsidy funds being reinvested. This helps companies overcome initial difficulties without wasting public money.
- Angel Funds: The Sinan Incubator manages an angel fund of 500 million yuan, providing multiple rounds of funding to reduce the risk for individual investors. Several high-tech projects have already been successful with this support.
5. A Clear Goal: Gathering 50 Companies by 2028 and Achieving a Industry Value of Over 5 Billion Yuan
Lingang’s plan is ambitious: By 2028, it aims to attract at least 50 fourth-generation semiconductor companies and achieve an industry value of over 5 billion yuan, forming a preliminary industrial cluster. Through initiatives like “Create in Shanghai,” early-stage projects such as镓 Chi Power and Xin Qing Yu Neng have been promoted to the forefront of the industry. The incubator has also identified more than 10 potential projects, with one already successfully commercialized in the first half of this year.
In summary, Shanghai Lingang’s approach is not about gambling on the future but about systematically nurturing it through strategic planning, overcoming transformation challenges, and providing adequate funding support. The goal is to gain a competitive advantage in the emerging field of fourth-generation semiconductors.