Summary of Key Points
Recently, two brain-computer interface companies invested by Chen Tianqiao, the founder of Shanda Group—Formata Technology and Naohu Technology—have successively announced the construction of “super factories” (Formata’s factory in Chengdu has already been put into use, while Naohu’s factory in Jiangxi is scheduled to begin production in the second half of this year)—accelerating their industrialization efforts. It’s important to note that brain-computer interfaces, as medical devices, must undergo lengthy clinical trials and obtain necessary certifications before they can be commercially available; currently, neither company has a product approved for market release, so mass production is still at least 2-3 years away. Behind this momentum are significant investments from capital (in the hundreds of millions of yuan) and support from local governments (through industrial funds and park development), which reflects the industry’s growing interest. However, the actual implementation of these technologies still requires time.
I. Companies Racing to Build Super Factories: Industrialization in Full Swing
Both Formata and Naohu are rapidly building factories with the aim of mass production:
- Formata: Established just six months ago, its 16,000-square-meter factory in Chengdu is already in operation and is the world’s first superfactory for ultrasonic brain-computer interfaces.
- Naohu Technology: Its 14,300-square-meter factory in Jiangxi is scheduled to start production in the second half of this year, with the goal of achieving stable delivery at the tens-of-thousands-of-unit level.
Both companies are funded by Chen Tianqiao. Peng Lei, Formata’s CEO, used to work for Naohu before leaving to co-found the new company with Chen Tianqiao, making them “brothers-in-arms” competing in the same field. The purpose of building these factories is clear: to establish production capacity so that products can be mass-produced quickly once they pass the certification process.
II. What’s Stalling Product Launches? Clinical Trials Are an Insurmountable Hurdle
Brain-computer interfaces are not ordinary consumer electronics but medical devices, requiring two major hurdles to be overcome: clinical trials to prove safety and effectiveness, followed by obtaining regulatory approvals from national health authorities. Both companies are currently stuck at this stage:
- Formata: Having been established for only six months, Formata has not yet disclosed product details or clinical trial data. It will hold a “demo day” at the end of the year to showcase prototypes and clinical results, but even with factory production, mass delivery is still 2-3 years off.
- Naohu Technology: Established five years ago, Naohu still does not have a commercially approved product and is in the process of obtaining clinical approval for its first “subdural implantable flexible brain-computer interface” (which involves inserting the device under the dura mater of the brain, offering high precision but also higher risks, thus requiring stricter approval processes).
To put it simply, just like new drugs must go through three phases of clinical trials before being released, brain-computer interfaces must prove they are safe and effective in helping patients (for example, enabling paralyzed individuals to control devices). This process can take several years or even longer.
III. Capital Investing Heavily: Belief in the Future Potential of Brain-Computer Interfaces
Both companies have received substantial funding:
- Formata: In March this year, it secured 150 million yuan in angel round financing from investors such as Guosheng Capital and Daotong Investment (both specializing in the medical sector).
- Naohu Technology: In 2022, it raised hundreds of millions of yuan in Series A financing, with backers including Shanda Group and Sequoia China.
Why are investors so keen? The potential applications for brain-computer interfaces are incredibly promising: they could help patients with amyotrophic lateral sclerosis (ALS) communicate, enable paralyzed individuals to regain control of their limbs, and treat neurological disorders such as depression. Although these technologies are not yet available, the future market is vast.
IV. Local Governments Getting Involved: Competing for Future Industrial Leadership
Both Jiangxi and Chengdu are actively supporting the brain-computer interface industry:
- Jiangxi: The Ganjiang New Area has launched a 300-million-yuan fund to support the brain-computer interface industry and has initiated the “Jiangxi Brain Valley” (an industrial park for related companies).
- Chengdu: Has included brain-computer interfaces in its future industrial development plans, establishing incubators and organizing fund-raising events to help companies secure funding and resources.
The reason for government involvement is straightforward: brain-computer interfaces represent the future of technology. The company that takes the lead in this field will gain a significant advantage in terms of technology and industry growth, driving local economic development and job creation.
V. “Brotherly Competition”? Chen Tianqiao Investing in Two Different Technological Paths
Although both Formata and Naohu are funded by Chen Tianqiao, they pursue different technical approaches:
- Formata: Focusing on “ultrasonic brain-computer interfaces” (non-invasive), which transmit signals to the brain using ultrasound, making them safer and suitable for a wider range of users (including healthy individuals).
- Naohu Technology: Developing “subdural implantable” interfaces (invasive), requiring surgical placement, offering higher precision but targeting more severe cases (such as paralysis or ALS).
In essence, Chen Tianqiao is betting on two different technological pathways: one aimed at mass market accessibility and safety, and the other at precision medicine, diversifying risks while promoting overall industry development.
Conclusion
The enthusiasm for building “super factories” in the brain-computer interface sector indicates that the industry is moving from the laboratory to commercialization. However, it’s still a long way before these technologies become widely available to the general public. The support from capital and governments is positive, but we must remain realistic: this field requires patience, as safety and effectiveness are of utmost importance. In the coming years, we will closely monitor the clinical progress of these companies, as that will determine whether they can truly achieve mass production and commercial success.