Incubators drive Shanghai's frontier tech innovation

Shanghai's efforts to nurture incubators, which have linked startups, funds and equipment, have helped the city achieve progress in cutting-edge technologies, said experts.

The Zhangjiang High-Tech 895 Incubator in Shanghai's Pudong New Area is one of the best examples. Ever since its establishment in 2015, the incubator has nurtured over 1,600 technology companies, among which six have gone public.

According to Shi Zhan, assistant general manager of Zhangjiang Haoxin, the manager of the 895 Incubator, value-added services should be provided by incubators throughout a company's entire life cycle.

Therefore, the 895 Incubator has so far rolled out 17 entrepreneurial campaigns to look for quality projects at an early stage, provide systematic entrepreneurial training and connect companies along the industrial chain. In this way, laboratory projects can be successfully transferred into businesses, he said.

Chinese GPU maker MetaX Integrated Circuits, founded in 2020 and listed on the tech-heavy STAR Market at the Shanghai bourse in December, benefited from 895 Incubator's cultivation mechanism, according to the company's co-founder and Chief Technology Officer Peng Li, adding that the strategic investment leveraged from the incubator is crucial for startups to kick off.

Zhangjiang has now built a complete integrated circuit industrial chain covering design, packaging and testing, and power supply design companies. This can give Shanghai an upper hand amid the artificial intelligence boom, as domestic AI computing demand far exceeds supply, especially the "high-quality, general-purpose, easy-to-use, stable and reliable" computing power, according to Peng.

As China has prioritized AI infrastructure and industrial applications in the 15th Five-Year Plan (2026-30), China's AI iteration cycles will be on a fast track given the country's competitiveness in rich data, diverse application scenarios and a strong industrial chain. MetaX's orders have already stretched well into next year, she said.

Key technologies such as optical interconnects, advanced packaging, heat dissipation and power delivery are all advancing rapidly, and Zhangjiang has gathered many of China's leading innovators in these areas, Peng added.

Shen Yichen, founder and CEO of optical computing firm Lightelligence, applauded Shanghai's forward-looking deployment in frontier technologies, as well as the ecosystem connecting startups, universities and funds, which can effectively address companies' difficulties and advance the development of the entire industry.

The stress on silicon photonic chips in the 895 Incubator is a testament to Shanghai's ambition. Lightelligence shifted its center of operations from Boston in the United States to Shanghai in 2020, citing three reasons: a complete integrated circuit industry chain that can "close the loop within a five-kilometer radius", strong local manufacturing capabilities for high-volume production and Shanghai's willingness to be an early adopter of new technologies.

"Silicon photonic chips will account for more than 30 percent of chips in computing centers within five years, up from less than 3 percent at present," he said.

Optical computing chip company Lightening AGI moved into the 895 Incubator shortly after its establishment at the end of 2024. Everything the company needed — from tape-out and testing to application deployment — can be found within a few kilometers in Zhangjiang, said the company's founder Zhong Hansen, adding that such close industrial collaboration helps early-stage technology companies "avoid unnecessary detours".

Ever since June 2023, Shanghai has established 19 high-quality incubators for emerging technologies such as large language models, humanoid robots, brain-computer interfaces, synthetic biology, and cell and gene therapy. These incubators have independently established or collaborated with nearly 20 venture capital funds, with a combined scale approaching 10 billion yuan ($1.47 billion). They currently house over 410 incubating enterprises and have built up a pipeline of more than 390 projects. Professional service income now accounts for 60 percent of the incubators' total revenue.