Why Shanghai’s Lingang Is Building the Market for Fourth-Generation Semiconductors Before It Exists

Shanghai’s Lingang New Area is taking a long-horizon approach to fourth-generation semiconductors: build the infrastructure and industrial relationships first, then be ready when the technology and market mature. Shanghai identified fourth-generation semiconductors as a priority future industry in March 2024. Lingang launched a dedicated future-industry cluster in May 2025 and issued its first specialized cluster-construction plan in July 2026. The plan calls for at least 50 related companies and industry scale above RMB 5 billion by 2028.18

This is an early investment and engineering-validation bet, not a promise of immediate mass production. Publicly reported device results for gallium oxide, one of the field’s leading materials, only emerged in 2012. Shanghai officials have compared its development path with that of third-generation semiconductors and suggested that practical deployment could arrive after 2040.7 Lingang is therefore trying to use the waiting period to reduce the friction between laboratory research and commercial products.

A three-step policy push

Lingang’s approach has developed in three stages:

• March 2024 — setting the direction: Shanghai became one of the first regions in China to make fourth-generation semiconductors a priority future industry and began planning across materials, devices, processes and applications.28
• May 2025 — creating a home for the industry: Lingang launched the country’s first fourth-generation semiconductor future-industry cluster, turning a policy priority into a defined industrial platform.811
• July 2026 — setting measurable goals: The Fourth-Generation Semiconductor Future-Industry Cluster Construction Action Plan (2026–2028) established targets for company numbers and industrial scale, while laying out a development chain from basic research and technical breakthroughs to concept validation, pilot engineering, application demonstrations and scaled deployment.116

The plan covers two broad material families. The ultra-wide-bandgap track includes gallium oxide (Ga₂O₃), diamond and aluminum nitride (AlN). The ultra-narrow-bandgap track includes indium antimonide (InSb) and gallium antimonide (GaSb). Their potential uses include high-voltage power electronics, RF and microwave communications, deep-ultraviolet optoelectronics, infrared detection, quantum sensing and electronics for extreme environments.1

By 2026, more than 10 materials and device companies had reportedly gathered in Lingang across gallium oxide, diamond, aluminum nitride and antimonide technologies. Those companies represented more than half of Shanghai’s related businesses, according to reports.26

Why invest before the market is ready?

Lingang’s central argument is that semiconductor leadership depends on more than waiting for a material to become technically viable. Device design, manufacturing processes, equipment, supply chains and downstream applications must develop alongside it. If those capabilities are built only after demand becomes obvious, a region may already have lost the opportunity to establish an advantage.2

That is why Lingang is not presenting fourth-generation semiconductors as an immediate replacement for today’s established materials. Instead, it is building the capacity to select promising technologies, test them under engineering conditions and connect them with potential customers.

By 2028, progress may therefore be measured less by whether gallium oxide has reached mass-market adoption and more by whether Lingang has produced credible material and device samples, pilot lines, application demonstrations, commercial partnerships and a pipeline of early-stage companies and investors.17

Gallium oxide’s promise: high voltage and possible cost savings

Gallium oxide is one of Lingang’s main ultra-wide-bandgap bets. Companies in the cluster are positioning it for medium-, high- and ultra-high-voltage power devices. One Lingang-based developer has argued that silicon carbide, a leading third-generation semiconductor, may encounter voltage limitations above 3,300 volts in applications such as electric vehicles and ultra-high-voltage grids, while gallium oxide could be suited to higher-voltage uses.49

Manufacturing economics are another part of the case. Gallium oxide can be produced using liquid-phase or melt-based methods. Compared with the demanding vapor-phase processes associated with silicon carbide, these methods could create order-of-magnitude cost savings once production reaches scale.753 That remains a technology and manufacturing expectation, not a cost advantage already proven by large-scale market pricing. Crystal quality, defect control, epitaxy, device reliability and yield will all influence the speed of commercialization.

Lingang is also watching high-frequency communications, including filter components. Reports suggest that existing materials could approach physical performance limits in future high-frequency components, encouraging system manufacturers to consider new materials and device architectures.7

Diamond, aluminum nitride and antimonide materials add other potential routes to market, including high-power heat dissipation, RF systems, deep-ultraviolet optoelectronics and infrared detection. Their technology readiness levels and commercial pathways differ, however; they should not be treated as one uniform mass-production roadmap.

Turning research into products

The key infrastructure in Lingang is not a single laboratory but a connected commercialization network. The Sinan Semiconductor Super Incubator focuses on automotive-grade chips and wide-bandgap semiconductors. Its model combines research sourcing, specialist services, industrial-park resources, incubation-linked investment and follow-on incentives.3637

Its ultra-wide-bandgap semiconductor concept-validation center is designed to cover advanced-material preparation, device design, process and manufacturing verification, testing and market assessment. The aim is to evaluate both a project’s technical feasibility and its commercial potential.37

In practice, this creates a less linear route from research to business. University and research-institute teams can engage with industrial requirements while device designs and processes are still being developed, rather than waiting until a result is fully mature. Projects can then move through sample testing, pilot-production planning, application trials and commercialization assessment.537

The model also extends to early-stage finance. Lingang has tested a “grant-to-investment” mechanism, allowing some public technology support to take a form closer to equity investment. Eight pilot projects signed agreements in 2025.33 A separate Lingang Qihang Fund has been reported at RMB 500 million and is intended for seed-stage and start-up companies developing in Lingang. The available evidence describes it as a general early-stage technology fund, not a fund limited exclusively to fourth-generation semiconductors.33

A Sinan incubator case illustrates the broader “incubation plus application scenario” model. Xinjing Energy, founded by a Shanghai Jiao Tong University team, received help with capital connections, clean-room access, pilot-line development, equipment suppliers and industrial application testing. The incubator also helped connect the company with Baosteel’s hot-rolling plant for industrial waste-heat recovery validation.22 The project concerns thermoelectric chips rather than fourth-generation semiconductors, so it demonstrates Lingang’s commercialization mechanism—not proof that fourth-generation semiconductor products have already reached the market.

The real test comes by 2028

Lingang does not need to prove that every fourth-generation semiconductor can be mass-produced within two years. Its nearer-term goal is to create a dense ecosystem spanning materials, devices, processes, equipment and applications.

If the cluster reaches 50 or more companies, develops public research and pilot-validation capabilities, sustains application demonstrations and attracts successive rounds of early capital, Lingang could be better positioned to move quickly when one or more technologies clear their performance and cost barriers.15

The advantage of this strategy is that it turns the long wait for market maturity into time spent building engineering expertise, supplier relationships and customer access. The risk is that technology cycles can outlast policy cycles, leaving some materials in laboratories or small-scale validation for years.

For Lingang, the most meaningful measure of success will not be an early declaration of victory. It will be whether real testing, pilot production and customer requirements can eliminate weak routes while pushing the strongest projects toward repeatable products.