Future bodes well for new materials producers in Shanghai

Foreign companies in the new materials industry see huge opportunities in Shanghai as development requires more advanced product, as indicated by the city's 14th Five-Year Plan (2021-2025) on Advanced Manufacturing issued on July 14.

It said the total output value of the new materials industry in Shanghai will reach about 320 billion yuan (US$49.5 billion) by 2025, compared with 266.3 billion yuan in 2020.

Integrated circuits, bio-medicine and artificial intelligence (AI) will be the city's three major leading industries over the next five years.

Another six key industries will be strengthened, namely new-energy vehicles, high-end equipment manufacturing, aerospace, information and communication technologies, new advanced materials and emerging digital industry.

"I see great opportunities in Shanghai as people here attach great importance to quality development," said Li Lei, vice president and regional head, North Asia, SABIC. "As a leading chemical company globally, SABIC supports its customers by identifying and developing opportunities in key end-use applications such as construction, medical devices, packaging, agri-nutrients, electrical and electronics, transportation and clean energy."

Ti Gong

SABIC is a global diversified chemicals company, headquartered in Riyadh, Saudi Arabia. It manufactures on a global scale in the Americas, Europe, Middle East and Asia Pacific, making distinctly different kinds of products: chemicals, commodity and high-performance plastics, agri-nutrients and metals.

"Now people have higher requirements for the quality of life, which have to be supported by products, such as computers, the Internet, telecommunication equipment, artificial intelligence equipment, etc., and chemical materials play a vital role in their production process," Li added.

The advanced manufacturing sector, notably the chemicals industry which SABIC sits in, has the capabilities to effectively support Shanghai's vision through various innovative solutions, ranging from "hard" necessities in urbanization and healthcare, AI-based smart transportation such as self-driving and flying cars and next-generation high-speed railways, to the way people communicate and engage instantly, which is enabled by emerging technologies such as 5G, smart phones and portable devices.

Take 5G communications as an example, SABIC's specialty thermoplastics and oligomers offer new and creative solutions for a wide range of 5G application challenges, helping ensure the reliable performance of parts under higher frequencies and heavier data loads.

"For the materials industry, the future opportunities lie in high-quality industries like smart manufacturing and artificial intelligence, smart city, new-energy vehicles, and semiconductors, etc., while Shanghai is determined to be a leader in such industries," Li added.

In the eyes of Li, Shanghai is not only a city that makes decisions, but also a city that gets things done.

"When we set up our technology center and main operations in Kangqiao, a subdistrict of Pudong New Area, there was no subway nearby. A short time later, the government kept its pledge and built a new subway station. Some other supporting facilities are also improving," Li said.

Li is very optimistic about the Chinese market, citing a McKinsey report that over the coming decade, China will provide over half of the global chemical industry's growth, and 60 percent of new investment opportunities in global chemicals will occur in China.

"Since our entry into the Chinese market in the 1980s, we have been participating in China's higher-quality development through our differentiated material solutions across key industries and have consistently been expanding our investment in China. In addition to our existing plants in Shanghai, Guangzhou and Chongqing, as well as a technology center in Shanghai, we are also working closely with Sinopec to expand our existing joint-venture Sinopec SABIC Tianjin Petrochemical Co Ltd (SSTPC), building a 260,000 tons/year polycarbonate plant in Tianjin," Li added.

For Allan Gabor, president of Merck China and managing director of Merck Electronics China, Shanghai's stress on high quality innovation and development also brings his company tremendous opportunities.

Ti Gong

"Our recent investments in Shanghai have demonstrated our strong confidence in Shanghai and we look forward to continuous support from local governments and partners," Gabor said.

Last year at CIIE (China International Import Expo), Merck announced a new strategic investment of 140 million yuan (US$21.61 million) for the Electronics Technology Center China (ETCC) in Shanghai. It will host cutting-edge equipment and capabilities for analytics, application testing and sampling for a wide range of semiconductors and display materials. The opening of this high-tech electronic materials lab is now planned for the summer of 2022.

In the past 10 years, the German science and technology company has invested almost 1 billion yuan in China's electronics industry and China is now one of its major global innovation centers and growth engines.

"Shanghai is like an old friend of Merck and our friendship dates back to 88 years ago. Merck's electronics business in China is headquartered in Shanghai because our customers are very close by in the region. In Shanghai, we can have access to top talent and get embedded into the dynamic of the local innovation ecosystem," Gabor said.

"Shanghai has been pioneering in some emerging high-tech areas like artificial intelligence, bio-electronics, semiconductor manufacturing and future displays, and all these are where Merck comes into play," Gabor added.

Merck's electronics business provides a wide range of semiconductor and display materials for data-driven industries like artificial intelligence, 5G, the Internet of Things and AR/VR in an increasingly digitalized world.

The materials industry upstream of the industry chain provides advanced materials to all those strategic industries and makes it possible for these relatively downstream industries to constantly make breakthroughs.

"For example, the current development of the artificial intelligence industry is achieved by efforts made along the whole industrial chain," Gabor said.

For him, the development and evolution of artificial intelligence will be driven by data and material innovation at the atomic level, in addition to the stronger integration of various technologies, especially the technological convergence of display and semiconductor in the electronics industry.

Like other digital trends, the evolution of artificial intelligence revolves around data generation, transmission, processing, storage, and ultimately the way it is used by people. Emerging technologies like 5G, Internet of Things or automatic driving, all need a lot of data for support.

And they require more chips with advanced semiconductors and thus drive the surging need for innovative materials.

"The material innovation at the atomic level is the key to developing more powerful chips and designing new computer architecture. Materials science will play an increasingly critical role in driving the technological revolution ahead," Gabor said.

At present, the total annual output value of Shanghai's new materials industry accounts for nearly a quarter of the total output value of the city's strategic emerging industries. The size of the industry is only second to the new generation of the information technology industry.

Last year Shanghai's new materials industry kept growing fast, despite the impact of the pandemic. In 2020, the industrial output value of Shanghai's new materials industry was 266.3 billion yuan, up 10.8 percent year on year.

In 2020, 111 materials projects were attracted to Shanghai, with an investment of nearly 80 billion yuan. Sinopec Shanghai Petrochemical Co Ltd's large-tow carbon fiber project and Baosteel's non-oriented silicon steel project started construction in 2020 as scheduled.

Meanwhile, Shanghai set up three specialized industrial parks focusing on new materials, with an area of 19 square kilometers.

The Carbon Valley Green Bay Industrial Park in Jinshan District is positioned as an area for carbon fiber and composite materials, focusing on carbon fiber parts, key equipment, key additives, analysis and testing. It strives to become a national exemplary town for the carbon fiber industry by enhancing the related industry chain.

Fengxian New Material Industrial Park is positioned to develop advanced materials for electronics. It has the advantages of being linked to the Shanghai Chemical Industry Park's industry chain. It aims to make breakthroughs in the bottlenecks of integrated circuit materials and to support the development of the integrated circuit manufacturing industry.

The Super Science and Innovation Park in Baoshan District, the closest to downtown Shanghai of all the city-level industrial parks, focuses on the research and development and transformation of cutting-edge new materials.