Suzhou forging photonics powerhouse amid AI uptrend

But Dang said the deeper attraction was the supply chain.

Suzhou mapped the city's photonics ecosystem, helping companies identify potential suppliers and partners. That enabled Maxphotonics to work with local chip makers on technical problems that previously depended on overseas components.

The company has since expanded into more than 60 countries and established operations in Europe and the United States, combining research capabilities elsewhere with Suzhou's manufacturing base.

It is an example of a model increasingly visible across China's advanced industries: innovation spread across regions, but anchored by dense manufacturing clusters capable of turning technology into products at scale.

Suzhou officials describe their approach to photonics with a metaphor borrowed from the industry itself: rather than flooding the sector with support, policy should work like a laser, focusing resources where they are needed.

Suzhou's photonics industry has now surpassed 430 billion yuan in scale, according to Qiao Yan, deputy head of the high-tech and industrialization at the Suzhou Municipal Science and Technology Bureau.

In July, the city released plans to accelerate the development of its"10+10" key industries, placing photonics and optical manufacturing among 10 emerging sectors it wants to cultivate.

"Suzhou will focus on building a photonics innovation cluster and strive to become a core global supporting force across chips, devices and end products," Qiao said.

The challenge is that photonics does not always fit conventional economic development models.

Research costs are high. Commercialization cycles are long. Equipment can be enormously expensive. A promising company may spend years burning cash before its technology produces significant revenue.

Suzhou New District has therefore adopted different support mechanisms depending on a company's stage of development.

Startups can receive industrial space and credit. Growing companies can access R&D support and shared technology platforms. Companies entering expansion phases can tap industrial funds and application opportunities.

The district has established infrastructure including advanced compound-semiconductor and silicon-photonics platforms, allowing smaller companies to use costly equipment without having to purchase entire production systems themselves.

In 2025, it established a 1.2-billion-yuan photonics industry fund that has invested in 10 local projects.

The support extends to people as well as companies. High-end researchers can receive assistance covering housing, children's education and research funding, aimed at allowing scientists to concentrate on technical work.

And the policies change as the technology changes.

As AI computing and silicon photonics emerged as major opportunities in 2025 and 2026, Suzhou New District updated its support measures and opened a faster research and approval channel for Everbright Photonics' high-speed optical chip projects, cutting some approval processes from months to about two weeks.

For companies moving overseas, local commerce authorities have offered support for participation in international photonics exhibitions and helped companies strengthen overseas patent portfolios.

Yet perhaps the clearest explanation of Suzhou's strategy is found not in a government document, but inside Everbright Photonics' headquarters.

A dozen companies incubated along the photonics supply chain operate in the building, sharing epitaxy, packaging and testing platforms. Three have grown into certified high-tech enterprises and two into fast-growing "gazelle" companies.

The arrangement tackles a persistent problem in advanced manufacturing: an innovation is only as strong as the weakest link in the chain around it.

A chip company needs packaging. A laser producer needs optical components. A startup needs equipment to test its technology. And all of them need customers willing to put new products into real machines.

Xu Zhuqing, a researcher at the Chinese Academy of Science and Technology for Development, said the city's growth reflects a wider acceleration in China's optoelectronics sector.

"Over the past two years, China has continuously made breakthroughs in key and core technologies in optoelectronic information," Xu said. "The explosive growth in demand for AI computing clusters is also driving the industry's overall expansion."

For China's photonics companies, the next test is whether technologies developed to reduce dependence on imports can compete beyond the domestic market.

Everbright Photonics said revenue from its industrial chips in China jumped more than 80 percent in 2025. It has also signed long-term agreements with companies in Germany and South Korea. Maxphotonics, meanwhile, is selling into more than 60 countries and regions.

For decades, Suzhou prospered by plugging itself into global supply chains, assembling electronics and manufacturing goods for companies around the world.

Now it is trying to move deeper into the technologies inside those products — the chips that transmit data, the lasers that shape materials and the manufacturing processes that determine whether lab breakthroughs can be produced by the millions.

chengyu@chinadaily.com.cn