The investment further strengthens the company’s position in photonic integration pilot manufacturing and technology commercialization, while reinforcing its role in supporting the development of Shaanxi’s rapidly growing photonics industry cluster.
EO reported on July 2 that Shaanxi Photonics Pioneer Institute Technology Co., Ltd. (光电子先导院) has completed a new funding round, bringing in strategic investment from the Xi’an State-Owned Enterprise Reform Fund (西安综改基金), CDB Sci-Tech Venture Capital (国开科创), and CAS Star (中科创星).
The investment further strengthens the company’s position in photonic integration pilot manufacturing and technology commercialization while reinforcing its role as a key pillar in the development of Shaanxi’s rapidly growing photonics industry cluster.
Photonics Pioneer Institute was jointly established by the Xi’an Institute of Optics and Precision Mechanics under the Chinese Academy of Sciences (中国科学院西安光机所), the Shaanxi Provincial Department of Science and Technology (陕西省科技厅), and the Xi’an High-Tech Zone Administrative Committee (西安高新区管委会). It is among the first batch of national-level manufacturing pilot platforms designated by China’s Ministry of Industry and Information Technology.
The company has developed a “1+N” flexible engineering platform model centered on two core process platforms: a 6-inch VCSEL (vertical-cavity surface-emitting laser) platform and an 8-inch silicon photonics platform. It has also expanded into specialized process platforms including silicon lenses and Micro LED technologies. These platforms are designed to address key challenges facing the optoelectronics industry, including high production-line construction costs, limited verification capabilities, capacity constraints, and elevated market risks. By providing pilot manufacturing services, the company enables photonic-chip designers and research teams to complete chip development, prototype validation, and small-batch production at significantly lower costs while avoiding the financial burden and slower iteration cycles associated with heavy capital investment.
The proceeds from the latest funding round will primarily be used to support silicon-photonics process development, with a smaller portion allocated to VCSEL process development for optical communications and preliminary research into heterogeneous integration technologies. The investment is expected to accelerate the company’s transition from a pilot manufacturing platform into a comprehensive industrial enablement platform covering the full value chain.
The company currently operates two core pilot manufacturing platforms: a 6-inch compound optoelectronic chip platform and an 8-inch silicon-photonics platform. The 6-inch optoelectronic chip pilot line entered commercial operation in 2023 and has already provided end-to-end technical services to more than 80 customers. Meanwhile, Northwest China’s first 8-inch silicon-photonics pilot line achieved stable operations in 2025 and is actively advancing the development of active silicon-photonics process technologies, supporting the standardization and large-scale deployment of key manufacturing processes.
To date, Photonics Pioneer Institute has released more than 20 process design kits (PDKs) and served over 120 photonics companies. The company has also made early investments in heterogeneous integration technologies aimed at integrating multiple materials onto silicon substrates to overcome the performance limitations of conventional silicon-based devices.
Beyond its core pilot manufacturing services, the company has pioneered a “platform + fund” development model that combines industrial services with strategic investment to foster a sustainable innovation ecosystem. It has previously secured credit facilities from financial institutions including the China Development Bank and Shanghai Pudong Development Bank and is among the few companies in Shaanxi to receive dedicated R&D financing support from the China Development Bank.
The company’s existing shareholders include Xi’an CAS Optics Investment Holdings (西科控股), Xi’an Guangyao Pingxin Enterprise Management Partnership (光耀平芯), Xi’an High-Tech Venture Capital (西高投), and CAS Star. The latest round adds Xi’an State-Owned Enterprise Reform Fund and CDB Sci-Tech Venture Capital as new shareholders, while CAS Star further increased its investment. The expanded shareholder base reflects continued confidence from both investors and financial institutions in the long-term growth prospects of China’s photonics industry.
As China enters the first year of its 15th Five-Year Plan period, the photonics sector is benefiting from strong policy support and growing market demand. The national development blueprint highlights priorities including integrated circuits, optoelectronic integration, and integrated computing infrastructure, all of which align closely with Photonics Pioneer Institute’s core businesses in VCSEL and silicon-photonics technologies. Industry forecasts suggest that China’s photonics industry will maintain a market size exceeding one trillion yuan in 2026, supported by sustained growth across the value chain.
At the regional level, Shaanxi’s photonics industry development initiative has delivered significant results. By the end of 2025, the number of photonics companies in the province had increased from 150 to 379, while total industry output expanded from RMB 15 billion to RMB 36.5 billion. The province has established three major industrial clusters focused on photonic materials and chips, advanced laser and photonic manufacturing, and photonic sensing technologies. As a leading platform within the regional photonics ecosystem and the supporting institution behind the Photonics Technology Laboratory, Photonics Pioneer Institute has played a central role in driving industrial aggregation and upgrading.
A representative from Xi’an State-Owned Enterprise Reform Fund said the investment reflects the fund’s commitment to supporting hard-tech industries and advancing strategic emerging sectors in Xi’an and Shaanxi. As a sub-fund of a national-level investment platform, the fund plans to continue leveraging state-owned resources to help Photonics Pioneer Institute expand its pilot manufacturing capabilities, accelerate technology commercialization, and contribute to the growth of a trillion-yuan photonics industry cluster in Shaanxi.
A representative from CDB Sci-Tech Venture Capital said the investment aligns with national strategic priorities and demonstrates confidence in the company’s technological capabilities and industry leadership. The two sides plan to deepen cooperation and jointly promote the development of China’s photonics sector.
Yuan Bo (袁博), Partner at CAS Star, said photonics remains one of the most important areas in China’s hard-tech landscape, while silicon photonics and heterogeneous integration represent critical technologies for overcoming industry bottlenecks. He noted that Photonics Pioneer Institute, as one of China’s first national-level pilot manufacturing platforms dedicated to photonic integration, has established a complete commercialization pathway from research to mass production and continues to lower pilot manufacturing costs while accelerating industrial adoption of photonic technologies.
Yang Junhong (杨军红), General Manager of Photonics Pioneer Institute, said the new funding round will provide critical support for upgrading the company’s pilot manufacturing capabilities. He thanked existing shareholders for their continued support and welcomed new investors to the company. Looking ahead, the institute plans to further strengthen its integrated platform strategy spanning compound optoelectronic chips, silicon photonics, and heterogeneous integration, while focusing on key technologies including chip process development, pilot-scale validation, and advanced photonic devices to enhance the competitiveness of China’s photonics industry.