LCQ2: Promoting synergistic development of innovation and technology industries between Mainland and Hong Kong
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Question:
There are views that the development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) offers extensive opportunities for the synergistic development of scientific research between the Mainland and Hong Kong. Hong Kong's strengths in frontier scientific research, professional services and its internationalised market complement the well-developed industrial chains and large-scale production capabilities of Mainland GBA cities. This creates a co-operation model of "front research, back production; front shop, back factory", thereby facilitating the development of new quality productive forces. In this connection, will the Government inform this Council:
(1) as it has been reported that the Hong Kong Microelectronics Research and Development Institute (MRDI) will complete the setup of its two pilot lines for third-generation semiconductors at the Microelectronics Centre in Yuen Long within this year and put them into operation next year, of the specific timetable for their deployment and commencement of operation; the number of staff MRDI plans to employ for these pilot lines, and among such staff, the proportion of those with backgrounds in scientific research and industry; whether there are plans to deploy additional pilot lines in the future (if so, of the key areas involved); and how the authorities will facilitate MRDI's pilot lines in functioning as a bridge between innovative research and mass production;
(2) given that applications for fund managers of the Innovation and Technology Industry-Oriented Fund (ITIF) closed on January 16 this year, of the current progress of the selection exercise for fund managers, including the expected timeframe for its completion and announcement of the results; regarding the five thematic areas under the ITIF, the timetables for setting up each sub-fund and their respective fundraising targets; in respect of ITIF's requirement that at least 25 per cent of the total fund size must be allocated within the investment period for the establishment and operation of production and manufacturing bases in Hong Kong, covering pilot production lines, testing procedures, etc, related to innovation and technology or new industrialisation-related industries, what measures the Government will adopt to ensure effective implementation of this requirement and provide solid support for advancing the development of pilot test and production platforms; and
(3) of the specific strategies and measures the authorities have in place to promote co-operation between Hong Kong and GBA in the joint development of testbeds for new technologies, accelerators and touchstones for emerging industries, to promote the efficiency enhancement of pilot test and production platforms, to strengthen and complement industrial chains, and to further unlock the synergistic advantages of "research and development in Hong Kong + transformation in GBA + going global", thereby accelerating the commercialisation and application of new technologies?
Reply:
President,
The National 15th Five-Year Plan emphasises deep integration of scientific and technological innovation with industrial innovation, and building a modern industrial system anchored by advanced manufacturing to consolidate and strengthen the foundation of the real economy. In accordance with this strategic direction, the Hong Kong Special Administrative Region (HKSAR) Government has been actively advancing relevant work across various areas.
Our reply to the question raised by the Hon Duncan Chiu is as follows:
(1) and (3) The Hong Kong Microelectronics Research and Development Institute (MRDI) is actively preparing its pilot lines for research and development (R&D) and trial production of third generation semiconductors. The installation and tuning of equipment would commence in the second quarter of this year, for commencement of operation of the pilot lines by the end of this year. The MRDI is expected to engage 80 fabrication staff with relevant industry background and R&D experience by the first quarter of 2027 to support the operation of pilot lines. The MRDI will continue to recruit personnel (including management and administrative support, R&D and fabrication staff) with an aim to orderly establishing a team of around 200 staff. Upon full commissioning of the pilot lines, the initial projection is that around 50 pilot runs would be undertaken by the MRDI annually, including R&D, concept-proofing fabrication, pilot production and low-volume production so as to assist the industry in addressing the pain points and achieving upgrade and transformation, thereby promoting technological innovation.
To implement the Co-operation Agreement on the Development of New Quality Productive Forces and the Promotion of New Industrialisation (the Co-operation Agreement) signed with the Ministry of Industry and Information Technology (MIIT), it has been proposed in the Budget to earmark about $220 million for establishing in Hong Kong the first national manufacturing innovation centre (the innovation centre) outside the Chinese Mainland. The innovation centre will be located at the Microelectronics Centre of the Yuen Long InnoPark. The aim is to facilitate breakthroughs in key technologies, advance commercialisation of technological achievements and bring together international talent. The MRDI will, by building on its existing foundation, undertake the important task of taking the lead to operate the innovation centre. We will also continue to review and introduce appropriate measures to support the R&D and technological application of the semiconductor industry.
Close economic integration of Hong Kong with the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) brings about opportunities for cross-boundary scientific collaboration, technology transfer and the development of emerging and future industries. The Government is expediting the development of the Hong Kong Park of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone (Hetao Hong Kong Park) and San Tin Technopole to promote the full integration of technological innovation and industrial innovation. The Hetao Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone (the Co-operation Zone), comprising the Hong Kong Park and the Shenzhen Park, is established under the vision of "one river, two banks" and "one zone, two parks". The Co-operation Zone is the only major co-operation zone with a dedicated focus on technological innovation in the country that spans across two social, economic, and judicial systems. The Hetao Hong Kong Park was officially opened in December 2025. The HKSAR Government is consulting closely with the Shenzhen Municipal Government and relevant central ministries, on the premise of complying with the relevant national security laws and regulations and where risks are under control, in a bid to facilitate the cross-boundary flow of innovation elements between the two parks in Shenzhen and Hong Kong, achieve synergy and improve the efficiency of pilot production for enterprises, through approaches such as "green lane" and "white list". The Government expects that through the realisation of the development vision of "one zone, two parks" in Hetao, the advantages of the combined strengths with Shenzhen and other Mainland cities in the GBA will be leveraged to bring about opportunities for cross-boundary scientific collaboration, technology transfer and the development of emerging and future industries, and build a globally competitive innovation and technology (I&T) ecosystem together.
As a natural extension of the Loop, the San Tin Technopole can integrate with the comprehensive industry supply chains in the Mainland cities of the GBA. It can also take up the transformation and industrialisation of research outcomes derived from the Hetao Hong Kong Park, creating a comprehensive industrial ecosystem. While the Loop focuses on R&D, commercialisation, and pilot production in the upstream and midstream levels, the San Tin Technopole will provide a large piece of land which can help accelerate the commercialisation of R&D results by providing industrial space for prototyping, pilot and mass production.
Moreover, the Pilot Innovation and Technology Accelerator Scheme launched by the Government in January 2026 aims to attract I&T accelerators with proven track records in and beyond Hong Kong to set up accelerator bases in Hong Kong and, through their business networks and experience, support the development and needs of I&T enterprises in a more comprehensive and targeted manner. Subsidy is provided through a matching ratio of 1 (Government): 2 (service provider), up to a ceiling of $30 million to cover the necessary expenditure for establishing and operating I&T accelerators. Eligible I&T enterprise service providers may apply by April 30.
Meanwhile, under the co-ordination of the MIIT, the HKSAR Government is exploring with the Department of Industry and Information Technology of Guangdong Province (GDDIIT) and the Industry and Information Technology Bureau of the Shenzhen Municipality (SZBIIT) the collaboration development directions for new industrialisation in the GBA during the period of 15th Five-Year Plan in order to implement the Co-operation Agreement to promote industrial collaboration. The overall direction is to jointly foster the in depth integration of technological and industrial innovation in the GBA. This facilitates both Guangdong and Hong Kong to collaborate specifically in the areas of emerging and future industries under the overall planning on new industrialisation of the national 15th Five-Year Plan, with a view to achieving complementarity, mutual benefits and industrial chain synergy to serve the country in building a modernised industrial system with advanced manufacturing as its core. We will continue to maintain close communication with the MIIT, GDDIIT and SZBIIT to take forward the relevant work with concerted efforts.
(2) The application for fund managers of the Innovation and Technology Industry-Oriented Fund (ITIF) was closed in mid-January this year. We are currently reviewing the applications received to select suitable fund managers. Shortlisted fund managers will be invited to meetings in batches, with a view to commencing the operation of the fund within this year.
The ITIF will cover five thematic areas, namely life and health technology, AI and robotics, semi-conductors and smart devices, digitalisation, upgrading and transformation, and future and sustainable development. The Government plans to set up one or more sub-funds under each thematic area and select eligible professional fund managers. They will be responsible for setting up the sub-funds and raise market capital in accordance with the fundraising requirements within 12 months upon confirmation as a qualified fund manager. The ITIF will operate in a market-oriented manner, and we will flexibly adjust the composition, number and target size of the sub-funds under the various thematic areas, taking into account the market response and development of the industries. The total amount of contribution of the Government will be capped at $10 billion, and we intend to make an average contribution of $2 billion to each thematic area. The overall target size of the sub-funds will be at least $40 billion. In other words, the capital committed by the market will be at least triple of that of the Government.
The Government would set up a Steering Committee comprising representatives from the commercial, I&T and investment sectors as well as relevant representatives of the Government to provide independent advice on matters related to the ITIF, including the establishment and management of sub-funds, investment targets, investment management and agreement framework, monitoring and review. In addition, we will put in place appropriate monitoring and review mechanisms. For example, a limited partnership agreement, which sets out the responsibilities and obligations of the fund managers, including at least 25 per cent of the fund size must be allocated within the investment period for the establishment and operation of production and manufacturing bases in Hong Kong, covering pilot production lines, testing procedures, etc, shall be signed with the fund managers. Fund managers shall also submit regular management reports to the Steering Committee and shall be subject to the monitoring of the said Committee.
Ends/Wednesday, April 22, 2026
Issued at HKT 18:30
Issued at HKT 18:30
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