Shanghai, as one of the birthplaces of China’s chip industry, is stepping up efforts in independent innovation and research to develop AI chips, said Shi Guanghui, vice-mayor of the city.

A highly concentrated research and development, design and manufacturing as well as skills foundation for smart chip development has already been formed in Shanghai. Artificial intelligence is going to be the new economic engine for China and the world as a whole, and smart chips are the key for AI technology, said Shi.

Shanghai has the nation’s most complete industrial chain of integrated circuits, and the development of this special sector is also one of the focuses for Shanghai to promote its service, manufacturing, retail and culture sectors, he said.

Shanghai Pudong New Area is home to a batch of leading Chinese chip manufacturers including Semiconductor Manufacturing International Corp (SMIC), Shanghai Huahong (Group) Co Ltd and Huada Semiconductor Co Ltd, and their products cover the mobile communications, industrial control, automotive and power sectors.

Chip manufacturing accounts for more than 60 percent of investment in chip-related industry, Xinhuanet reported.

The city generated 118 billion yuan ($17.21 billion) in integrated circuit revenue throughout 2017, up 12.2 percent year-on-year, and this is the fourth year in a row that Shanghai reported double-digit growth, according to a report from Shanghai Integrated Circuit Industry Association.