China Galaxy Securities has released a research report indicating that China's nuclear fusion industry is experiencing vigorous growth, marked by significant progress in key project tenders and construction, technological breakthroughs, corporate financing, and policy support. By 2026, the core variable for the domestic fusion industry is expected to be the advancement of demonstration reactors. The nuclear fusion industry chain primarily consists of upstream materials, midstream components such as superconducting magnets and first-wall related structures, vacuum modules, and downstream power plant operations. The main viewpoints of the report are as follows.
Domestic nuclear fusion industry development is flourishing, with notable achievements in critical project bidding, technological innovations, corporate fundraising, and governmental backing. The 2026 Fusion Energy Technology and Industry Conference was held in Hefei, where the inaugural 1 billion yuan "Hefei Future Fusion Energy Venture Capital Fund" was launched, and contracts for 10 major nuclear fusion procurement projects were signed. In October 2025, the first key component, the cryostat base, for the Fusion New Energy BEST project was successfully installed, accompanied by the announcement of procurement tenders exceeding 2 billion yuan. By 2026, the construction of the "China Circulation-4 (HL-4)" is expected to commence, and the Jiangxi "Spark-1" project is anticipated to enter the formal engineering construction phase.
In March 2025, the "China Circulation-3 (HL-3)" achieved dual hundred-million-degree operation for the first time. In January 2026, the EAST facility confirmed the existence of a density-free zone for the first time, while the "Primordial 70" achieved a steady-state long-pulse operation lasting 1,337 seconds. Regarding financing, Shanghai Superconductor's IPO application was accepted by the Shanghai Stock Exchange in June 2025. In 2026, Star Fusion completed a 1 billion yuan Series A financing round, and companies like Nova Fusion and Zhongke Qingneng secured substantial funding, indicating accelerated entry of diverse capital into the sector.
Policy support has been robust. In October 2025, recommendations for the 15th Five-Year Plan explicitly listed nuclear fusion as a new economic growth point. In March 2026, the "Two Major Projects" initiative allocated over 170 billion yuan in ultra-long-term special treasury bonds to promote projects such as the upgrade of fully superconducting tokamak nuclear fusion experimental devices. The Hefei BEST project initiated large-scale tendering in 2025, concurrently entering its design phase. In June 2025, the CFETR was officially renamed the China Fusion Engineering Demonstration Reactor (CFEDR), upgrading its designation from an engineering test reactor to an engineering demonstration reactor. The progress of these demonstration reactors is projected to be the central focus for the domestic fusion industry in 2026.
Internationally, nuclear fusion research has achieved breakthrough progress. Major countries are increasing policy support, funding scales continue to expand, and the global commercialization process for nuclear fusion is accelerating. In January 2026, US-based CFS completed the installation of the first magnet for its SPARC project and announced a 200MW power supply agreement with Google. In February, Helion heated plasma to 150 million degrees Celsius. Regarding policy, the UK committed over £2.5 billion in June 2025 to advance the STEP plant construction; the US Department of Energy allocated more than $134 million to support fusion research in September; and in January 2026, Germany announced a 2 billion euro special funding program, while South Korea increased its fusion R&D budget to 112.4 billion won.
In corporate financing, TMTG and TAE reached a merger agreement exceeding $6 billion in June 2025, aiming to create the world's first publicly listed nuclear fusion company. In August, CFS secured a new funding round of $863 million, bringing its cumulative financing to nearly $3 billion. By January 2026, companies like Type One Energy received substantial investments, indicating a continued expansion of global funding for fusion enterprises.
Controlled nuclear fusion is a crucial pathway to addressing global energy challenges. Its industry chain is extensive and technology-intensive, covering upstream raw material supply, midstream equipment manufacturing and R&D, and downstream application services. Controlled nuclear fusion is a thermonuclear reaction; achieving ignition requires meeting the Lawson criterion, and commercial application demands a fusion energy gain factor Q greater than 30. Primary approaches include magnetic confinement, inertial confinement, and gravitational confinement, with magnetic confinement, particularly using tokamak devices, being the most developed effective method currently. The upstream sector involves land, equipment construction, nuclear materials, and structural materials. The midstream sector focuses on the R&D and manufacturing of key equipment such as vacuum systems and superconducting magnets. The downstream sector primarily involves the operation of fusion power plants and related equipment applications. Fusion power generation offers advantages like continuous, stable output and near-zero greenhouse gas emissions.
Risk factors include the potential for controlled nuclear fusion technology and industrialization progress to fall short of expectations; adverse impacts on the nuclear power industry from global nuclear safety incidents; calculation deviations resulting from report assumptions; and the risk of key companies failing to meet expected financing timelines.
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