China Merchants Securities released a research report stating that brain-computer interface (BCI) technology boasts a wealth of downstream application scenarios, with healthcare being the primary battleground and non-medical markets holding immense potential. The industry is currently at a critical inflection point, driven by both policy and demand, accelerating its transition from a prolonged phase of academic exploration towards commercial application. A significant policy boost is anticipated domestically in 2025: BCI has been included among the "Six Major Future Industries" in the "15th Five-Year Plan," receiving systematic support from top-level design down to local policies, all aimed at vigorously promoting industrial development. The main viewpoints of China Merchants Securities are as follows:
What is a brain-computer interface, and what are its applicable scenarios? A brain-computer interface is a technology that establishes direct communication between the brain and external devices, enabling bidirectional interaction from neural signals to control commands. Its technical pathways are primarily divided into three categories: invasive, semi-invasive, and non-invasive. The report suggests that no single pathway is inherently superior; their suitability depends on the specific application scenario. The medical field prioritizes precision and stability, while consumer applications focus on effectiveness, safety, and convenience. Current technology is evolving from one-way "reading" towards closed-loop systems of "sensing-regulation-feedback," continuously pushing the boundaries of functionality.
Downstream application scenarios are diverse. Healthcare is the main battlefield, but non-medical markets possess enormous potential. Medical applications account for 56% of the market, while non-medical sectors such as consumer, industrial, and education collectively account for 44%, demonstrating strong potential for expansion. According to the Qianzhan Industry Research Institute, the global BCI market size is projected to grow from $1.98 billion in 2023 to $7.63 billion in 2029. China's market is experiencing rapid growth, increasing to 1.73 billion yuan in 2023, with its global share rising to 12.5%. Driven by policy, demand, and an innovation system, the future potential is vast.
What are the key challenges in the development of the brain-computer interface industry? The BCI industry is in a critical period of rapid development, yet multiple challenges remain unresolved. Technologically, the core challenge lies in balancing high-throughput, high signal-to-noise ratio signal acquisition with long-term biocompatibility. Simultaneously, breakthroughs are still needed in the generalization capability of decoding algorithms and the precision of adaptive regulation. Clinically, the long-term safety and efficacy of invasive products require validation through large-scale trials, and the definition of indications, surgical standardization, and post-operative management systems are not yet mature. In terms of industrialization, upstream core components (such as high-performance electrodes and specialized chips) still rely on interdisciplinary collaboration for breakthroughs. Midstream hardware and software integration and ecosystem building are in their early stages. Downstream, unclear medical payment pathways and a mismatch between user experience and genuine needs for consumer-grade products, coupled with the ongoing global exploration of regulatory and ethical frameworks, collectively constrain the industry's path to large-scale implementation.
What is the progress of brain-computer interfaces globally and in China? Driven by policy guidance and market demand, the global BCI industry ecosystem is accelerating its formation. Leading global companies, represented by Neuralink and Synchron, are advancing brain signal acquisition and interaction systems towards higher precision and lower invasiveness through innovative pathways like high-throughput flexible implants and vascular interventions. China's BCI industry has made significant progress in system integration and application deployment, forming a diverse corporate matrix within the industrial chain, represented by companies such as BrainCo (non-invasive), Borui Kang (semi-invasive), and Xinwei Medical (interventional).
A significant policy boost is anticipated domestically in 2025: BCI has been included among the "Six Major Future Industries" in the "15th Five-Year Plan," receiving systematic support from top-level design down to local policies, all aimed at vigorously promoting industrial development. Relevant investment targets include: Primary market: BrainCo, Borui Kang, Stepping Med, Xinzhida, Zhiran Medical, Jingyu Medical, Pinchi Medical, etc. Secondary market: Upstream (Medprin Regenerative Medical Technologies, Mehow Industrial); Midstream (Xinwei Medical-B, Xiangyu Medical, Aipeng Medical, Mailangde, Weisi Medical, Chengyi Tong, ResMed, Lepu Medical, Innovation Medical, Botuo Bio, Cofoe Medical); Downstream (Sanbo Brain Hospital); Others (Dowstone Technology, Leidi Ke, Lihe Chuangke, Yijiahe), etc.
Risk warnings include the risk of new product R&D failure or registration delays, the risk of intensifying market competition, and policy risks.
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