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According to the report, reliable sources say the Chinese government's target has become an unspoken mandate among chipmakers to use locally made 12-inch wafers. "Only 30% of the market will still be open to foreign players. Some Chinese chipmakers are still aiming to produce more advanced chips, and that part of the market still requires foreign market leaders' support," a chip industry executive reportedly told Nikkei Asia. "But for the local market in mature and legacy chips, basically local Chinese silicon wafers can already meet the demand and requirements.”
Earlier this month, we reported that Huawei was on track to challenge NVIDIA in the Chinese market, buoyed by rising demand and growing pressure from Beijing for tech firms to prioritize domestic suppliers. These developments are part of a broader, coordinated push to reduce reliance on foreign players across the semiconductor stack.
You may like Huawei could seize China’s AI chip crown in 2026 as Nvidia’s H200 shipments stall in regulatory limbo China to increase leading-edge chip output by 5x in two years Nvidia market share in China falls to less than 60% Today, many of the most critical segments remain dominated by overseas companies. Samsung Electronics and SK Hynix lead the global memory market, while Intel and NVIDIA remain dominant in high-performance computing chips. Even at the materials level, the supply chain is still largely controlled abroad, with the two largest silicon wafer manufacturers — Shin-Etsu Chemical and SUMCO — both based in Japan.
Together, these companies command a significant share of the global semiconductor supply chain, underscoring the scale of China’s challenge as it seeks to build a fully localized ecosystem.
China is already largely self-reliant in producing 8-inch silicon wafers, which are typically used for older-generation chips and certain power electronics. However, competing at the cutting edge requires access to more advanced 12-inch (300 mm) wafers, which are essential for manufacturing high-performance logic and memory chips. China still depends heavily on foreign suppliers for these larger wafers. We reported late last month that the US government is preparing to further block the export of advanced AI chips to China , further intensifying the country’s push to localize its semiconductor supply chain.
According to the report, China’s push into advanced wafer manufacturing is being led by Xi'an Eswin Material Technology, which is targeting 1.2 million 12-inch wafers per month by 2026 — enough to meet about 40 percent of domestic demand and push its global share past 10 percent. The report highlights a wider expansion across players such as National Silicon Industry Group, Zhonghuan Advanced, and Hangzhou Lion Microelectronics, with Eswin described as the most aggressive, adding roughly 700,000 wafers per month through new facilities in Xi’an and Wuhan.
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Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/china-pushes-for-70-percent-homegrown-silicon-wafer-use-as-domestic-firm-ramps-up-12-inch-production-government-seeking-to-localize-critical-chip-supply-chain-amid-ai-boom-and-export-restrictions#main
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