China is aiming for more than 70% of silicon wafers used by its chipmakers to be made domestically by this year, marking one of its most aggressive efforts to localize the critical chip supply chain, Nikkei Asia has learned.
Sources said the Chinese government’s target has become an unspoken mandate among chipmakers to use locally made 12-inch wafers. While other self-sufficiency goals have fallen short, they added, this one is likely to be achieved and become a key win for China in its push to promote local self-sufficiency.
“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,” one chip industry executive with knowledge of the situation 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.”
Silicon wafers, which form the base substrate on which most logic and memory chips are produced, are an essential semiconductor material. More advanced 12-inch (300-millimeter) wafers are used for most logic and memory chips, while traditional eight-inch wafers, which China is already largely self-reliant in, are used for older generations of chips and some power electronics.
Xi’an-registered silicon wafer heavyweight Eswin Material Technology went public on the tech-heavy Shanghai Star market last October. The company said that by 2026, its combined production capacity will reach 1.2 million wafers per month, enabling it to meet 40% of China’s domestic demand for 12-inch silicon wafers, with its global market share expected to exceed 10%. Other domestic silicon wafer makers include National Silicon Industry Group, Zhonghuan Advanced, and Hangzhou Lion Microelectronics, several of which are also expanding capacity.
Eswin is currently building new facilities in the Chinese cities of Xi’an and Wuhan, where the company plans to add monthly capacity of 700,000 wafers this year, according to two sources with direct knowledge of the matter.
“All of our Chinese customers are expanding wafer capacity, and Eswin is the most aggressive one among them, possibly accounting for as much as nearly half of the total expansion,” one of the people said.
Eswin said it is already supplying many global customers, including Micron, TSMC, Globalfoundries, and United Microelectronics Corporation. It added that leading global memory chipmakers Samsung Electronics and SK Hynix, both of which have significant production footprints in China, are also verifying its products. Eswin’s revenue in 2025 rose to RMB 2.64 billion (USD 386.8 million), though it has yet to turn a profit.
China’s contract chipmaking leaders Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor, as well as top memory chipmakers CXMT and YMTC are all major customers of Eswin. Eswin said its locally made wafers have become the default for any new domestic chip plant expansions.
SMIC, Hua Hong, and some Huawei-linked chip companies are sharply increasing their capacity of advanced chips—roughly on par with seven-nanometer and even five-nanometer chips—in multiple Chinese cities to cater to the country’s appetite for artificial intelligence computing power, Nikkei Asia reported earlier. But some advanced chipmaking would still need wafers from foreign suppliers.
China was able to meet about 50% of its demand for 12-inch silicon wafers by 2025, Bernstein Research analyst David Dai estimated and that rate will continue to rise in 2026. The country’s players have been most aggressive in expanding capacity globally.
Chinese players’ global market share by capacity has jumped from only 3% in 2020 to about 28% in 2025, and is expected to grow to 32% by 2026, according to Bernstein Research. Utilization rates and production quality will impact their real output, it added.
The silicon wafer market had traditionally been dominated by Shinetsu Chemical and Sumco, both of Japan, GlobalWafers of Taiwan, and some smaller South Korean and European players. China has been catching up quickly, mainly by supplying the local market, but it could play a bigger role globally down the road.
Oversupply concerns persist due to Chinese players joining the market, but demand for silicon wafers is also rising this year, driven by the buildout of AI infrastructure and the growing need for advanced chip packaging, which requires bonding multiple wafers together and consumes more of these materials. Global silicon wafer shipments are set to increase 13% on the year in 2026 thanks to AI-driven demand, according to SEMI, a chip industry association.
Nikkei Asia earlier reported that SMIC, China’s top contract chipmaker, has asked its chip design clients to agree to use domestically produced silicon wafers in their chip manufacturing processes to help validate locally made wafers across different applications.
BOE Technology, China’s largest display maker, also has asked its suppliers of driver integrated circuits to use domestic-made silicon wafers in chip production, Nikkei Asia reported earlier. Driver ICs are used in displays and motors to enable signal communication.
Eswin did not respond to Nikkei Asia‘s request for comment.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.
Note: RMB figures are converted to USD at rates of RMB 6.82 = USD 1 based on estimates as of May 7, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.