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China is pressing its chipmakers to use more domestic silicon wafers, with a reported target for local suppliers to provide 70% of wafer demand in 2026. According to Nikkei Asia, the target has become an informal mandate among Chinese chipmakers, especially for 12-inch wafers used in logic, memory and image sensor production.

China silicon wafers target raises pressure on imports

The policy push comes as Beijing tries to localise more of the semiconductor stack under the combined pressure of AI demand and export restrictions. China is already strong in 8-inch wafers for mature and power-related devices, but 12-inch (300 mm) wafers remain a more strategic segment because they support higher-volume manufacturing and advanced logic and memory devices.

The report said the local market for mature and legacy devices can now be served largely by Chinese wafers, while more demanding production still needs support from foreign market leaders. That is the practical limit of the localisation drive: replacing commodity or mature-node supply is easier than displacing established suppliers in the highest-quality 300 mm material used for advanced processes.

Eswin expands 12-inch wafer capacity

Xi’an Eswin Material Technology is central to the shift. The company is targeting 1.2 million 12-inch wafers per month by 2026, a figure that would cover about 40% of Chinese domestic demand and give Eswin a global capacity share above 10%, according to the same reporting. MERICS has also reported that Eswin’s Shanghai STAR Market IPO is intended to fund a second Xi’an wafer plant and lift monthly output from 650,000 to 1.2 million wafers.

Eswin’s existing silicon materials business provides 12-inch monocrystalline silicon polished wafers and epitaxial wafers, according to the company’s profile. Its early Xi’an project was described by the company as a strategic effort to address a weak point in China’s semiconductor supply chain, at a time when leading 12-inch wafer capacity remained concentrated outside mainland China.

Capacity expansion is no longer limited to Xi’an. Yicai reported in December that Eswin planned to spend CNY 12.5 billion, about US$ 1.8 billion, on a Wuhan facility with planned monthly capacity of 500,000 12-inch wafers. Once fully ramped, Yicai said Eswin expected total 12-inch wafer capacity to exceed 1.7 million wafers per month.

Wafers fit wider supply-chain policy

The wafer target sits alongside China’s wider effort to reduce exposure to US and allied controls on chip technology. As previously reported by eeNews Europe when the MATCH Act targeted chip tool exports to China, Washington is moving to tighten controls on semiconductor manufacturing equipment and servicing. The wafer push is on a different layer of the supply chain, but the direction is the same: less dependence on foreign chokepoints.

The timing also follows a rebound in global wafer demand. SEMI reported that worldwide silicon wafer shipments rose 13.1% year-on-year in Q1 2026 to 3,275 million square inches, driven in part by AI data centre demand for advanced logic, memory and power-management devices. eeNews Europe reported on the SEMI figures earlier this week.

For overseas suppliers such as Shin-Etsu Chemical, SUMCO, Samsung Electronics and SK hynix, the Chinese target would not remove the market entirely. But it would narrow the addressable share in a country that is still expanding wafer starts, especially for AI, memory and mature-node devices. China silicon wafers are therefore becoming both an industrial-policy tool and a commercial threat to incumbent materials suppliers.

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