China is pushing to source more than 70% of its chipmakers’ silicon wafers domestically this year. The move is the latest front in Beijing’s semiconductor self-sufficiency drive — one that has already seen Huawei target $12 billion in AI chip revenue on the back of surging Ascend processor orders.
Reported exclusively by Nikkei Asia, the target is announced as China’s share of global raw wafer capacity has surged from 3% in 2020 to an estimated 32% in 2026, according to Bernstein Research — a tenfold expansion that has rattled established suppliers in Japan, Taiwan, and Germany.
Domestic self-sufficiency has reached 50%, Nikkei Asia reported, with leading wafer maker Xi’an Eswin Material Technology holding roughly 7% of the global market as of 2024 and on track to exceed 10%. Eswin, led by BOE Technology Group founder Wang Dongsheng, is preparing to go public on Shanghai’s STAR Market.
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The sector has long been dominated by Japan’s Shin-Etsu Chemical and Sumco, Taiwan’s GlobalWafers, and Germany’s Siltronic. Chinese rivals are now undercutting them on price: a 6-inch silicon carbide wafer that Wolfspeed sold for $1,500 two years ago now fetches $500 from Chinese rival Guangzhou Summit Crystal Semiconductor. Wolfspeed has since laid off 20% of its workforce after its stock lost 96% of its value over three years.
On the chip side, US export controls blocking access to advanced chipmaking equipment pushed Beijing toward mature-process chips. SMIC produces Huawei’s Ascend 950PR on a 7nm process with chipmaking equipment it cannot freely replace and wafers it increasingly sources at home. Effective January 2026, Beijing added a 50% domestic tool mandate, tying subsidies to Chinese-made process equipment and funneling more orders to local suppliers.
China expects to surpass both South Korea and Taiwan as the world’s largest source of integrated circuit wafer capacity this year. Its longer-term roadmap targets 80% chip self-sufficiency by 2030, with fully domestic 7nm production lines and stable output at 14nm — the same nodes SMIC runs today.
Domestic models, domestic chips, domestic wafers. “We expect many Chinese players as well as foreign players will get hurt,” an anonymous sales director at a German chipmaker told Nikkei Asia. “Many of them already have, and eventually many will have to exit these bloody games.”
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