Beijing is reducing its dependence on foreign supplies
Chinese manufacturers are expanding production of 12-inch silicon wafers, which are used in the production of advanced semiconductors and AI gas pedals, according to HARDWARE. This is a critical element of the technology chain, where China has long depended on imports from Japan, South Korea and Taiwan.
As the publication notes, leading the development of advanced silicon wafer manufacturing in China is Xi’an Eswin Material Technology, which plans to produce 1.2 million 12-inch wafers per month by 2026 – enough to meet about 40 percent of domestic demand and increase its global market share to more than 10 percent. The report notes wider expansion among players such as National Silicon Industry Group, Zhonghuan Advanced and Hangzhou Lion Microelectronics, with Eswin named as the most aggressive company, increasing production by about 700,000 wafers per month through new facilities in Xi’an and Wuhan.
The acceleration of localization is attributed to both growing domestic demand for computing power for artificial intelligence and the strengthening of U.S. export restrictions on advanced technology shipments to the PRC.
According to analysts, Beijing is gradually shifting from a strategy of large-scale electronics assembly to the formation of a full-fledged autonomous semiconductor production ecosystem – from raw materials and supplies to chip design and production.
What is changing for the global market
The growth of domestic wafer production may reduce China’s dependence on foreign suppliers and simultaneously increase competition in the global semiconductor supply chain market.
For the global industry, this means further fragmentation of technology chains and an intensification of the geo-economic confrontation between the US and China in the field of artificial intelligence and high-performance computing.
Experts note that control over the basic components of the semiconductor industry is becoming no less important than access to the AI chips and computing platforms themselves.
In the coming years, China is likely to continue large-scale investments in the localization of critical technological components, considering semiconductors as an element of national economic security.
