Chinese silicon wafer makers to increase capacity to satisfy domestic chip boom: report

(Image credit: HLMC)

China is building dozens of new semiconductor fabs that will come online in the next few years. To produce chips, these upcoming fabs will need silicon wafers, and to ensure a sufficient supply of those wafers, China-based companies are expanding their production capacity. DigiTimes reports that the National Silicon Industry Group (NSIG) and Wafer Works are significantly expanding their silicon wafer production in the People's Republic. 

NSIG, one of China's largest domestic silicon wafer suppliers, is leading the expansion of wafer production capacity in the country. As of June 2023, NSIG reached a monthly production capacity of 370,000 300-mm wafers, according to DigiTimes. NSIG's subsidiary, Shanghai Xinsheng Semiconductor Technology, is reportedly set to invest ¥9.1 billion ($1.28 billion) in establishing a 300-mm wafer production facility in Taiyuan, Shanxi Province. Xinsheng Semiconductor Technology is set to invest ¥7.1 billion, whereas the remaining ¥2 billion will come from local investors (likely backed by local governments). The new plant will perform 300-mm ingot growth, slicing, grinding, and polishing.  

Since its 2020 public offering, NSIG has actively raised funds to enhance its 300-mm silicon wafer production capacity, as well as research and development prowess. The company raised ¥5 billion ($704.6 million) last March to support its R&D and 300-mm wafers production.  

Wafer Works Shanghai, a joint venture between Taiwan-based Wafer Works and local investors, is also capitalizing on the growing Chinese wafer market. With production facilities in Shanghai, Yangzhou, and Zhengzhou, the company plans an investment 'of no more than ¥2.575 billion ($363 million)' of its own money to expand its capacity, according to the report. 

Additionally, Wafer Works (Shanghai) is seeking an IPO on the Shanghai Stock Exchange's STAR Market, which has already been approved (the only thing left is to finalize the date). The funds raised will be directed towards developing epitaxial 200-mm and 300-mm wafers suitable for 28nm – 65nm manufacturing processes. 

The global wafer market is expected to reach $10.9 billion by 2025. In China, the epitaxial wafer market has seen consistent growth since 2016, growing from ¥7.4 billion ($1.043 billion) in 2018 to ¥9.2 billion ($1.296 billion) in 2021, with projections to reach ¥11 billion ($1.55 billion) by 2025.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.