May 15, 2026 – The global semiconductor wafer industry is experiencing a period of dynamic transformation in 2026, characterized by robust year-on-year shipment growth driven by AI demand, strategic capacity adjustments in mature制程, and accelerated localization efforts across major economies, according to recent industry reports and market data.
A key report released by SEMI on April 29 showed that worldwide silicon wafer shipments rose 13.1% year-on-year to 3,275 million square inches (msi) in the first quarter of 2026, up from 2,896 msi in the same period of 2025. Sequentially, shipments declined 4.7% from the 3,437 msi recorded in Q4 2025, a trend attributed to typical seasonal fluctuations. Ginji Yada, Chairman of SEMI Silicon Manufacturers Group (SMG) and Managing Executive Officer at SUMCO Corporation, noted that demand for silicon wafers related to AI data centers remains strong, covering advanced logic, memory, and increasingly power management devices.
“Overall, silicon wafer demand has improved, but the recovery is not uniform,” Yada said. “Many device companies have reported improvements in the industrial semiconductor segment, driving a broader recovery as wafer inventory is absorbed. However, weaker smartphone and PC shipments in Q1 2026 may reflect the impact of tighter memory supply due to AI high-bandwidth memory (HBM) allocation decisions.” Silicon wafers, the fundamental substrate for most semiconductors, are produced in diameters up to 300mm and are critical to all electronic devices.
While the overall market shows positive momentum, significant shifts in capacity allocation are underway, particularly in mature wafer sizes. Industry giants TSMC and Samsung Electronics have announced plans to reduce or phase out some 8-inch (200mm) wafer production lines to focus on more cost-effective 12-inch (300mm) facilities. TSMC plans to fully cease operations at some 8-inch plants by 2027, while Samsung intends to shut down an 8-inch factory in South Korea’s Giheung complex within the year. TrendForce forecasts that global 8-inch wafer capacity will shrink by 2.4% in 2026, following a 0.3% decline in 2025.
Counterintuitively, the contraction in 8-inch capacity has led to price increases, with some foundries notifying customers of 5% to 20% hikes in 8-inch wafer manufacturing prices in 2026. The demand for 8-inch wafers remains resilient, driven by AI servers, automotive MCUs, and industrial power devices, which rely on mature processes such as 0.11μm and 0.18μm that are most cost-effective on 8-inch lines. TrendForce estimates that new PMIC shipments for AI servers alone will consume 3% to 4% of global 8-inch capacity in 2026.
In the 12-inch wafer segment, a clear divergence is emerging. Leading manufacturers are reallocating resources to advanced processes and high-margin applications, while二线 players face challenges in capacity utilization. TSMC is reportedly planning to cut 15%-20% of its 12-inch mature process capacity (40-90nm) in the coming years to focus on advanced packaging and cutting-edge nodes. Meanwhile, Chinese mainland manufacturers are accelerating 12-inch expansion: Xi’an Yicai achieved monthly 12-inch wafer production of over 850,000 units by the end of 2025, and Shanghai Hejing launched a fundraising plan to expand 12-inch substrate and epitaxial wafer production.
Localization has become a key strategic focus, particularly in China, which recently issued a directive requiring 70% of domestic 12-inch wafer supply to come from local manufacturers by the end of 2026. This move aims to reduce reliance on foreign suppliers, particularly Japan’s Shin-Etsu Chemical and SUMCO, which collectively hold 55% of the global silicon wafer market. Chinese manufacturers are investing heavily in capacity expansion and R&D, even at the cost of short-term losses, to meet the localization target.
The industry also faces ongoing technological and supply chain challenges. Advanced processes below 3nm are shifting to GAA (Gate-All-Around) architectures, requiring breakthroughs in etching and deposition technologies, while the transition to wide-bandgap materials (SiC and GaN) for power semiconductors is driving demand for specialized production facilities. Additionally, geopolitical tensions and export controls continue to reshape global supply chains, prompting manufacturers to prioritize supply chain resilience and regionalization.
Looking ahead, industry experts anticipate that AI-driven demand will continue to propel growth in advanced wafer segments, while mature processes will see further consolidation. Localization efforts and technological innovations are expected to define the industry’s trajectory in the coming years, as manufacturers balance short-term market dynamics with long-term strategic goals.