Wuxi High-tech Zone Venture Capital Investment Group has secured RMB 2.536 billion in funding from the China Development Bank through a newly introduced policy-based financial instrument, with the capital earmarked specifically for the construction of the Hua Hong FAB9B project. This marks the first such loan of its kind in Wuxi for 2026 and represents the largest single policy-based financial tool borrowing in Jiangsu Province this year.
The new policy-based financial tool is a mechanism created by the state to support major strategic initiatives and supplement capital funding for key projects. It operates by using capital injections as leverage to expand total investment and optimize investment structures, with application and disbursement handled by state-owned policy banks. The 2026 Government Work Report has explicitly called for the issuance of RMB 800 billion in such instruments to attract greater participation from social capital.
Hua Hong's Phase III project, designated as Fab 9B, plans to establish a 12-inch specialty process wafer foundry line with a monthly capacity of 55,000 wafers. The facility will focus on power devices, analog chips, and embedded memory market segments. With a total projected investment of approximately USD 6.95 billion, equivalent to around RMB 46.8 billion, construction commenced in March 2026, with production lines expected to be completed and operational by December 2027.
The project adopts a multi-party joint funding model, and upon completion of the capital increase, the target company's registered capital will reach USD 4.17 billion. Hua Hong Semiconductor and its wholly-owned subsidiaries will contribute approximately USD 2.127 billion, holding a 51% stake. Wuxi Xihong Guoxin Phase II Investment Co., Ltd. will hold 20%, while Huaxin Dingxin, under the National Integrated Circuit Industry Investment Fund Phase III, will hold 15%. The China Development Bank's new policy-based financial instrument subsidiary will account for the remaining 14%.
Currently, Hua Hong's Wuxi base Phase I facility at Fab 7 operates at a monthly capacity of 95,000 wafers, and the Phase II site at Fab 9A produces 83,000 wafers per month, with all process equipment for the second phase fully installed by the end of June 2026. Once the third phase comes online, it will drive a significant capacity leap for the Wuxi base, adding approximately 30% to monthly output when operating at full capacity.
Upon project completion, the facility will help fill the domestic supply gap in specialty process chips and further enhance the self-sufficiency and security of China's integrated circuit industry chain. The Wuxi High-tech Zone has already established a complete industrial ecosystem covering chip design, wafer manufacturing, packaging and testing, and equipment materials. The implementation of Hua Hong's Phase III project will strengthen specialty process platform capabilities, attract upstream and downstream supporting enterprises to cluster in the region, and support Wuxi's ambition to build a globally competitive integrated circuit industry innovation hub.
Conference Information
The 9th Semiconductor Large-Silicon-Wafer Forum will take place on October 20-21, 2026 in Xi'an, hosted by ASIACHEM Consulting.
Event Background
Driven by strong demand from AI-HPC, GPUs, and HBM markets, global demand for large silicon wafers has shown clear signs of recovery. According to the latest data from ASIACHEM, worldwide semiconductor silicon wafer shipment area turned positive in 2025, and the first quarter of 2026 saw year-on-year shipment growth of approximately 13%, reaching about 3.3 billion square inches. The market is exhibiting a notable rebound, particularly in high-end 300mm advanced process wafers.
While the global silicon wafer industry remains highly concentrated, with the top five manufacturers including Shin-Etsu Chemical, Sumco, Siltronic, GlobalWafers, and SK Siltron maintaining their dominant positions, their market share is now facing increasing pressure from mainland Chinese players amid new demand cycles and regional industrial security considerations. Companies such as Eswin Material, National Silicon Industry Group, GRIKIN Semiconductor, Zing Semiconductor, Zhongxin Jinkang, Jinruihong, and TCL Zhonghuan are rapidly advancing capacity expansion and customer qualification efforts, driving continued improvement in the localization rate of 12-inch silicon wafers in mainland China.
Domestic wafer demand continues to grow at a brisk pace, and 300mm large-diameter wafers have become the mainstream choice for high-performance computing applications including advanced logic, HBM memory, and advanced packaging. The pull from emerging applications such as AI data centers, new energy vehicles, and industrial electronics is particularly pronounced. Enterprises are intensifying investment efforts, making breakthroughs in high-uniformity, low-defect single crystal growth, epitaxial and SOI wafer manufacturing, as well as high-purity electronic-grade polysilicon production, all aimed at enhancing domestic supply capabilities and global competitiveness while maintaining quality and yield standards.
Against the backdrop of rapidly expanding AI and computing power demands, understanding the evolving trends in large-size semiconductor wafer supply and demand, overcoming critical technical bottlenecks in high-uniformity 300mm crystal pulling, low-defect epitaxial and SOI manufacturing, and high-purity electronic-grade polysilicon, and further raising localization rates while maintaining stable quality have become central concerns for the entire industry chain.
The 9th Semiconductor Large-Silicon-Wafer Forum will convene in Xi'an from October 20-21, 2026. Organized by ASIACHEM, the event brings together leading silicon wafer manufacturers and related materials and equipment suppliers to discuss topics including the global and Chinese market landscape, project planning and construction progress, supply-demand and pricing trends, manufacturing technologies and key materials and equipment, as well as the latest developments in electronic-grade polysilicon and silicon materials.
Conference Reports
Comments