According to a recent analysis, the anticipated price hikes for silicon wafers have now taken effect, with further increases expected both domestically and internationally in the second half of the year. From an industry trend perspective, a clear shortage is evident for heavily doped wafers and overseas lightly doped wafers, while domestic lightly doped wafers are poised to benefit from spillover overseas orders. The industry may enter a state of global supply shortage over the next two years. The analysis highlights a preference for wafer companies with a relatively high proportion of heavily doped wafer products and suggests monitoring other wafer companies leading in shipments of 12-inch lightly doped wafers.
Price Increases Take Effect, Further Rises Anticipated
Driven by AI demand, the semiconductor wafer industry is entering an upward cycle. The volume growth narrative emerged in 2025, followed by the price increase narrative materializing in Q2 2026. Reports indicate that in May 2026, the Chairman of GlobalWafers stated the company was actively communicating with customers about raising prices in the second half of the year. In June 2026, Lion Microelectronics issued a price adjustment notice, increasing wafer prices by 10% to 15% effective July 1st. On one hand, it is anticipated that the relatively tight supply of heavily doped wafers will support continued price increases in the second half. On the other hand, it is expected that relevant companies may adjust their long-term agreement prices upward for the next year around September-October.
Sustained High Demand and Tight Supply for 12-inch Heavily Doped Wafers
Benefiting from the structural shift in power device production from 6-8 inch to 12-inch wafers, the demand growth for 12-inch heavily doped wafers is projected to significantly outpace the overall wafer industry in the coming years. Based on tracking downstream 12-inch power device production line deployments, global monthly demand for 12-inch heavily doped wafers is estimated to reach 400k/500k/620k/760k from 2025 to 2028, representing an annualized growth rate of 20%-30%. In 2025, overseas and mainland China 12-inch heavily doped wafer capacity each stood at over 200k wafers per month, indicating a relatively balanced supply-demand situation. The heavily doped wafer sector is characterized by a more favorable competitive landscape, high customization, and strong customer stickiness, leading to more conservative capacity expansion compared to lightly doped wafers. Even under a scenario where overseas capacity grows by 50% and mainland China capacity doubles by 2028, global capacity is projected to reach over 750k wafers per month. The industry is expected to remain in a state of tight supply.
Overseas Lightly Doped Wafers: Major Players Slow Expansion, Tight Supply Trend Clear
Among the five major overseas wafer manufacturers, only GlobalWafers currently has large-scale expansion plans. Considering that overseas capacity construction and new fab qualification cycles exceed two years, incremental overseas capacity is expected to be limited before 2028. As mainland China wafer manufacturers have limited capability to supply prime wafers to overseas fabs, capacity utilization for the top five overseas players can be estimated under the assumption that all overseas prime wafer demand is met by overseas capacity. Since these players also produce test wafers, their actual capacity utilization is theoretically higher than these estimates. Consequently, it is judged that the overseas wafer market will enter a comprehensive state of supply shortage in 2027-2028, indicating a clear industry trend.
Mainland China Lightly Doped Wafers: Aggressive Expansion Fuels Import Substitution
Mainland China's 12-inch lightly doped wafer manufacturers possessed over 2.4 million wafers per month of 12-inch wafer capacity by the end of 2025 and are expected to achieve their planned capacity of 4.3 million wafers per month within the next two years. The outlook is positive for an accelerated increase in the domestic substitution rate for 12-inch lightly doped wafers. Furthermore, as overseas supply tightens, some overseas orders for polishing wafers used in memory and test wafers for advanced processes are expected to flow into the domestic market.
Key Risk Factors
Risks include significant fluctuations in raw material prices, technological R&D risks, intensifying industry competition, cyclical fluctuations in the semiconductor industry, and silicon wafer price increases falling short of expectations.
Investment Strategy
The analysis recommends focusing on wafer companies with a relatively high proportion of heavily doped wafer products. It also advises monitoring other wafer companies that are leaders in shipments of 12-inch lightly doped wafers.
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