Semiconductor suppliers have found life beyond expensive AI processors, with global silicon wafer shipments up 13.4 per cent.
According to SEMI’s quarterly wafer shipment report and its 2026–2029 silicon wafer forecast wafer manufacturers shipped 3,756 million square inches of silicon during the third quarter of 2026, compared with 3,313 million during the same period last year.
The figures were five per cent higher than the previous quarter, when shipments reached 3,573 million square inches. That suggests chipmakers are increasing their purchases of the raw material used to manufacture most semiconductors.
The rise is particularly encouraging because demand appears to be spreading beyond the handful of companies spending fortunes on enormous AI data centres.
SEMI’s Silicon Manufacturers Group chairman Masatsugu Miura, who works for Japanese wafer maker SUMCO, said demand for advanced logic and memory remained strong, but other parts of the industry were beginning to recover.
Power devices, photonics and industrial semiconductors are attracting more business, helped by investment in robotics, server power supplies and conventional industrial equipment. While the technology industry has spent much of 2026 acting as though every semiconductor must be destined for an AI server, companies are still making chips for ordinary machines.
Industrial customers have been slower to recover from the inventory problems that followed the pandemic-era semiconductor boom. Many spent the subsequent years working through components purchased when shortages convinced everyone to order more than they needed. The latest figures suggest some of those customers are beginning to place fresh orders.
Miura said demand for 300mm polished wafers was being supported by bonding and advanced packaging applications. These processes allow manufacturers to combine different chips and components into more complex packages, an increasingly important part of advanced semiconductor production.
Demand for silicon in power management and photonic devices is growing, reflecting the electricity and communication bandwidth required by modern data centres.
Semiconductor manufacturers are finding that selling processors is only part of the business. Someone must supply the devices that deliver power, manage connections and keep the entire contraption operating without turning the local electricity grid into a smoking ruin.
The wafer figures cover the silicon material shipped to semiconductor manufacturers, measured by surface area. They do not reveal how many finished chips were produced, since different manufacturing processes can yield very different numbers of devices from the same quantity of silicon.
The figures are nevertheless a useful indication of manufacturing activity because chipmakers cannot increase production indefinitely without purchasing more wafers.
SEMI expects the recovery to continue throughout the remainder of 2026. In a separate forecast published on 21 October, the organisation predicted that annual silicon wafer shipments would increase 11.8 per cent to 14,420 million square inches.
That would put the industry on course for further expansion, with SEMI predicting successive annual shipment records between 2027 and 2029.
The organisation expects shipments to reach 17,034 million square inches by 2029, supported by demand for advanced processors, memory and improving production of chips made using older manufacturing technologies.
Those older processes remain important for automotive, industrial and power-management semiconductors, where manufacturing costs and proven reliability often matter more than squeezing another few billion transistors onto a piece of silicon.
SEMI’s annual forecast covers polished and epitaxial silicon wafers supplied to semiconductor manufacturers. The figures exclude reclaimed and unpolished wafers.
