A compound semiconductor-on-silicon (Si) wafer with a Si nanowire buffer layer is provided, along with a corresponding fabrication method. The method forms a Si substrate. An insulator layer is formed overlying the Si substrate, with Si nanowires having exposed tips. Compound semiconductor is selectively deposited on the Si nanowire tips. A lateral epitaxial overgrowth (LEO) process grows compound semiconductor from the compound semiconductor-coated Si nanowire tips, to form a compound semiconductor layer overlying the insulator. Typically, the insulator layer overlying the Si substrate is a thermally soft insulator (TSI), silicon dioxide, or SiXNY, where X.ltoreq.3 and Y.ltoreq.4. The compound semiconductor can be GaN, GaAs, GaAlN, or SiC. In one aspect, the Si nanowire tips are carbonized, and SiC is selectively deposited overlying the carbonized Si nanowire tips, prior to the selective deposition of compound semiconductor on the Si nanowire tips.