China Begins Domestic Production of DUV Chipmaking Tools, The Information Reports

China has begun manufacturing domestically developed immersion deep ultraviolet (DUV) lithography machines, a critical piece of semiconductor production equipment, according to a report from The Information. The development marks a potential breakthrough in the country's push for technological self-sufficiency amid escalating U.S.-led export restrictions.

Domestic Production Begins

The report, citing people familiar with the matter, states that a state-backed manufacturer has started producing the complex systems. The identity of the manufacturer was not disclosed due to the sensitivity of the project.

Leading Chinese chipmakers are expected to be the first recipients of the homegrown tools. Deliveries are reportedly slated for this year to firms including Semiconductor Manufacturing International Corp (SMIC), Hua Hong Semiconductor, and ChangXin Memory Technologies.

Market Impact and Technological Hurdles

News of the development sent shares of Dutch lithography giant ASML, the dominant global supplier of these tools, down 4.6% in trading. While the move could eventually challenge ASML's position in the Chinese market, the report indicates the company's technological lead remains secure for now.

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The domestically produced DUV systems reportedly lag behind ASML's established offerings in performance and reliability. They will require further testing before being ready for mass production, with initial output expected to be limited:

• Approximately five DUV machines are projected for this year.
• Production may increase to around 20 machines in 2027.

Context: Navigating Export Controls

Immersion DUV machines, which print circuit patterns onto silicon wafers, are the most advanced class of lithography tools currently available to Chinese foundries. Access to the next generation of technology—extreme ultraviolet (EUV) lithography systems—has been cut off by international export controls led by the United States.

This domestic production effort could provide Chinese companies with a crucial alternative as Washington considers tightening restrictions on both the export and servicing of foreign-made tools in China. The report also noted that China's parallel efforts to develop its own EUV machine remain at the prototype stage.