China Starts Production of Advanced DUV Lithography Machines, Source Says

A Chinese state-owned company has begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a critical technology for advanced semiconductor manufacturing, according to a person familiar with the matter. The development marks a significant milestone in China's strategic push to reduce its reliance on foreign technology and build a self-sufficient chip industry.

A New Domestic Player

The production effort is being led by Shanghai Aishengna Electronic Technology Group, a recently established state-owned firm, a source told Reuters. The company has reportedly integrated teams from prominent Chinese lithography startups, including Yuliangsheng and Shanghai Micro Electronics Equipment (SMEE), to accelerate its progress.

According to a separate report by The Information, the company aims to produce about five machines this year and approximately 20 in 2027. The first units are expected to be delivered this year to major Chinese chipmakers such as Semiconductor Manufacturing International Corp (SMIC), Hua Hong Semiconductor, and ChangXin Memory Technologies (CXMT).

Market Context and Limitations

News of the development sent shares of Dutch lithography giant ASML, which dominates the market, down by more than 8% on Monday. However, the Chinese-made tools are not seen as an immediate commercial threat. The source noted that Aishengna's DUV machine will require further testing and remains far from matching the performance of ASML's established models.

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This initiative is a direct response to escalating export controls from the U.S. and its allies, which have restricted China's access to ASML's most advanced extreme-ultraviolet (EUV) systems and some of its advanced DUV machines. A successful domestic DUV tool would provide Chinese foundries with a crucial alternative if Western governments tighten restrictions on equipment sales or servicing.

Behind Aishengna

Established in August 2023, Shanghai Aishengna Electronic Technology Group was founded with a registered capital of 7 billion yuan ($1.0 billion), according to corporate records. It is backed by two state-owned shareholders: Shanghai Electric Holding and a subsidiary of Shanghai International Trust. The company maintains a low profile, with no public website or operational disclosures.

Immersion DUV lithography uses a layer of water between the machine's lens and the silicon wafer to print finer circuit patterns than older dry systems. While not as advanced as EUV, the technology is essential for producing a wide range of modern chips and can be used to manufacture more advanced semiconductors through a process called multiple patterning.