China has launched serial production of lithographs for microcircuits — without ASML

Beijing has taken a noticeable step towards technological independence: the country has launched mass production of its own immersion DUV lithography installations — equipment without which it is impossible to print modern microcircuits. So far this is not a threat to the Dutch monopolist ASML, but insurance in case of a new round of sanctions.

Secret factory in Shanghai

A source familiar with the situation told Reuters: mass production of deep ultraviolet (DUV) lithography machines has already begun, xrust wrote. Behind the production is a little-known government agency — Shanghai Aishengna Electronic Technology Group. The company is so closed that it doesn’t even have a website, and it doesn’t publicly report anything about its activities.

However, corporate documents reveal something. Aishengna was registered in August 2023 with an authorized capital of about 7 billion yuan — that's about 1 billion dollars, or over 90 billion rubles at the current exchange rate. There are only two founders, and both are state-owned: Shanghai Electric Holding and a structure affiliated with Shanghai International Trust.

The core of the team was assembled from two sources: the lithography startup Yuliangsheng, which tested a prototype of a DUV installation last year, and the Shanghai Micro Electronics Equipment (SMEE) company. A noteworthy detail: according to personnel and corporate documents, Aishengna and Yuliangsheng are registered at the same Shanghai address. Yuliangsheng, in turn, is a subsidiary of SiCarrier, an equipment manufacturer that supports Huawei.

Neither Aishengna itself, nor its shareholders, nor SMEE, nor Yuliangsheng responded to requests for comment.

How many cars and for whom

class=»notranslate»>__GTAG9__The industry publication The Information was the first to write about the development — it revealed plans for volumes: about five installations this year and about 20 in 2027. But who exactly owns the company was first found out by Reuters.

According to The Information, citing sources, the first Chinese-made machines should be received by the largest local chip manufacturers this year — Semiconductor Manufacturing International Corp (SMIC), Hua Hong Semiconductor and memory manufacturer ChangXin Memory Technologies (CXMT). None of them responded to requests for comment.

What is DUV and why is it important

Deep ultraviolet immersion lithography is not the most advanced technology (ASML EUV machines are the pinnacle of the industry), but it is extremely in demand. The essence of the method: a layer of water is placed between the projection lens and the silicon wafer, which makes it possible to print smaller circuit elements than with conventional “dry” irradiation. Such installations are used for a wide range of chips, and with the help of repeated application of patterns on them, quite advanced semiconductors can be produced.

According to a Reuters source, the Shanghai Aishengna installation still needs improvement and testing and is still noticeably inferior to competing ASML models. But if successful, Chinese manufacturers will have their own backup option — in case Western countries tighten export controls even more tightly or limit the maintenance of equipment already delivered.

Market reaction and analysts' position

The Information news dropped ASML shares by 8% on Monday. By Tuesday, by 09:06 GMT, the securities were losing another 1.6% — generally in line with the dynamics of other European chip equipment manufacturers, although worse than the overall European STOXX 600 index. In their note to investors, JPMorgan Chase analysts pointed out that releasing a few pilot immersion lithography installations is not at all the same as setting up equipment ready for full-fledged mass production, where the decisive role is played by the yield of suitable wafers, the accuracy of layer registration, productivity and stable operation when processing thousands of wafers in a row.

Context: the race for self-sufficiency

The course towards technological independence in the semiconductor industry is one of the personal priorities of Chinese President Xi Jinping, and the current event fits into this strategy. The US has already blocked China's access to ASML's most advanced EUV systems, and Dutch export controls have limited supplies and parts of advanced DUV machines.

At the same time, China itself remains a critical market for ASML: the country accounts for about 16% of the company’s net revenue for the first half of the year. Formally cut off from advanced EUV systems, Chinese manufacturers continue to actively purchase less advanced DUV installations — that is, precisely the class of equipment that they are now trying to replace on their own.

It is worth remembering the December publication of Reuters: then, citing sources, it was reported that China had managed to create a prototype of an EUV system — a tool for the production of the most advanced chips in the world. However, the serial production of such equipment is still several years away.

Sources:

1. Reuters — https://www.reuters.com/world/china/china-starts-production-home-grown-immersion-duv-chipmaking-tools-source-2026-07-28/
2. ASML Holding (official website) — https://www.asml.com
3. The Information — https://www.theinformation.com

Xrust China has launched serial production of lithographs for microcircuits — without ASML