A seismic shift in the chipmaking landscape
China has begun manufacturing domestically developed immersion deep ultraviolet (DUV) lithography machines — a critical chipmaking tool long dominated by Dutch supplier ASML. The breakthrough, reported by The Information, could reshape the global semiconductor equipment landscape.
The machines are expected to be delivered this year to leading Chinese chipmakers, including Semiconductor Manufacturing International Corporation (SMIC), Hua Hong Semiconductor, and ChangXin Memory Technologies, according to people familiar with the matter.
Market shockwaves
ASML's shares slipped more than 7% on the news, putting the stock on track for its worst day since June 8. The report also weighed on shares of companies exposed to the global chip equipment supply chain. BE Semiconductor Industries tumbled about 8.5%, Soitec fell 5%, while Infineon Technologies dropped nearly 3%.
What this means for the industry
Immersion DUV machines, which print circuit patterns onto silicon wafers, are the most advanced lithography tools available to Chinese chipmakers after restrictions cut off access to extreme ultraviolet lithography (EUV) systems.
Key details from the report:
- The state-backed manufacturer has not been identified due to the sensitivity of the matter. - The breakthrough could eventually challenge ASML in China, but the system still lags on performance and reliability and needs further testing before mass production. - Production will be limited initially: about five DUV machines this year and roughly 20 in 2027. - China is also developing a domestic EUV machine, though it remains at the prototype stage. - The technology could give Chinese chipmakers an alternative source of critical equipment as the U.S. considers tighter restrictions on foreign lithography tool exports and servicing in China.
The bigger picture
This development represents a significant milestone in China's decades-long effort to achieve semiconductor self-sufficiency. While ASML's advantages remain intact for now — the Dutch company's high-end EUV systems are still beyond China's reach — the emergence of domestic DUV capability creates a strategic hedge for Chinese chipmakers.
The U.S. has been tightening restrictions on chipmaking equipment exports to China, and this breakthrough suggests those measures may accelerate China's push for independence rather than halt it.
