For years, it was assumed that China was still a long way from being able to manufacture the machines required to produce state-of-the-art processors. However, the latest news suggests that technological progress in China is advancing faster than expected. It turns out that a Chinese state-owned enterprise (Shanghai Aishengna Electronic Technology Group) has begun producing its own advanced lithography machines. Does this mark the beginning of the end of the West’s monopoly on one of the most strategic technologies?
To answer this question, we need to briefly explain what lithography is. It is a process in which extremely small patterns, which form transistors, are applied to a silicon wafer using ultraviolet light. The shorter the wavelength of the light, the more efficiently the chips can be manufactured. DUV machines operate using a wavelength of 193 nanometres. EUV machines operate at a wavelength of just 13.5 nanometres. The difference is enormous.
China has only just begun producing DUV machines. It is a complex technology, but one that can be mastered. A real hurdle, however, lies in EUV technology, where light is generated by firing microscopic tin droplets with a laser exactly 50,000 times per second in a full vacuum.
According to reports, China plans to produce around 5 DUV machines in 2026 and around 20 in 2027. By comparison, ASML delivered around 130 of these in 2025. The scale of Chinese production is therefore still modest. The Chinese machines are significantly larger, as they take up an entire floor of a hall, whilst the ASML machines are the size of lorries. Furthermore, the Chinese solution is characterised by even greater unreliability and the need to import many parts.
In the short term, therefore, the Dutch manufacturer’s position is not under threat, and the current fall in its share price appears to be more of a reaction to a change in the long-term outlook. At the same time, it is worth bearing in mind that ASML expects 20 per cent of its turnover to come from China by 2026, making it a very important market where demand for the company’s products may weaken in the coming years.
China’s development of its own DUV machine is another aspect of the ongoing deglobalisation – Beijing is seeking its own alternatives to key technologies in order to become independent of Western influence. However, a genuine breakthrough will be China’s development of its own EUV machine. It is entirely possible that there will be a surprise this time too, and that we will see the machines sooner than most people think.
