China Develops Prototype EUV Lithography Machine to Bypass US Controls

The Government of China has developed a prototype extreme ultraviolet (EUV) lithography machine at a high-security laboratory in Shenzhen, marking a significant step toward semiconductor self-sufficiency. Completed in early 2025, the project—described by insiders as a "Manhattan Project"—was executed by reverse-engineering technology from the Dutch firm ASML. The effort was supported by billions in state subsidies via the National Integrated Circuit Industry Investment Fund and coordinated by Huawei.

To bypass U.S.-led export controls, China recruited former ASML engineers using high bonuses and fake identities, while sourcing restricted components from secondary markets and older machines. While the prototype successfully generates EUV light using the laser-produced plasma method, it has not yet produced working chips. The government aims for functional chip production by 2028, though some industry sources suggest 2030 is more realistic.

ASML shares fell approximately 4.8% following the news. The company stated that while others may want to replicate its technology, doing so is "no small feat." In response, the U.S. Department of Commerce has tightened export rules and launched probes into the recruitment of former ASML employees. The breakthrough is viewed as a move to bolster China's capabilities in artificial intelligence, mobile technology, and military hardware, potentially neutralizing Western efforts to limit its advanced chip production.