China has begun producing its own immersion deep ultraviolet (DUV) lithography machines, according to people familiar with the matter, with the first units expected to be handed to leading domestic chipmakers this year.
The machines are planned for delivery to Semiconductor Manufacturing International Corp, Hua Hong Semiconductor and ChangXin Memory Technologies, the people said. The manufacturer itself was not identified in the reporting because of the sensitivity surrounding the program.
Market reaction was immediate: shares of ASML fell about 4.6% after the report surfaced.
Technical standing and testing
Those familiar with the effort said the domestically built immersion DUV systems remain behind ASML in both performance and reliability. The machines will need additional testing before any transition to mass production can be contemplated, leaving the Dutch supplier's operational advantages intact for the time being.
Immersion DUV tools, which transfer circuit patterns onto silicon wafers, are currently the most advanced lithography equipment available to Chinese chipmakers following limits that have restricted access to extreme ultraviolet (EUV) lithography systems.
Production cadence
Production is expected to be modest at first. The people said roughly five immersion DUV machines are planned for delivery this year, with manufacturing rising to around 20 units in 2027. Separately, China is also pursuing a domestic EUV lithography machine, but that project remains at the prototype stage.
Strategic context
Observers said the new domestic capability could ultimately offer a local alternative for critical equipment if additional restrictions are imposed, noting that the technology could become a substitute as the U.S. considers tightening controls on foreign lithography tool exports and servicing in China.
At present, however, the combination of limited initial output and the need for more validation of performance and reliability means any challenge to established suppliers will develop over time rather than immediately.