China has begun mass production of domestically developed immersion deep‑ultraviolet lithography machines, marking a significant step in Beijing’s campaign to reduce dependence on foreign technology, Chinese media reported.

The effort is being led by Shanghai Aishengna Electronic Technology Group, a relatively unknown state‑owned company that has absorbed teams from leading Chinese lithography start-ups. This development underscores China’s determination to build a self‑sufficient semiconductor ecosystem despite Western restrictions.

The machines are crucial for advanced chipmaking and represent a breakthrough in China’s semiconductor program.

While the technology is far from rivalling Dutch supplier ASML’s models, successful deployment would provide Chinese chipmakers with an alternative source of equipment if Western governments tighten export or servicing restrictions.

The Information first reported the existence of the project, noting plans to produce about five machines this year and around twenty by 2027. Reuters has now identified Aishengna as the company behind the initiative.

Aishengna’s immersion DUV machines are expected to undergo further testing before they can match the performance of ASML’s systems. Nevertheless, deliveries are planned this year to major Chinese chipmakers including Semiconductor Manufacturing International Corp, Hua Hong Semiconductor, and ChangXin Memory Technologies. These firms are central to China’s semiconductor ambitions and would benefit from a domestic supply of lithography tools.

Immersion DUV technology uses a thin layer of water between the projection lens and the silicon wafer, enabling smaller circuit patterns than conventional dry systems. This allows production of a wide range of chips and, through multiple patterning, can be extended to manufacture more advanced semiconductors. The machines are therefore strategically important for China’s ability to sustain chip production under external pressure.

Aishengna was established in August 2023 with registered capital of seven billion yuan, backed by Shanghai Electric Holding and a subsidiary of Shanghai International Trust. The company has no public website and has disclosed little about its operations.

It has incorporated teams from Yuliangsheng, a start-up that tested a DUV prototype last year, and Shanghai Micro Electronics Equipment, both of which are deeply involved in Beijing’s semiconductor self‑sufficiency drive. Yuliangsheng is affiliated with Huawei‑backed equipment maker SiCarrier, further linking the project to China’s broader industrial strategy.

China has been barred from acquiring ASML’s most advanced extreme‑ultraviolet lithography systems, while Dutch export controls have restricted access to certain advanced DUV machines. Despite these curbs, China remains a major revenue source for ASML, accounting for about sixteen percent of its net sales in the first half of the year. Chinese chipmakers continue to procure less advanced DUV tools, but the emergence of domestic alternatives could gradually reduce reliance on foreign suppliers.

In December, reports indicated that China had succeeded in building a prototype of an EUV system, though it remains years away from production. The current DUV breakthrough is therefore a more immediate milestone.

Analysts caution, however, that producing a handful of immersion DUV tools is not equivalent to achieving high‑volume manufacturing capability. Yield, overlay, throughput, and reliability across thousands of wafer runs remain critical challenges.

The market reaction has been notable. ASML shares fell eight percent following the initial report and were down 1.6 percent at 0906 GMT, underperforming the broader pan‑European STOXX 600 index. 

While analysts believe the news is unlikely to affect ASML’s earnings trajectory in the mid‑term, the development signals China’s determination to close the technology gap.

This initiative reflects Beijing’s strategic intent to secure its semiconductor supply chain, reduce vulnerability to foreign restrictions, and build indigenous capabilities in one of the most critical areas of modern technology.

The emergence of Aishengna as a state‑backed player highlights the scale of resources being mobilised to achieve these goals, even if commercial competitiveness remains a distant prospect.

Agencies