China has begun producing its own immersion DUV lithography machines. ASML has traditionally manufactured these machines. The first systems will be delivered this year to SMIC, Hua Hong, and CXMT. ASML’s stock price dropped by more than 7 percent following the news.
According to sources at The Information, a state-backed manufacturer has built the first domestically produced immersion DUV machines. These tools print circuit patterns on silicon wafers and represent the most advanced alternative for Chinese chipmakers after export restrictions cut off access to EUV systems.
The manufacturer’s name remained undisclosed due to the sensitivity of the matter. However, production is limited for the time being. It involves approximately five machines this year and about twenty in 2027. According to the sources, the system still lags behind in performance and reliability and requires additional testing before mass production is possible. For now, therefore, ASML’s competitive advantages remain intact.
The market reaction was sharp. ASML’s stock fell by more than 7 percent, marking its worst day since June 8. Suppliers also felt the impact. BE Semiconductor Industries lost about 8.5 percent, Soitec 5 percent, and Infineon Technologies nearly 3 percent.
Still, the gap with ASML remains significant. The Dutch manufacturer delivers hundreds of immersion DUV systems worldwide each year. The planned five to twenty Chinese machines pale in comparison.
Restrictions drove China to start its own production
The Dutch government restricted the export of the most advanced DUV immersion machines to China. Later, under pressure from the U.S., ASML also canceled previously licensed deliveries of specific DUV systems.
A bill has now been introduced in the U.S. that goes even further. The so-called MATCH Act aims to halt the sale and servicing of DUV machines to China, explicitly targeting SMIC, Hua Hong, and CXMT. Domestic machines offer Chinese manufacturers an alternative to critical equipment, as Washington considers stricter rules.
China is also developing its own EUV machine, though it is still in the prototype stage. Stabilizing a new immersion DUV tool for high-yield production typically takes a year or longer, even after initial testing. Widespread commercial use is therefore not expected until around 2027.