China has started mass production of its first homegrown immersion deep-ultraviolet lithography machines, essential for making advanced chips, according to a source with knowledge of the project.
State-backed firm leads the effort
A little-known state-owned company, Shanghai Aishengna Electronic Technology Group, is leading the production after incorporating teams from leading Chinese lithography startups. The source stated the firm was established in August 2023 with registered capital of 7 billion yuan ($1.0 billion), backed by Shanghai Electric Holding and a subsidiary of Shanghai International Trust.
Aishengna does not have a public website and has disclosed little about its operations. The source said the company has incorporated teams from lithography startup Yuliangsheng, which had begun testing a DUV prototype last year, and Shanghai Micro Electronics Equipment (SMEE). Corporate records show Aishengna and Yuliangsheng share an address in Shanghai.
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Early production targets modest output
The firm plans to produce about five machines this year and roughly 20 in 2027, according to earlier reports. The first units are expected to be delivered to major Chinese chipmakers including Semiconductor Manufacturing International Corp (SMIC), Hua Hong Semiconductor, and ChangXin Memory Technologies (CXMT).
Immersion DUV machines use a layer of water between the projection lens and a silicon wafer to print smaller circuit patterns than conventional dry systems. They are used to produce a broad range of chips and can also be pushed to manufacture more advanced semiconductors through multiple patterning, which requires repeated exposures of the same layer.
The development marks progress in China’s semiconductor self-sufficiency efforts but will not immediately challenge Dutch supplier ASML. Aishengna’s DUV machine is expected to require further testing and remains far from matching ASML’s competing models, the source said.
China’s push to develop domestic lithography tools has accelerated due to export restrictions from the U.S. and the Netherlands. The U.S. has blocked China from purchasing ASML’s most advanced extreme-ultraviolet (EUV) lithography systems, while Dutch rules limit access to some DUV machines. Despite these restrictions, China remains a key market for ASML, accounting for about 16% of its net sales in the first half of the year.
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Market reaction muted
ASML’s shares fell 8% after the report but later trimmed losses, ending down 1.6% in early trading. The movement aligned with broader trends in European chip stocks rather than a direct response to the news.
ASML did not immediately respond to a request for comment. SMIC, Hua Hong, and CXMT also did not respond to inquiries.
For now, the machines will undergo additional testing before deployment. Their performance will influence China’s ability to sustain chip production amid rising geopolitical pressures.
