China has begun producing its own DUV immersion lithography machines, according to a report by The Information, as described by Reuters. The first machines are set to be delivered to SMIC, Hua Hong Semiconductor and ChangXin Memory Technologies before the end of 2026. The scale will be small initially: around five machines this year and around 20 in 2027. The state-backed manufacturer has not been disclosed. The systems are still expected to lag behind ASML’s solutions in terms of performance and reliability and require further testing.
DUV is used to pattern circuits onto silicon wafers. It is less advanced than EUV, but thanks to multiple exposure cycles, it allows for the production of relatively modern chips. This is of strategic importance to China, as access to ASML’s EUV systems has been restricted since 2019, and exports of the most advanced DUV equipment are subject to licensing.
For the time being, this does not pose a direct threat to ASML’s global position. The Dutch company plans to have a production capacity of around 130 immersion DUV systems by 2026 and has raised its annual revenue forecast to €43–45 billion, pointing to strong demand linked to the development of AI.
If Chinese machines achieve consistent quality, this could result in a gradual reduction in the dependence of local factories on Western suppliers. In the longer term, this will increase price pressure in the DUV segment, accelerate the localisation of the supply chain and weaken the effectiveness of some export restrictions. At the same time, it may deepen the technological division of the market between the Chinese and Western ecosystems.
