China has begun commercial production of domestically developed immersion deep ultraviolet, or DUV, lithography machines, Reuters reported. State-owned Shanghai Aisengna Electronic Technology Group is leading the project, developed with engineers from Chinese lithography companies. Chinese researchers also say they are nearing development of homegrown extreme ultraviolet, or EUV, lithography technology, an advance that could mark a major shift in the semiconductor industry.

Lithography is central to advanced semiconductor manufacturing. DUV can produce chips down to 7 nanometres through skilled engineering techniques, while EUV is considered nearly essential for 2, 3 and 5 nanometre processors. Dutch company ASML has long held an effective monopoly in the commercial EUV market. After US export restrictions limited Chinese access to advanced chips, equipment and software, China made semiconductors a national strategic priority and invested tens of billions of dollars in research, manufacturing, equipment, materials and talent.

Analysis found that Huawei’s Mate 60 Pro, launched in 2023, used a 7-nanometre processor made by SMIC. China is investing across chip design, equipment, materials, memory and fabrication, while CXMT and YMTC have expanded their positions. The source says the United States, Taiwan’s TSMC and ASML remain leaders in chip design, manufacturing and EUV technology respectively.