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Chinese EUV Lithography Prototype Rekindles Global Tech Dispute, Exposing the Underbelly of an Advanced Chip Race Marked by Secrecy, Reverse Engineering, International Restrictions, and Industrial Ambition.
China has secretly built in Shenzhen a prototype extreme ultraviolet lithography machine, a technology known as EUV and used in the manufacturing of the most advanced semiconductors.
The equipment occupies almost an entire factory floor and can already generate extreme ultraviolet light, but has not yet produced functional chips, according to people with knowledge of the project interviewed by Reuters.
The case gained relevance because EUV is among the central stages of high-end chip production, used in artificial intelligence, mobile phones, data centers, and military systems.
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Today, commercial technology is dominated by the Dutch company ASML, whose supply chain includes companies specializing in high-precision optics, such as the German company Zeiss.
How EUV lithography used in advanced chips works
Lithography works as a form of microscopic-scale printing.
Instead of ink on paper, the machine projects light patterns onto a silicon wafer to form extremely small circuits.
In the semiconductor industry, reducing these circuits allows for expanding the processing capacity of chips, provided the process maintains precision and repeatability.
In the case of EUV, the light used has a wavelength of 13.5 nanometers.
To obtain it, the system fires laser pulses onto moving tin droplets, creating plasma and generating the necessary radiation to mark the patterns on the wafer.
This process occurs in a vacuum environment, as EUV light is absorbed by air.
The technical complexity is not limited to light generation.
Once created, it needs to be guided to the wafer by precision optical systems, without conventional lenses and using special mirrors.
According to manufacturers and industry experts, small alignment, contamination, or stability failures can compromise production yield.
The Chinese Prototype and the Limits of Reverse Engineering
The Chinese prototype was completed in early 2025 and, according to Reuters, was developed by a team that included former ASML engineers.
Sources interviewed by the agency state that the group worked on reverse engineering lithography machines to try to reproduce part of the technology used in Western equipment.
Compared to ASML’s commercial systems, the Chinese equipment is still described as rudimentary by people close to the project.
Nevertheless, the fact that the machine generates EUV light indicates that Chinese researchers have managed to overcome one of the initial stages of the process, although tests capable of demonstrating the production of functional chips are still pending.
The difference between operating a prototype and producing semiconductors on an industrial scale remains wide.
To achieve a commercial machine, it would be necessary to demonstrate stability, sufficient power, contamination control, optical integration, and nanometer-scale alignment.
These points were cited by industry experts as relevant technical barriers for any country attempting to reproduce EUV.
ASML’s own trajectory shows the scale of the development cycle.
The company spent years of research, high investments, and an international network of suppliers to transform EUV into commercially used technology for advanced chip production.
Therefore, experts interviewed by Reuters treat the Chinese advance as a sign of progress, not as an immediate replacement for machines available on the market.
Huawei and State Institutes in the Semiconductor Effort
A Reuters investigation attributes to Huawei a coordinating role in a network formed by companies, research institutes, and engineers spread across China.
According to people familiar with the project, the company participates in stages related to chip design, equipment development, manufacturing, and final product integration.
The mobilization was compared by sources heard by the agency to the Chinese “Manhattan Project,” in reference to the United States program that developed the atomic bomb during World War II.
The comparison, in this context, is linked to the degree of secrecy, strategic priority, and concentration of technical resources, not to the type of technology produced.
Huawei has occupied a sensitive position in this dispute since 2019, when the United States Department of Commerce included the company on the so-called Entity List.
The measure began to require licenses for exports, re-exports, or transfers of items subject to American rules, under allegations related to national security and U.S. foreign policy.
External restrictions and China’s pursuit of chip autonomy
The United States is pressuring allies to limit Chinese access to advanced chip manufacturing equipment.
The Netherlands, home to ASML, began restricting the sale of EUV systems to China and later expanded controls on advanced DUV machines, used in less sophisticated processes but still relevant to the semiconductor industry.
This blockade helped transform **semiconductor self-sufficiency** into a priority for Beijing.
Without free access to the most modern equipment, China began investing in domestic alternatives to reduce dependence on foreign suppliers in sectors considered strategic, such as artificial intelligence, telecommunications, high-performance computing, and defense.
According to Reuters, the Chinese government set 2028 as the target for producing functional chips using the prototype.
People close to the project, however, told the agency that 2030 would be a more realistic timeframe.
Should this timeline be confirmed, China would still remain behind global leaders, but would reduce part of the technological gap estimated by analysts.
Technical recruitment and used parts in the race for EUV
The Reuters investigation describes an operation based on three main fronts: **recruitment of experts, procurement of components in secondary markets, and disassembly of older lithography machines**.
According to sources, some of the professionals involved worked under false identities within high-security facilities to preserve the program’s secrecy.
The strategy targets knowledge accumulated in areas different from engineering and applied physics.
The construction of an EUV machine requires the integration of lasers, optics, sensors, materials, chemistry, software, mechatronics, and thermal control.
Each system needs to function in a coordinated manner, because failures at one stage can compromise the entire circuit engraving process.
Among the obstacles cited by Reuters sources, precision optics appears as one of the most difficult points to reproduce.
The systems used by ASML machines rely on mirrors and components produced by highly specialized suppliers.
Zeiss, one of the Dutch company’s main partners, describes this optical assembly as a structure that operates in a vacuum and requires extremely rigid tolerances.
The weight of EUV technology in the global chip dispute
Even without producing functional chips, the prototype indicates that China has advanced in an area considered strategic by governments and technology companies.
According to Reuters, the project shows that Beijing has managed to mobilize human, industrial, and financial resources to confront one of the main limitations imposed by Western restrictions.
The reading of industry experts, however, is that the advance still does not eliminate China’s dependence on critical components.
An industrial EUV machine needs to operate for long periods, with stability, yield, and maintenance compatible with mass production.
In the semiconductor industry, commercial viability depends less on an isolated test and more on the ability to manufacture large volumes with a low failure rate.
For this reason, the Chinese prototype represents a technical milestone in development, but it does not equate to China’s immediate entry into the group of manufacturers capable of producing advanced chips with their own machines.
The dispute remains concentrated across the entire production chain, which includes equipment, software, materials, optical suppliers, and factories with highly controlled processes.
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