China has begun mass production of domestically developed immersion deep-ultraviolet (DUV) lithography machines, a key tool in semiconductor chip fabrication, with initial delivery planned for 2026 [1, 2, 3, 4]. Shanghai Aishengna Electronic Technology Group, a state-backed company established in August 2023, leads the development effort. The company consolidated teams from prominent Chinese lithography startups, including Shanghai Yuliangsheng [2, 3, 5].
Shanghai Aishengna, partially owned by subsidiaries of Shanghai Electric Holdings and Shanghai International Trust, has registered capital exceeding 7 billion RMB [3]. The firm expects to deliver about five domestically made DUV machines to leading Chinese chipmakers such as Semiconductor Manufacturing International Corp (SMIC), Hua Hong Semiconductor, and ChangXin Memory Technologies (CXMT) by the end of 2026 [1, 2, 3, 4, 6]. Production is planned to expand to around 20 units in 2027 [1, 2, 3, 4].
Immersion DUV lithography uses water as a medium between the lens and the wafer to print smaller circuit patterns than traditional dry lithography. It is suitable for chips with process nodes larger than 7 nanometers [1, 3, 6, 7].
The domestic Chinese DUV machines still trail behind the Dutch company ASML’s machines in terms of performance and reliability, and require further testing before full commercial use [1, 2, 3, 8]. Chinese analysts estimate it may take 3-4 years to close the quality gap with ASML [3]. Industry experts say the new Chinese machines do not pose an immediate commercial threat to ASML, as developing a competitive domestic supply chain is a multiyear process [1, 3, 8].
China faces US-led export controls that restrict access to advanced EUV lithography machines and increasingly limit supply of advanced DUV equipment since 2019 and 2023 respectively [1, 3]. China is also working on domestic EUV lithography technology, but it remains at an early prototype stage [3].
The news triggered sharp sell-offs in semiconductor stocks. ASML shares dropped to their lowest since June 2026 after reports surfaced, while the semiconductor sector in Asia also suffered declines [4, 9, 10, 11, 12, 5]. Analysts view China's progress as a milestone in the US-China technology conflict. NUS Business School Associate Professor Fu Fangjian said the breakthrough represents "a milestone in China's efforts to overcome US technology chokeholds" [3]. Zhang Fan, co-founder of Singapore Advantage Research Consulting, said "China breaking through the 7nm chip barrier is only a matter of time... this round of tech containment has failed" [3].
However, some analysts remain cautious about immediate impact. FSM Global Research analyst Pan Zhechuan noted the effect on Singapore’s semiconductor stocks is "very indirect and limited" [9]. Crédit Agricole’s Asia chief strategist Chen Dade said while China’s production of DUV machines won’t threaten ASML soon, it increases China’s chances of reducing reliance on imported semiconductor equipment [9].
China plans to ramp up production and delivery of domestic immersion DUV lithography machines through 2027. The earliest units will arrive at major Chinese chipmakers by the end of this year [1, 2, 3, 4, 6].
