Behind Closed Doors: China Produces Its Next Technological Weapon

China has begun mass production of DUV lithography machines for chip imprinting, led by an unnamed state-owned company in Shanghai. The move aims to reduce dependence on Western technology and sanctions, but the machines still lag behind ASML's performance.

China has started mass production of DUV lithography machines for chip imprinting, a critical technology for manufacturing computer chips and electronic devices. The project is led by an unnamed Chinese state-owned company in Shanghai called 'Aishengna', established in August 2023 with a billion-dollar capital backed by the state. The company has merged local chip expert teams and startups, and plans to produce about five machines this year and another 20 in 2027, to be delivered to chipmakers like SMIC and CXMT. The move aims to sever Beijing's dependence on foreign technologies and Western sanctions, especially after the US and Netherlands banned China from purchasing advanced systems. However, the new machines still require extensive testing and are far from ASML's performance, which dominates the field. If successful, the move will provide Chinese companies with a critical safety net in case of tightening export restrictions.