- China has built a working prototype of an EUV lithography machine in Shenzhen by reverse engineering ASML equipment.
- Huawei is coordinating a "Manhattan Project" type project with thousands of engineers and strong state support to achieve self-sufficiency in semiconductors.
- The most realistic timelines place the production of advanced Chinese chips with EUV between 2028 and 2030, still behind Europe and the US.
- The advance threatens ASML's European monopoly and reconfigures the geopolitical balance in the AI and high-performance chip industry.
China has taken a step that few in Europe and the United States wanted to see so soon: It already has its own operational system, at least as a prototype. extreme ultraviolet (EUV) lithography scannerIt doesn't yet manufacture commercial chips, but Yes, it generates the coveted EUV light which until now was dominated only by the Dutch company ASML. What for years was considered almost an insurmountable barrier for the Chinese semiconductor industry is beginning to crack.
The story, revealed by various reports and especially by one in-depth investigation by ReutersIt describes a massive, highly secretive project orchestrated from the highest levels of power in Beijing. At a maximum-security complex in Shenzhen, thousands of engineers—many of them ASML veterans— They have worked for years to replicate, piece by piece, the technology that sustains the European monopoly in the manufacture of advanced chips.
A "Manhattan Project" for AI chips
In the industry, no one hides the comparisons anymore: The Chinese effort is openly described as a technological "Manhattan Project".The objective is not a bomb, but something almost as strategic in the midst of the rise of artificial intelligence: to control the machines that allow the manufacture of the world's most advanced chips, essential for data centers, mobile phones, supercomputing, and defense systems.
According to leaks, the Chinese EUV prototype was completed in early 2025 and It occupies practically an entire factory floor in Shenzhen.It is much bulkier and more rudimentary than ASML equipment, but it compensates for its lack of sophistication with sheer brute force. The machine fires lasers at tiny droplets of molten tin tens of thousands of times per second to generate the plasma that produces extreme ultraviolet light.
As of today, The system has managed to generate and control EUV lightThe most critical bottleneck in the entire architecture, although it still lacks the precision optical systems needed to print functional chips. That's the key difference with European scanners: ASML relies on the ultra-high-precision optics of the German company Carl Zeiss AG, an area where China is still lagging behind.
However, the mere fact of having an operational EUV scanner - even if it is in the testing phase - It abruptly accelerates the forecasts for Chinese technological independence.Analysts now place a plausible horizon for advanced chips between 2028 and 2030, a pace two to three times faster than it took ASML itself to mature its technology.
Huawei, the vertex of a secret industrial network
At the heart of the project is a name that is well known in Brussels and Washington: HuaweiFar from limiting themselves to designing mobile phones or chips for their own products, The company acts as the national coordinator of an extensive network of companies, laboratories, and public institutes. that cover the entire value chain, from processor design to manufacturing machinery.
Sources close to the operation describe a "wartime" atmosphere: Thousands of engineers working behind closed doors, in many cases sleeping on the premises themselves.with restricted communications and security protocols more akin to a military program than an industrial project. Many of these profiles come directly from ASML; they are Chinese engineers who worked in the Netherlands and accepted generous salary packages, signing bonuses, and housing assistance to return to their country.
To protect confidentiality, numerous technicians They operate under false identities and credentials within the Shenzhen complex. The degree of compartmentalization is extreme: only a very small group has a complete view of the system, while teams of recent graduates focus on reverse engineering specific components of EUV and DUV machines, under constant supervision and with reward systems linked to progress.
Huawei's role is not limited to the scanner. The company It already designs its own Kirin and Ascend processors, promotes the HarmonyOS operating system, and develops memory and connectivity solutions.If he manages to close the loop on the manufacturing machinery as well, he could control the key to the entire Chinese chip industry. from the 7 nm that it is already maximizing with DUV technology to future nodes in 3 and 2 nm.
Reverse engineering, grey market, and European and Japanese parts
The least visible part of the project, and perhaps the most delicate for Europe, is the logistics that support it. Given the impossibility of acquiring new EUV equipment due to export restrictions, China has systematically resorted to the secondary marketThrough intermediaries, the country has been purchasing components and modules for older generations of ASML machines, as well as equipment from Nikon and Canon.
These parts, theoretically intended for production with older nodes, have served as a basis for reverse engineeringIn parallel, China has dismantled part of the DUV machine fleet already installed within its borders to reuse components and gain a better understanding of how each subsystem works. The result is a hybrid EUV prototype, cruder than the European version, but advanced enough to validate the key physical principles.
In the field of optics, the Changchun Institute of Optics, Fine Mechanics and Physics —affiliated with the Chinese Academy of Sciences— has assumed a central role. Its researchers have worked to integrate the EUV light source into their own optical system, still far from matching the performance of the German optics, but already operational for internal testing. Experts agree that refining this aspect will take years, but the technical path has been laid.
All of this comes at a colossal cost. A commercial ASML EUV machine currently costs around $200-250 million, and future High-NA versions are approaching or exceeding $400 million. China has to replicate something similar almost from scratch, without official support from the original supplier.This relies on second-hand spare parts and domestic development. Even so, the State considers the cost manageable as part of a long-term industrial sovereignty strategy.
ASML, Europe and the beginning of the end of a monopoly
For Europe, this move is especially uncomfortable. ASML is one of the few truly strategic technology assets with global weight. The EU retains this advantage: all the leading factories of TSMC, Intel, and Samsung rely on its EUV machines to produce the chips that fuel the AI revolution. For years, this monopoly has placed the Netherlands at the heart of technological diplomacy between Washington, Beijing, and Brussels.
Under pressure from the United States, the Dutch and EU governments They took export restrictions even further.ASML never delivered an EUV system to Chinese customers, and even the most advanced DUV equipment has come under tight control. On paper, this was a way to keep China at least a generation behind in the manufacture of elite chips.
The Shenzhen prototype challenges that premise. Although it is still light years away from the reliability and performance of a commercial ASML machine, It demonstrates that the European monopoly is no longer technically absolute.In practice, Europe continues to dominate the market and will maintain that advantage for much of the next decade, but the idea that "China will never be able to do it" has officially become obsolete.
Semiconductor analysts point to a less visible but relevant effect: the psychological and financial impactThe mere fact that China has a credible roadmap toward its own EUV allows local foundries, equipment suppliers, and fabless chip designers to plan their growth with a clear "node horizon," something unthinkable just a couple of years ago. This is already reflected in stock valuations and investor appetite within the Chinese ecosystem.
For the European sector, the risk is not an immediate collapse, but a slow erosion: tighter margins, more fragmented supply chains, and less pronounced technological asymmetryEven if ASML maintains its lead with its High-NA systems and future 1nm nodes, the existence of a Chinese alternative will reduce the bargaining power and aura of exclusivity that the company has enjoyed until now.
Deadlines, current limits and 2030 horizon
However, it is advisable not to overstate the significance of the milestone. The Chinese scanner is still an early-stage prototype., comparable to the first systems that ASML tested internally in the early 2000s. It does not produce commercial chips, still depends on foreign components, its size is much larger than that of European equipment and its efficiency is well below industry standards.
The official goals speak of produce functional chips with EUV around 2028However, most internal sources and international analysts place a more reasonable scenario around 2030. Even at that point, China would probably still be manufacturing nodes in the 2 nm rangeMeanwhile, the Western ecosystem is already deploying production at 1 nm or other equivalent processes according to the roadmap of Imec and other research centers.
The relevant thing is not so much being one node behind - something acceptable in terms of competitiveness - as not to depend on licenses or exports to access key technologyFor Beijing, having its own EUV stack, even if less efficient, means being able to plan investments in data centers, weaponry, consumer electronics, or electric vehicles without fear of supply disruptions due to external political decisions.
Meanwhile, China continues to push its DUV machines to limits that many in Europe considered impossible. SMIC has already manufactured chips like the Kirin 9030 in a 5nm equivalent process using only DUV lithographyby chaining multiple exposures onto the same wafer. It's an expensive method with low yields, but it demonstrates the extent to which the country is willing to burn through resources to avoid falling behind in the AI era.
Looking ahead to the next decade, the picture that emerges is clear: The race is no longer about slowing down China, but about competing at a higher speed.The United States and Europe can continue to impose controls, but the margin for maintaining a significant gap is narrowing. The result will be a more fragmented advanced chip market, with two major technology blocs increasingly disconnected from each other.
In this new scenario, the Shenzhen EUV prototype is not yet a direct industrial threat to ASML or European factories, but it is a serious warning that the Western monopoly on the key component of chip manufacturing has begun to crackThe 2030s will determine whether Europe and the United States take advantage of their edge to innovate faster or simply manage, little by little, the loss of a supremacy that until very recently was taken for granted.
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