China successfully develops EUV machine prototype

A Reuters report states that China has successfully developed an EUV (Extreme Ultraviolet) lithography machine at a laboratory in Shenzhen, aided by several former ASML engineers. This development confirms earlier rumors and marks a significant breakthrough in China's chipmaking capabilities, potentially enabling Chinese foundries such as SMIC to produce advanced chips that could compete with those from TSMC, Intel, and Samsung. The endeavour was said to be a secret one, with the former engineers operating under aliases.

However, the EUV machine is not yet capable of producing chips. It is expected to become fully functional by 2028 or possibly as late as 2030. By that time, competitors are likely to have transitioned to high-NA EUV, the next-generation lithography technology developed by ASML. Additionally, mass-producing the equipment under discussion will be challenging because China will need to manufacture everything in-house, with official help or support from ASML, a Dutch company, unlikely to come. Plus, for the project to stay on track, various second-hand parts from multiple suppliers, such as Nikon and Canon, will be needed.

Until now, China had to rely on last-gen DUV (Deep Ultraviolet) machines - the only ones it can legally acquire from ASML. SMIC’s N+3 node pushed DUV well beyond its limits by manufacturing 5-nm-class chips like the Kirin 9030. A subsequent patent discussed pushing the tech to 2 nm. The complexity of that project, as well as abysmal yields, mean the home-grown EUV solution can't come soon enough.