Its performance is inferior to ASML’s.
Some components are imported from Japan, but most are made in China.
Production volume remains far too low. Twenty units next year is nowhere near enough.
China has begun mass-producing its own deep ultraviolet (DUV) lithography tools, the machines that etch circuit patterns onto chip wafers. Three domestic chipmakers, SMIC, Hua Hong Semiconductor and CXMT, are set to receive the first units this year. The tools still lag ASML's equipment in performance, and output stays too low to meet demand, so how much this actually changes for China's chip industry is a genuinely open question. The Information reported on the 27th that a state-backed company in Shanghai has started producing immersion DUV lithography machines. Chip analyst Jukan flagged the news along with two caveats worth sitting with.
A lithography machine is the single most expensive and hardest-to-replace piece of equipment in chipmaking. ASML supplies nearly all of the newest generation, extreme ultraviolet (EUV) tools, which gives it a chokehold over the world's leading foundries. What China just started making sits one rung below that. In a single exposure it can print 28-nanometer-class circuits, and with multipatterning, layering several exposures to sharpen the pattern, it can reach down to 7-nanometer-class chips.
Jukan pointed to two gaps. First, performance: the new tool trails ASML's on quality. Second, parts: most components are domestic now, but some critical ones still come from Japan, so this isn't full self-sufficiency. Volume is the bigger constraint. Roughly 5 units ship this year, and next year's plan tops out around 20, nowhere near enough to satisfy SMIC, Hua Hong and CXMT all at once.
A state-backed program just put a domestic DUV tool on a real production line for the first time, which is a symbolic breakthrough on its own.
Performance still trails ASML and next year's 20 units can't even cover three domestic chipmakers' demand.
This doesn't threaten ASML's position today. But China has cleared the first real hurdle in building its own lithography supply, and the pace at which output and performance improve from here is worth tracking, since it marks an early crack in a supply chain that Taiwan, South Korea and Japan have long controlled.
Why it matters · Lithography is the last real bottleneck in the chip supply chain, so how fast China closes this gap will help decide the industry's balance of power for years.
Worth asking · Is China's homegrown DUV tool the start of a real threat, or still years too early to matter?
Awaiting gradingTo be scored at end of 2027: whether the company's DUV tool shipments actually reached roughly 20 units.