- China has begun mass producing domestically developed immersion DUV lithography machines, a significant move to reduce reliance on foreign technologies.
- Shanghai Aishengna Electronic Technology Group is leading the production effort, with plans to produce five units this year and around 20 in 2027.
- ASML is facing potential challenges as the Chinese-made DUV machines are expected to be delivered to leading Chinese chipmakers, including Semiconductor Manufacturing International Corp (SMIC) and Hua Hong Semiconductor.
- ASML has stated it plans for a capacity of around 130 DUV immersion machines in 2026, with a 30% increase planned for 2027.
- China accounted for 14% of ASML's net system sales of €6.6 billion ($7.5 billion) in the past year.
- China's DUV tools are seen as a way to displace revenue ASML has already lost due to export controls.
- Successful deployment of these machines would provide Chinese chipmakers with an alternative source of equipment amid potential further restrictions from Western governments.
- Aishengna was established in August 2023 with a registered capital of ¥7 billion ($1.0 billion), backed by state-owned shareholders.
ASML's stock has taken a hit amid reports of China's entry into the DUV lithography market, with Shanghai Aishengna Electronic Technology Group leading the charge. The company aims to produce five DUV units this year and 20 by 2027, marking a significant step in China's semiconductor self-sufficiency initiative.345610
China's production of DUV machines is seen as a response to U.S. export controls that have limited its access to ASML's advanced technologies. China accounted for 14% of ASML's net system sales of €6.6 billion ($7.5 billion) last year, indicating the importance of the Chinese market to ASML's revenue.7
Despite the advancements, analysts remain skeptical about the immediate impact on ASML. They note that while China is making strides, supporting a global fleet capable of competing with ASML is a significant challenge. ASML plans to increase its capacity to around 130 DUV immersion machines by 2026 and add 30% in 2027, reinforcing its market position.
The Chinese-made DUV machines are expected to be delivered to major local chipmakers, including Semiconductor Manufacturing International Corp (SMIC) and ChangXin Memory Technologies (CXMT), as part of Beijing's broader strategy to reduce reliance on foreign technology.
“China's production of DUV machines is a significant step in its semiconductor self-sufficiency initiative, a priority for President Xi Jinping. However, analysts caution that ASML's market position remains strong, as the Chinese tools may not match the capabilities of ASML's advanced systems.”
CNBC
