China builds crude EUV prototype, advances semiconductor capabilities

China has assembled a prototype extreme ultraviolet lithography machine capable of generating 13.5nm EUV light, the specific wavelength required to etch the world’s most advanced semiconductors. The machine, completed in early 2025 at a facility in Shenzhen, has not yet produced a single working chip.

The machine and the people who built it

EUV lithography is the most complex manufacturing technology humans have ever commercialized. Dutch company ASML is the sole supplier of production-grade EUV machines, which cost roughly $250M each and are essential for fabricating chips at sub-5nm process nodes.

China’s prototype was developed in part through reverse engineering older ASML technology. The team reportedly includes former ASML engineers who were recruited with signing bonuses ranging from $420K to $700K, with secrecy provisions attached. Among the notable recruits is Lin Nan, who previously led ASML’s light source division and now works at the Shanghai Institute of Optics.

What “crude” actually means here

Generating EUV light is a necessary but wildly insufficient condition for making chips. The process involves firing a high-powered laser at tiny droplets of molten tin, which creates a plasma that emits light at the 13.5nm wavelength. That part, China appears to have pulled off.

EUV lithography requires mirrors polished to a flatness measured in individual atoms, optical systems with essentially zero tolerance for vibration, and a vacuum chamber that keeps contaminants out at a molecular level. German optics firm Carl Zeiss is the only company capable of producing them at the precision required for production-grade EUV systems, and those components fall under the same export restrictions that block the full machines.

The Chinese government has set a target of producing functional chips using domestic EUV technology by 2028. Industry analysts consider 2030 a more realistic timeline.

The strategic context

No EUV systems have been sold to China since export controls took effect around 2018-2019, and subsequent rounds of restrictions have tightened controls around DUV (deep ultraviolet) equipment as well.

Beijing has compared the semiconductor initiative to its own Manhattan Project. The Big Fund III, China’s latest state-backed semiconductor investment vehicle, has committed approximately $50B toward achieving lithography independence and broader chip self-sufficiency.

What this means for the global chip landscape

If China achieves functional EUV chip production by 2030, even at older process nodes like 7nm or 5nm, it would represent a significant shift in global semiconductor supply chains. Those nodes power the vast majority of applications in automotive, industrial, telecom, and consumer electronics.

The recruitment of former ASML engineers has already prompted the Dutch government to tighten its own export and personnel controls. ASML has roughly 44,000 employees, and even a small fraction defecting with critical know-how could meaningfully compress China’s learning curve.

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