China advances in immersion DUV lithography machine production to reduce technological dependence

China has begun manufacturing immersion DUV lithography machines on a national scale, a technology crucial for semiconductor production. This progress strengthens Beijing's strategy to decrease its reliance on international suppliers.

New phase in technological autonomy

This project is being conducted by a state-owned enterprise based in Shanghai and represents a milestone in China's pursuit of technological sovereignty, although it still lags behind the most sophisticated equipment offered by ASML.

Details of Chinese production

As reported by Reuters, Shanghai Aishengna Electronic Technology Group is leading the manufacturing of these equipment, integrating teams from Chinese startups specializing in lithography. Founded in August 2023, the company has a registered capital of 7 billion yuan, with two state-owned corporations linked to Shanghai as its shareholders.

DUV (deep ultraviolet) technology is used to pattern circuits on silicon wafers, constituting one of the most vital stages in chip manufacturing. In immersion systems, the use of a layer of water between the lens and the wafer enables the creation of finer and more precise patterns. Applications of these systems include the manufacturing of various types of chips, the production of more advanced semiconductors through multiple exposures, the creation of alternatives for local manufacturers, and the mitigation of risks resulting from potential trade restrictions.

Challenges and comparison with global leaders

Despite this significant advance, the machines produced in China still require testing and, in the short term, should not pose a threat to the dominant position of ASML, the Dutch leader in the lithography equipment market. Reuters points out that this development is a victory for China's self-sufficiency program in semiconductors, a priority goal of President Xi Jinping.

However, experts emphasize that developing prototypes and achieving reliable mass production of equipment are distinct challenges. Analysts at JP Morgan Chase commented that producing some immersion DUV instruments differs from manufacturing tools suitable for high-volume production, where factors such as yield, alignment, speed, and reliability over thousands of production cycles are crucial.

Geopolitical context of the chip race

This initiative occurs amid restrictions imposed by the United States and the Netherlands on advanced chip manufacturing technologies. China has been barred from acquiring ASML's most complex EUV systems, which are essential for producing the most modern semiconductors.

Even with these limitations, China remains an important market for the Dutch manufacturer. According to Reuters, China accounted for approximately 16% of ASML's net sales in the first half of the year. The new equipment is expected to be delivered this year to Chinese manufacturers such as SMIC, Hua Hong Semiconductor, and ChangXin Memory Technologies (CXMT). The development also involves other companies, such as Shanghai Micro Electronics Equipment (SMEE) and Yuliangsheng.

This new phase in the Chinese semiconductor industry demonstrates that the global technological competition continues to evolve. Although domestic production of lithography machines does not completely eliminate external dependence, it expands the country's capacity to build a more autonomous chip supply chain.

www.aajtak.inJuly 21, 16:04

China Considers Restrictions on Chip and AI Technology Exports, Which Could Trigger a Global Crisis

Amid concerns in the US regarding artificial cybersecurity and limited access to AI models, China is also preparing for major actions (China Big Plan) that could provoke serious global upheaval. According to available information, China is considering imposing bans on the export of AI technologies and semiconductor chips.

Potential Consequences of Restrictions

If China adopts such measures, it could create a significant crisis for industries including defense manufacturing, automotive, data centers, and electronics. According to a Business Today report, based on Financial Times materials, China is preparing to tighten rules concerning the export of chips and AI technologies.

Technology Control

China aims to keep the most advanced AI technologies exclusively within its borders, viewing them as a strategic national asset. Negotiations are underway with major sector companies such as Alibaba, ByteDance, and Bytedance as part of this process. The Chinese Ministry of Commerce is reportedly discussing security measures with Chinese AI and semiconductor companies. Furthermore, the possibility of prohibiting the transfer of training data outside the country and preventing foreign users from uploading AI models is being discussed. In China's view, this will help reduce the risk of its AI technologies being used or copied by other nations.

Chip Production Regulation

Moreover, China may introduce new regulations to prevent foreign chip manufacturers, such as Qualcomm and TSMC, from using Chinese designs when creating chips based on Chinese designs. Thus, the country intends to control its chip developments and keep them domestic.

Current Status and Global Leaders

Although AI export restrictions have not yet been approved, they are expected to be included in China's official list of technologies subject to export bans or limitations. However, it should be noted that China is not the largest player in the production of the most advanced semiconductor chips; leaders in this field are Taiwan, South Korea, and the US. China's main specialization lies in chip packaging and certain specific categories of chips.

Previous Actions by China

It is worth recalling that last week, amid geopolitical tensions, China announced a ban on helium exports (China Helium Export Ban), which shocked the world. China exports 80% of the world's helium, and following this ban, the chip sector was also put at risk. Helium is considered essential for semiconductor factories, and if these restrictions persist, chip manufacturers will face increased costs and supply risks, potentially leading to higher prices for electronics and chip-using goods.