China mass-produces homegrown DUV lithography machines

China has begun mass-producing domestically developed immersion deep-ultraviolet (DUV) lithography machines, a significant step in its push for semiconductor self-sufficiency. The production is led by Shanghai Aishengna Electronic Technology Group, a state-owned company established in 2023 with 7 billion yuan ($1 billion) in registered capital, backed by Shanghai Electric and a subsidiary of Shanghai International Trust. Aishengna has integrated teams from Shanghai Micro Electronics Equipment (SMEE) and Shanghai Yuliangsheng, an affiliate of Huawei-backed SiCarrier. The machines are expected to be delivered later this year to Chinese chipmakers including Semiconductor Manufacturing International Corporation (SMIC), Hua Hong Semiconductor, and Yangtze Memory Technologies (CXMT). Initial production is planned at about five units this year and roughly 20 in 2027. The development follows U.S.-led export restrictions that bar China from buying ASML's most advanced EUV systems and some advanced DUV machines. Analysts caution that the Chinese equipment still lags in performance, reliability, and yield, with initial yields estimated at 10-20% versus the 90% needed for profitable mass production. The news triggered an 8% sell-off in ASML shares on Monday, with further declines in European chip equipment stocks. China remains an important market for ASML, accounting for about 16% of its net system sales in the first half of the year. The breakthrough is seen as an insurance policy for Beijing rather than an immediate commercial threat to ASML's dominance.