China Cracks Lithography Code Amid ASML Headaches
China has made significant strides in developing its own chip technology, starting production of immersion deep ultraviolet lithography machines. This critical tool is used to etch patterns onto silicon wafers that power everything from smartphones to Bitcoin mining rigs.
The initial production run is modest, with five units expected in 2026 and scaling up to twenty in 2027. This is a far cry from ASML's projected output of approximately 130 DUV immersion units in 2026 alone.
China's biggest chipmakers, SMIC, Hua Hong Semiconductor, and ChangXin Memory Technologies, will be the first recipients of these new machines.
The development poses a significant challenge to ASML, which has seen China account for 33% of its total revenue in 2025. This figure was already expected to decline to around 20% in 2026 before this latest development.