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China has not publicly demonstrated a production-ready EUV lithography system. Reuters reported a Chinese EUV prototype in 2025, but the more concrete milestone is separate: Reuters reported that China began producing domestic immersion deep-ultraviolet (DUV) tools in 2026. DUV production is a meaningful step toward self-sufficiency; it is not proof that China has solved EUV or can match ASML at leading-edge manufacturing.
The distinction matters beyond chip engineering. Export controls, domestic substitution and companies’ growing concern about future access are dividing parts of the semiconductor supply chain. The “Silicon Curtain” is a useful metaphor for that shift, not evidence that the industry has already split into two complete, independent systems.
What would count as a Chinese EUV breakthrough?
“China has EUV” can mean several very different things: a laboratory light source, a prototype that exposes wafers, a tool that prints viable features, or a machine that reliably produces chips in a commercial fab. Only the last of these would establish a direct production-scale challenge to ASML.
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Reuters reported in December 2025 that researchers in Shenzhen had built an EUV prototype, reportedly with help from former ASML engineers and using older equipment. The report described a target of producing working chips around 2028; that is a reported projection, not a demonstrated result. ASML denied shipping an EUV system to China, according to Reuters coverage in June 2026. Reuters coverage of the prototype report and ASML denial
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There is no public demonstration of a Chinese EUV scanner producing commercial chips, and no publicly confirmed performance data establishing source power, resolution, overlay, throughput, defect rates, uptime or maintenance intervals. Nor is there public evidence that the reported prototype has entered high-volume manufacturing or matches ASML’s NXE or EXE system families.
How to evaluate future claims
A credible claim should explain whether the system generates a stable EUV beam and exposes wafers, what performance it achieves, and whether a fab customer has accepted it for volume production. A prototype can be technically real and still be commercially unusable. Without operating data and customer qualification, “prototype” and “production system” are not interchangeable.
Why EUV is so demanding
EUV lithography uses light at a wavelength of about 13.5 nanometers. ASML describes the light source as striking microscopic tin droplets with powerful laser pulses. Because EUV is absorbed by air and ordinary optical materials, the scanner operates in a vacuum and relies on multilayer mirrors rather than conventional lenses. ASML’s technology and strategy overview
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Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →The scanner is only one part of the challenge. Its light source, mirrors, mask, wafer stages, metrology, software, contamination controls and service infrastructure have to function together with extreme precision. In April 2025, ASML said it had demonstrated a 1,000-watt EUV light source, evidence that power and productivity remain active engineering challenges even for the incumbent leader.
Generating EUV light is therefore not the same as building an industrial platform that can expose thousands of wafers reliably and economically. A tool’s commercial value depends on its combined performance, including throughput, yield, uptime and the ability to maintain it in a fab.
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China’s nearer-term milestone is immersion DUV, not EUV
DUV, or deep ultraviolet, uses longer wavelengths than EUV—commonly 248 nanometers or 193 nanometers. Reuters reported in July 2026 that China had begun producing domestically developed immersion-DUV tools, with initial systems expected to go to SMIC, Hua Hong and CXMT. That report describes an industrial production milestone, not a production EUV tool. Reuters report on China’s domestic immersion-DUV tools
| Capability | Reported status | Why it matters |
|---|---|---|
| Domestic DUV research | Advanced and increasingly operational, according to Reuters’ account of China’s equipment push | Builds know-how and may reduce reliance on foreign tools, particularly outside the most advanced production. |
| Domestic immersion-DUV production | Reuters reported production began in 2026; initial customers were expected to include SMIC, Hua Hong and CXMT | Moves the effort from research toward tools intended for customer fabs. |
| Domestic EUV prototype | Reported by Reuters in 2025; public performance data are unavailable | Signals strategic effort, but does not establish manufacturing readiness. |
| Domestic production EUV | Not publicly verified | This remains the decisive unproven milestone for a direct production-scale challenge. |
| ASML production EUV | Commercially deployed; ASML says it is the only manufacturer of EUV systems | Provides the current benchmark for an integrated commercial EUV platform. |
ASML’s 2025 annual report identifies the company as the world’s only manufacturer of EUV systems. It reported shipping 48 EUV and 279 DUV systems in 2025. Those figures describe ASML’s shipments, not the size of the entire global market. ASML 2025 annual report
What domestic DUV can—and cannot—do
What it could enable
- Reduce Chinese fabs’ exposure to restrictions on some foreign equipment and service.
- Build domestic capabilities in tool manufacturing, maintenance and spare parts.
- Support production of mature-node chips and, depending on tool performance and process integration, some more advanced chips.
- Give Chinese chipmakers more options if access to foreign equipment becomes less certain.
The tool effort is part of a broader ecosystem rather than a single-company project. Reuters reported that teams from Yuliangsheng and SMEE were incorporated into the domestic DUV effort, and described Yuliangsheng as affiliated with Huawei-backed SiCarrier. Those organizational relationships are based on reporting, not a fully transparent public account of every project role. Huawei is a chip designer and systems company involved in China’s broader semiconductor push; SMIC is a leading Chinese foundry and a potential customer for domestic tools.
What it does not establish
- That China has solved EUV or can produce leading-edge chips at globally competitive cost.
- That a domestic machine matches ASML’s throughput, yield or reliability.
- That Chinese fabs no longer need foreign components, materials, software, metrology or service.
- That export controls have failed across the board.
A domestically assembled machine may still rely on imported components. Likewise, domestic chip design does not mean the chip was fabricated on domestic equipment. Lithography is only one link in a manufacturing chain that also includes etch, deposition, cleaning, inspection, masks, photoresists, gases, wafers, packaging, design software and ongoing service.
How DUV can make advanced chips, at a price
EUV is not a simple gate separating advanced chips from all others. Advanced immersion DUV can pattern small features through multiple patterning: a fab divides a pattern into additional steps, using more rounds of exposure and processing. Sophisticated process integration, computational lithography and design adjustments can also help.
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The trade-off is that additional steps make manufacturing more complex. They can reduce throughput, raise costs and make yield management harder. A process that can produce some working advanced chips is not necessarily capable of producing them in large volumes, reliably or at competitive prices. “Can produce,” “can produce in limited quantities,” “can produce reliably at scale” and “can compete economically” are different claims.
China’s ability to make some advanced chips without EUV, where demonstrated, reflects process engineering and mobilization. It does not show that EUV is irrelevant or that DUV offers an equivalent production economics at the leading edge. Process-node labels also do not guarantee that products from different foundries have identical transistor density or performance.
What export controls are meant to accomplish
Controls on semiconductor equipment are intended to slow access to the most advanced manufacturing capabilities and raise the time and cost of reproducing them. They also seek to limit access to a wider set of capabilities—such as equipment service, software, components and manufacturing know-how—not just the sale of a single scanner. They do not amount to a complete ban on every semiconductor technology, older-generation tool or commercial interaction with China.
The Netherlands began prohibiting ASML EUV shipments to China in 2019 and later expanded licensing controls to selected DUV equipment. The relevant rules involve different governments and decisions: U.S. export restrictions, Dutch licensing, coordination with allies, company compliance and enforcement against possible circumvention. A licensing regime is not the same thing as a sealed wall around all technology.
Dutch officials have also faced pressure over possible tighter restrictions on ASML DUV sales and servicing for Chinese customers. The parliamentary record illustrates how the scope of controls remains a live political question. Dutch parliamentary documentation on proposed restrictions
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Restrictions can slow progress without stopping it. They can also motivate investment in substitutes and make customers less willing to depend on foreign suppliers. Reuters quoted analysts describing Chinese companies as increasingly unwilling to rely on Dutch technology over the long term; that is an interpretation of a trend, not a rule that applies uniformly to every Chinese fab. Reuters on China’s chip-tool push and ASML’s strategic position
Why ASML faces a strategic squeeze
ASML sits at the intersection of industrial competition and government policy. Its EUV position gives governments leverage over access to leading-edge chipmaking, while its business depends on selling complex equipment into a global market. The company reported 2025 revenue of €32.7 billion and net income of €9.6 billion. It forecast 2026 revenue of €34 billion to €39 billion. ASML 2025 financials and 2026 outlook
China has mattered to ASML’s DUV business. ASML said China demand and sales in 2026 were expected to decline significantly from exceptionally strong 2024 and 2025 levels, while its China DUV business had been stronger than anticipated in 2025. The company’s third-quarter 2025 results provide context for that assessment. ASML third-quarter 2025 results
This creates a feedback loop: sales to China support revenue, while China’s dependence on foreign equipment gives export restrictions strategic weight. Tighter restrictions encourage local substitution; substitution can reduce the future market available to foreign vendors. The likely business story is not simply that ASML wins or China replaces it. ASML can remain dominant in commercial EUV while facing a smaller or less reliable China market and stronger competition in some DUV categories.
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What the “Silicon Curtain” looks like in practice
The phrase is an analytical metaphor for growing separation and mistrust, not an official policy or a completed division into two self-contained technology blocs. The split can take several forms:
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- Equipment: China seeks domestic alternatives while Western governments restrict access to selected tools, parts or services.
- Investment: Governments subsidize domestic production, screen investments and steer capital toward supply chains considered more secure.
- Software and standards: Design software, intellectual property, manufacturing systems, cloud access and technical support may become harder to share across political boundaries.
- Talent and research: Recruitment, employee mobility, university partnerships and research collaboration face greater national-security scrutiny.
- Customers and suppliers: A buyer may favor a domestic supplier even when a foreign tool is technically stronger, if future access is uncertain.
This is not a clean two-country contest. Semiconductor production depends on companies and suppliers across multiple economies, including Taiwan, South Korea, Japan, the Netherlands, Germany, the United Kingdom and the United States. A domestic lithography milestone does not make a country self-sufficient in every material, tool or service required to manufacture chips.
What fragmentation means for companies, governments and investors
Duplicating capacity can improve resilience: a country or company may have more options if trade is disrupted, and domestic suppliers may gain funding and customers. But resilience is not the same as efficiency. Parallel factories, equipment programs and supply networks require capital; smaller markets and less knowledge-sharing can raise costs and complicate product development.
- For chipmakers: Equipment access, service availability, yield and cost may matter as much as a headline process node when choosing where to manufacture.
- For equipment vendors: Export rules and customer concentration affect which markets remain addressable, while local competitors can gain support from policies aimed at self-sufficiency.
- For governments: Controls can preserve a lead or delay access to key capabilities, but they also risk accelerating substitution and supply-chain duplication.
- For investors: A technology lead does not remove exposure to regulatory changes, regional demand shifts or a shrinking addressable market. ASML’s 2025 results and 2026 outlook show both its commercial scale and the sensitivity of China-related expectations to geopolitics.
- For end users: Fragmentation may eventually feed into chip prices or availability, but the effects depend on the equipment, product and supply chain; the evidence here does not establish a single consumer-price outcome.
Measures of self-sufficiency should therefore be read carefully. A tool may be domestically designed but use imported parts; a fab may use domestic tools for some production steps and foreign equipment for others. Strategic autonomy can improve even as manufacturing remains dependent on international suppliers.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsWhat evidence would change the EUV assessment?
The reported prototype makes China’s EUV effort consequential, but its commercial status will depend on evidence beyond the existence of a machine. The questions that would materially change the assessment are whether it can expose wafers at useful resolution and overlay, sustain competitive throughput and defect rates, operate over extended periods in a fab, and produce chips accepted by a customer for volume manufacturing. The sourcing of optics, masks, resists, metrology, software and service would also determine how self-sufficient the system is.
Until those facts are public, the calibrated view is that China has made real progress toward indigenous equipment capability, including a reported domestic immersion-DUV production milestone. Reported EUV prototyping remains a separate, unverified step toward a much harder goal: a reliable production platform.
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