China can now make most of a chip. The one thing it cannot make, or buy, or even fully service, is the machine that makes the best chips. Lithography is the wall, and it is the highest in the industry.
Extreme-ultraviolet (EUV) lithography, essential for the most advanced logic, is built by a single company on Earth, the Netherlands’ ASML, and not one EUV machine has ever legally entered China.[1] China’s own leading lithography maker, SMEE, has a confirmed production tool at roughly the 90nm class, a node ASML surpassed around 2011. Its domestic immersion-DUV output runs at only about five machines a year against ASML’s roughly 130, and a homegrown EUV light source built in Shenzhen has generated photons but has not yet exposed a wafer.[2]
The screws keep tightening
The restrictions have moved from sales to servicing. Since late 2024 the Dutch require licences not just to sell ASML’s immersion-DUV workhorses to China but to service them, supply spare parts and push software updates to tools already installed, and Washington is pressing to cut sales further still.[3] China’s most-discussed answer, a homegrown EUV effort using a laser-induced-plasma source reportedly linked to Huawei, is exactly the kind of claim to treat with caution: it rests on trade-press rumour, has no confirmation from Huawei or SMIC, and its near-term timelines are, by Western analysts’ consensus, premature.[4]
China has closed nearly every gap in chipmaking except the widest one, the single machine that defines the leading edge.
Lithography is the load-bearing constraint because everything else in the sector is a response to it. The pivot to mature nodes, the reliance on multi-patterning, the bet on advanced packaging to wring more from older silicon; each is a way of routing around the one machine China cannot make. That is why the honest test of any “China is about to match the leading edge” claim is a single question: has a Chinese-built tool exposed a sub-28nm wafer in volume? Until it has, homegrown-EUV reports belong in the column marked aspiration, and the timeline for genuine leading-edge self-sufficiency is measured by this tool and no other.
How this reaches a portfolio
Lithography is the true bottleneck, and it explains the shape of everything else: the pivot to mature nodes, the reliance on multi-patterning, the bet on advanced packaging to squeeze more from older silicon. Any thesis that China is “about to” match the leading edge should be tested against a single fact, no EUV, no confirmed sub-28nm homegrown scanner, and any homegrown-EUV headline treated as unproven until a wafer is exposed. We watch lithography as the clock on the entire self-sufficiency timeline.
| Ref | Publication | Date | Supports |
|---|---|---|---|
| [1] | Techzine | 2025 | ASML's EUV monopoly and no EUV in China |
| [2] | Tom's Hardware (citing Reuters) | Aug 2026 | SMEE node class, DUV output rate, EUV source status |
| [3] | South China Morning Post | Sep 2024 | Dutch licensing of sales, servicing and spare parts |
| [4] | Global SMT & Packaging (citing DIGITIMES) | Mar 2025 | Unconfirmed homegrown LDP-EUV reports |
References
- Techzine, “How close is China’s EUV project to eliminating ASML’s monopoly?,” 2025. Read source ↗
- Tom’s Hardware (citing Reuters), “Chinese chipmaking tool roadmaps examined — DUV production at five machines a year, and an EUV prototype with no chips,” Aug 2026. Read source ↗
- South China Morning Post, “China hit hard by new Dutch export controls on ASML chip-making equipment,” Sep 2024. Read source ↗
- Global SMT & Packaging (citing DIGITIMES), “China’s EUV breakthrough: Huawei, SMIC reportedly advancing LDP lithography,” Mar 2025. Read source ↗
Every source above is public and linked. This is a research brief from Singularity Dynamics; full briefings on this topic are available on request.