A Prototype Under Tight Guard

An exclusive Reuters investigation published on December 17, 2025 said Chinese engineers have secretly developed a prototype extreme ultraviolet (EUV) lithography machine inside a high-security laboratory in Shenzhen. 

The system, completed in early 2025, is now undergoing testing and is described as China’s most advanced attempt to replicate a technology central to cutting-edge chip manufacturing. 

EUV tools use light with a wavelength of 13.5 nanometers to etch ultra-fine circuits onto silicon wafers, enabling advanced processors for artificial intelligence, smartphones, and military systems.

While the prototype has successfully generated EUV light, it has not yet produced functional chips.

“Assembling the Missing Pieces”

According to Reuters, the machine occupies nearly an entire factory floor, far larger than ASML’s commercial EUV systems, which are roughly the size of a bus. 

Engineers reportedly opted for scale to accommodate higher power demands and compensate for less refined subsystems. 

Optics remain a major challenge: the prototype still requires significant refinement before it can pattern wafers reliably. 

The Changchun Institute of Optics, Fine Mechanics and Physics (CIOMP) played a central role in integrating the EUV light source and has recruited specialists with high salaries and research grants to close remaining gaps.

Talent, Reverse Engineering, and Controls

The project team includes former ASML engineers, and Reuters reported that Chinese researchers reverse-engineered Western technology while sourcing parts from second-hand markets. 

These reportedly included older ASML components and restricted items from suppliers such as Nikon and Canon, sometimes obtained through intermediaries. 

The effort aligns with a six-year national initiative under President Xi Jinping, frequently compared by insiders to a “Manhattan Project” for semiconductors. 

Huawei is said to be coordinating parallel efforts to assemble a fully domestic artificial intelligence chip supply chain.

Timelines Versus Reality

China’s official target is to produce working chips with the prototype by 2028. 

Insiders cited by Reuters suggested 2030 is more realistic, though still faster than many Western estimates that placed EUV development at a decade or more away. 

By comparison, ASML began EUV prototype work around 2001 and reached commercial production only in 2019, after billions of dollars in research and development. 

China’s progress, while less refined, points to accelerated learning under pressure.

Strategic Stakes for the Industry

EUV lithography is essential for manufacturing nodes below 7 nm, the foundation of modern AI accelerators such as Nvidia’s GPUs. 

Since 2019, U.S.-led export controls have barred China from purchasing ASML’s EUV tools, forcing reliance on deep ultraviolet (DUV) machines and costly multi-patterning with lower yields. 

A viable domestic EUV system would weaken ASML’s monopoly and reduce China’s exposure to export controls, potentially benefiting foundries like SMIC and firms such as Huawei. 

Significant hurdles remain, including replicating ultra-precision optics comparable to those supplied by Germany’s Carl Zeiss and achieving commercial yields at scale.