China's Home-Grown DUV Chip Gear Not ASML's Biggest Threat, Analysts Say
Translated from English, summarized and contextualized by DistantNews.
At a glance
Analysis
Named sources
Context piece
- Analysts suggest China's progress in domestic DUV lithography machines is not the primary threat to ASML.
- While China aims to produce DUV units, commercial viability and continuous production remain significant challenges.
- A more substantial risk to ASML stems from potential U.S. legislation, the Match Act, which could restrict sales and support to certain countries.
Despite growing Western concerns about China's advancements in semiconductor manufacturing equipment, analysts believe that the country's domestically produced DUV lithography machines do not pose the greatest threat to industry leader ASML. The Dutch firm experienced a notable stock dip following reports that a state-backed Shanghai company had begun manufacturing immersion deep-ultraviolet (DUV) lithography machines.
Delivering a domestic machine was not the same as qualifying it for continuous commercial production.
China reportedly plans to produce approximately five DUV units this year and around 20 by 2027, with initial systems slated for major manufacturers like SMIC, Hua Hong Semiconductor, and ChangXin Memory Technologies. While this news spurred a rally in related Chinese stocks, industry observers urge caution. Producing such complex machinery is one thing; qualifying it for continuous, commercially viable production running 24/7 for an entire year is another, according to Paul Triolo, technology policy lead at DGA-Albright Stonebridge Group.
Producing machines of the complexity of DUV immersion lithography that are commercially viable and running 24 hours, seven days a week, for an entire year is very difficult.
Past reports of Chinese progress in immersion DUV have proven inaccurate, and the validity of the latest claims remains uncertain, noted Jefferies analyst William Beavington. He added that domestic capabilities would advance more rapidly if these machines were integrated into commercial production with key companies. Currently, Chinese chip fabrication plants rely heavily on imported equipment to scale their operations. For instance, semiconductor equipment imports into Anhui province, where CXMT is located, more than doubled in March compared to the latter half of last year, with lithography systems accounting for a significant portion.
Previous reports of Chinese progress in immersion DUV had proved false, and it remained to be seen whether the latest claims were valid.
Chinese fabs have strong incentives to maintain their existing ASML systems, ensuring access to maintenance, spare parts, and technical support. Beavington commented, "China will no doubt continue to buy ASML machines as long as it can due to their significantly superior quality." The more significant risk to ASML, according to analysts, is the proposed Multilateral Alignment of Technology Controls on Hardware Act (Match Act) in the U.S. If passed, this act would prohibit the sale of immersion DUV systems to countries deemed "of concern" and impose stricter restrictions on servicing and technical support at critical semiconductor manufacturing facilities. The potential withdrawal of ASML engineers from China due to such legislation could represent a more substantial challenge.
China will no doubt continue to buy ASML machines as long as it can due to their significantly superior quality.
DistantNews Editorial
Originally published by CNA in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.
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