China Reportedly Begins Producing Homegrown Immersion DUV Lithography Machines

Jul 27, 2026

Reports say China has begun limited production of domestically developed immersion DUV lithography machines, marking a milestone in Beijing's push for semiconductor self-sufficiency amid U.S. export controls. The machines are expected to be delivered to SMIC, Hua Hong, and ChangXin Memory in 2026. Reuters said The Information's sources did not identify the state-backed manufacturer, although some secondary sources linked the tool to Shanghai Yuliangsheng Technology. Following the report, ASML shares slipped more than 7%. The Chinese system still lags ASML in performance and reliability, needs further testing before mass production, and reportedly uses some imported parts.

China's domestic DUV production

▪According to The Information, China has begun manufacturing domestically developed immersion deep ultraviolet (DUV) lithography machines, which print circuit patterns onto silicon wafers.
▪Some secondary sources link the domestic immersion DUV tool to Shanghai Yuliangsheng Technology, a startup with ties to Huawei and SiCarrier, while Reuters reported that The Information's sources did not identify the state-backed manufacturer.
▪Shanghai Yuliangsheng Technology's immersion DUV lithography machine is designed to handle 28 nm-class chip processes using single exposure.

U.S. export restrictions

▪U.S. export restrictions and Dutch licensing controls have cut off China's access to advanced extreme ultraviolet (EUV) lithography systems.
▪U.S. lawmakers proposed additional restrictions specifically targeting DUV immersion tools in April 2026.

ASML market impact

▪Following reports of China's domestic DUV production, ASML shares fell more than 7%, putting the stock on track for its worst day since June 8.
▪The report on China's domestic DUV production also weighed on chip-equipment shares, with BE Semiconductor Industries tumbling about 8.5% and Soitec falling 5%.

DUV performance gaps

▪China's domestic DUV machine is mostly built from Chinese components, but some parts are still imported, meaning the supply chain is not fully sovereign.
▪China's domestic EUV lithography machine development remains at the prototype stage.
▪China's domestic immersion DUV system lags behind ASML's systems in throughput, overlay precision, and long-term reliability.

Production timeline constraints

▪Initial production of China's domestic DUV machines is limited to about five units in 2026 and approximately 20 units in 2027.
▪Semiconductor Manufacturing International Corp has been trialing Shanghai Yuliangsheng Technology's immersion DUV tool since September 2025, aiming for active mass production as early as 2027.

Chinese chipmaker deliveries

▪The homegrown DUV machines are expected to be delivered in 2026 to leading Chinese chipmakers, including Semiconductor Manufacturing International Corp, Hua Hong Semiconductor, and ChangXin Memory Technologies.
▪SMEE, another Chinese equipment maker, has reportedly sold around ten units of its SSA800 series targeting 28 nm immersion DUV lithography.