China builds secret EUV prototype to rival the West in AI chips, targeting 2030 production

China Completes Secret EUV Lithography Prototype for AI Chips

In a high-security Shenzhen laboratory, Chinese scientists have achieved what Western export controls spent years trying to prevent: a working prototype machine capable of producing advanced semiconductor chips that power artificial intelligence, smartphones, and military systems 1

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. Completed in early 2025 and now undergoing testing, the prototype machine fills nearly an entire factory floor and represents China's most significant step toward semiconductor self-sufficiency 2

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The machine was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company's extreme ultraviolet lithography machines, according to two people with knowledge of the project . EUV lithography sits at the heart of a technological Cold War, using beams of extreme ultraviolet light with a wavelength of 13.5 nanometers to etch circuits thousands of times thinner than a human hair onto silicon wafers 3

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. The smaller the circuits, the more powerful the chips—a capability currently monopolized by the West.

From Manhattan Project to Semiconductor Independence

The breakthrough marks the culmination of a six-year government initiative described by sources as China's version of the Manhattan Project, the U.S. wartime effort to develop the atomic bomb . While China's semiconductor goals have been public, the Shenzhen EUV project has been conducted in secret under President Xi Jinping's semiconductor strategy, run by his confidant Ding Xuexiang, who heads the Communist Party's Central Science and Technology Commission 2

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Chinese electronics giant Huawei plays a key role coordinating a web of companies and state research institutes across the country involving thousands of engineers . "The aim is for China to eventually be able to make advanced chips on machines that are entirely China-made," one source told Reuters. "China wants the United States 100% kicked out of its supply chain" 2

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Technical Progress and Remaining Challenges in Chip Production

China's machine is operational and successfully generating extreme ultraviolet light, but has not yet produced working chips, according to sources familiar with the project . The Chinese government has set a goal of producing working chips on the prototype by 2028, though those close to the project say a more realistic target is 2030 2

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. This timeline is still years earlier than the decade analysts believed it would take China to rival the West in AI chips.

China still faces major technical challenges, particularly in replicating the precision optics that Western suppliers produce . The availability of parts from older ASML machines on secondary markets has allowed China to build a domestic prototype, demonstrating how Western export restrictions may have inadvertently driven China to innovate independently 3

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ASML Monopoly and Western Export Controls Face Test

Until now, only one company has mastered EUV technology: ASML, headquartered in Veldhoven, Netherlands. Its machines, which cost around $250 million, are indispensable for manufacturing the most advanced chips designed by companies like Nvidia and AMD and produced by chipmakers such as TSMC, Intel, and Samsung . ASML built its first working prototype of EUV technology in 2001, and it took nearly two decades and billions of euros in R&D spending before it produced its first commercially-available chips in 2019 2

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In April, ASML CEO Christophe Fouquet said that China would need "many, many years" to develop such technology . But the existence of this prototype suggests China may be years closer to achieving semiconductor independence than analysts anticipated. Starting in 2018, the United States began pressuring the Netherlands to block ASML from selling EUV systems to China, with restrictions expanding in 2022 when the Biden administration imposed sweeping export controls designed to cut off China's access to advanced semiconductor technology .

Geopolitical Implications for Global AI Power and Technological Sovereignty

If China successfully commercializes EUV lithography, it could fundamentally alter the global semiconductor industry and shift the balance of Global AI Power 3

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. Achieving technological sovereignty in chip manufacturing would allow China to reduce its reliance on Western technology and supply chains, domestically produce advanced AI chips, and accelerate its artificial intelligence development capabilities 3

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. The U.S. and its allies have long relied on their technological superiority to maintain leadership in military, economic, and AI capabilities. A shift in this balance could weaken the West's influence in global technology ecosystems and expose the limitations of current export restrictions, which may have inadvertently fueled innovation rather than containment 3

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The accelerated timeline—potentially achieving commercial chip production by 2028-2030—highlights the urgency for Western nations to reassess their strategies in maintaining their competitive edge in the semiconductor sector 3

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. This development raises critical questions about whether existing policies can effectively manage a rapidly evolving technological landscape where determined nations find alternative paths to innovation despite restrictions.