China has begun limited production of its homegrown immersion deep ultraviolet (DUV) lithography machines, a significant step toward semiconductor self-reliance. This advancement could disrupt global chip supply chains and impact tech manufacturing for years to come.
Progress in Domestic Chipmaking Tools
Shanghai Yuliangsheng Technology, linked to Huawei and SiCarrier, developed the DUV lithography machine now being tested by Semiconductor Manufacturing International Corporation (SMIC), China’s largest chip foundry. The machine targets 28 nm chip fabrication and, using multi-patterning methods, might even reach nodes as fine as 7 nm. SMIC aims to move into mass production as soon as 2027. Another domestic equipment maker, SMEE, has already sold about ten SSA800 series units for similar 28 nm processes.
Implications Amid Geopolitical Tensions
Until now, advanced lithography tools, especially immersion DUV machines, were dominated by Western firms like the Dutch company ASML. China’s progress comes despite US lawmakers proposing new restrictions on these machines in April 2026, expanding beyond previous bans mainly focused on extreme ultraviolet (EUV) lithography for 5 nm chips and below.
While 28 nm is considered mature technology globally Apple’s newest chips use 3 nm nodes this process remains vital for automotive, industrial, and IoT devices. For cryptocurrency mining hardware makers, who rely heavily on Taiwanese foundries like TSMC, a stronger SMIC could offer alternative production options, potentially affecting ASIC prices and availability.
Investors should watch whether SMIC meets its 2027 production goals and how intensively US export controls on DUV tools are enforced, as both factors will shape the semiconductor and crypto hardware landscape.
