A report from investment bank UBS says China's development of extreme ultraviolet (EUV) lithography technology—used to make the most advanced computer chips—is roughly equivalent to where Dutch firm ASML was back in 2004. UBS analyst Francois-Xavier Bouvignies wrote in a client note, as reported by Bloomberg, that Chinese EUV efforts 'seem to be at a similar stage to ASML in 2004,' and the bank believes China will not achieve parity with ASML in EUV over the next ten years.
EUV lithography scanners are central to manufacturing the most advanced chips, and ASML is currently the only company making them. US export restrictions prevent major Chinese chipmakers from acquiring ASML's EUV machines, forcing China to attempt building a parallel domestic semiconductor toolchain. UBS based its EUV conclusion on patent analysis, and named two firms to watch: state-backed Shanghai Micro Electronics Equipment (SMEE) and startup Shanghai Yuliangsheng Technology Co., Ltd. Tom's Hardware also lists other entities reportedly working on lithography tools, including AMIES (a reported SMEE spin-off involving Aishengna and Yuliangsheng units) and SiCarrier, said to be controlled by Huawei, though Tom's Hardware notes Naura denies developing lithography tools.
UBS suggests the picture is different for older immersion-based deep ultraviolet (DUV) lithography, where it believes China could catch up to ASML within two to five years. Tom's Hardware notes that SMEE, established in 2002, is the most established Chinese lithography maker and reportedly introduced its first immersion DUV system, the SSA/800-10W, capable of targeting nodes down to 28nm, back in 2023. However, Tom's Hardware states there is no evidence that this system has entered mass production or been adopted by any chipmaker, and points to a lack of indirect evidence—such as procurement records, job postings, or scientific papers—that would normally accompany real deployment. Reports of Shanghai Aishengna Electronic Technology Group mass-producing China-made immersion DUV scanners resurfaced in July, according to Tom's Hardware, but again without evidence, targeted node information, or throughput details.
Tom's Hardware explains that photolithography is considered the most technically demanding step in chip manufacturing, requiring extraordinary precision across resolution, overlay, focus control, and defect density, all without compromise, since a machine that is precise but too slow cannot support mass production. The outlet estimates that even after a first Chinese immersion scanner is built, qualifying it for actual chip production—characterizing it against ASML equipment, developing process recipes, and scaling to multiple units—would likely take at least two years or more.
UBS also notes that despite Beijing's efforts to build domestic alternatives, China is expected to remain reliant on ASML due to differences in yield and throughput. ASML itself continues to depend significantly on Chinese sales, which UBS says rose to 33% of the company's 2025 sales, up from about 10% before 2020. The bank's bear-case scenario, which assumes new restrictions on DUV sales to China, projects China's share of ASML's sales falling to 15%–20% by 2027.