China is testing its first locally made chipmaking machine

China’s biggest chipmaker is testing the country’s first advanced locally made chipmaking machines. The move shows progress in China’s plan to rely less on foreign technology and compete in producing processors for artificial intelligence.

Semiconductor Manufacturing International Corporation (SMIC) is testing a deep-ultraviolet (DUV) lithography machine made by Yuliangsheng, a start-up based in Shanghai.

SMIC runs tests on China-made lithography machines

This is a big step for China because the country has always relied on lithography machines built by the Dutch company ASML. Without them, China would struggle to make advanced processors that power AI applications. However, the recent U.S.-led export controls limited China’s ability to buy the latest ASML machines, so companies had to invest a lot of money and resources into developing their own technology. 

The new DUV machine by SMIC uses the same technology as those by ASML (immersion technology), and people connected to the project say the first results look promising. SMIC’s machines currently produce chips at the 28-nanometre level, and engineers are trying advanced multi-patterning techniques to make them more efficient. With these methods, SMIC aims to make chips at the 7-nanometre level.

Experts say the machines might be able to make 5-nanometre chips in the future with more developments and adjustments. However, at this level, efficiency would be reduced, and the company might only produce fewer chips compared to global competitors like Taiwan Semiconductor Manufacturing Company.

China still struggles with production due to a lack of extreme ultraviolet, or EUV, lithography machines. EUV machines make the most powerful processors for AI and high-performing computing, and companies like TSMC use them to make chips for Nvidia and other global leaders. ASML is the only company globally that can make EUV machines, but because U.S. pressure forced the Dutch government to ban their sales to China, SMIC can only produce subpar chips. 

China speeds up efforts to build its own chip tools

Experts say it will take years before Chinese-made lithography machines can produce chips on a large scale. Engineers must spend months adjusting and changing them because most need at least a year of repeated testing and tuning before they are ready for full production.

However, competing with ASML’s machines even after these adjustments will be difficult because ASML has decades of experience and advanced processes. It can also access a global supply chain that helps it produce machines on a large scale. 

Yuliangsheng, a start-up in Shanghai, made the DUV machine that SMIC is testing, and it uses mostly parts made in China (though some parts still come from other countries). The company aims to make all parts in China to reduce dependence on foreign suppliers. Shenzhen-based SiCarrier, which owns part of Yuliangsheng, is also working on many other chipmaking machines.

However, even with these efforts, Chinese companies are still behind world leaders in producing the most advanced chips. Reports say Chinese chipmakers want to triple their production by 2026 and make sure locally-produced machines will be in full use by 2027. Still, it will take years before these machines can compete with global leaders. 

Semiconductor analyst at Bernstein, Lin Qingyuan, said the tests are promising but warned that full production is difficult. “It is one thing to have a prototype of a lithography machine; it is another thing to put it into volume production and make it compete with ASML. This could take another few years,” he said

Sign up to Bybit and start trading with $30,050 in welcome gifts