Beijing wants 100% domestic chip equipment, but lithography remains an uphill battle.
Shanghai Micro Electronics Equipment (SMEE) was set up 23 years ago and has developed lithography tools capable of producing 90-nm chips, suitable for use in home appliances, some consumer electronics and cars that require less computing power. The company aims to introduce lithography systems for 65-nm and 28-nm-grade production, but adoption of its machines by Chinese chipmaking clients remains limited.
Huawei, a key supporter of China's chipmaking equipment sector, has built a massive R&D hub in Shanghai, and is recruiting talent from global chip leaders like TSMC, ASML, Applied Materials and KLA. It is also supporting SiCarrier, a Shenzhen-based chip tool maker founded in 2021, in the development of a wide range of chipmaking tools, aiming to lower dependence on foreign players. Huawei has also hired optics and simulation experts overseas for its research institutes in Germany.

Little-known Shanghai Yuliangsheng Technology has emerged as a lithography challenger thanks to support from Huawei and SiCarrier. The company, also known as UEAscend, is also receiving technical help and staff from SMEE and several top research institutes.
Huawei, SiCarrier and Yuliangsheng are working together to develop China's first immersion DUV lithography machines in hopes of rivaling global leaders like ASML and Nikon.
The trio's ultimate mission is to develop a homegrown EUV lithography machine and build an independent ecosystem free from US restrictions. The central and local governments are also throwing their weight behind such efforts.
China launched the third phase of its National Integrated Circuit Industry Investment Fund — known as the Big Fund — in May 2024, with 344B yuan ($48B) in government backing. This phase focuses on strengthening the lithography supply chain and is expected to attract 1.38 trillion yuan in private investment. Local governments from Beijing to Shanghai and Shenzhen have also introduced policies to back domestic suppliers of critical EUV components, including photoresists, lithography tools, mirrors, lenses, lasers and light sources.

US export controls have created a golden era for Chinese suppliers of semiconductor equipment, as almost all the country's top chipmakers have switched as much as possible to locally made equipment.
Both SMIC and CXMT, the country’s top DRAM memory chipmaker, have experienced significant yield loss due to the use of domestic equipment, something global chipmakers typically try to avoid. However, this has not stopped them from continuing their trials.
Chinese chipmakers are also continuing to stockpile equipment from global leaders when possible, purchasing nearly $34B worth of such tools from Japan between 2020 and 2024.
“Chipmakers will share the big data, formulas and parameters that they run with international leading machines with local vendors to help fine-tune the equipment performance.”
In many cases, Chinese companies buy foreign chip equipment not for production but to research how subsystems and components are put together — reverse engineering.
asia.nikkei.com/Business/Techn
Shanghai Micro Electronics Equipment (SMEE) was set up 23 years ago and has developed lithography tools capable of producing 90-nm chips, suitable for use in home appliances, some consumer electronics and cars that require less computing power. The company aims to introduce lithography systems for 65-nm and 28-nm-grade production, but adoption of its machines by Chinese chipmaking clients remains limited.
Huawei, a key supporter of China's chipmaking equipment sector, has built a massive R&D hub in Shanghai, and is recruiting talent from global chip leaders like TSMC, ASML, Applied Materials and KLA. It is also supporting SiCarrier, a Shenzhen-based chip tool maker founded in 2021, in the development of a wide range of chipmaking tools, aiming to lower dependence on foreign players. Huawei has also hired optics and simulation experts overseas for its research institutes in Germany.

Little-known Shanghai Yuliangsheng Technology has emerged as a lithography challenger thanks to support from Huawei and SiCarrier. The company, also known as UEAscend, is also receiving technical help and staff from SMEE and several top research institutes.
Huawei, SiCarrier and Yuliangsheng are working together to develop China's first immersion DUV lithography machines in hopes of rivaling global leaders like ASML and Nikon.
The trio's ultimate mission is to develop a homegrown EUV lithography machine and build an independent ecosystem free from US restrictions. The central and local governments are also throwing their weight behind such efforts.
China launched the third phase of its National Integrated Circuit Industry Investment Fund — known as the Big Fund — in May 2024, with 344B yuan ($48B) in government backing. This phase focuses on strengthening the lithography supply chain and is expected to attract 1.38 trillion yuan in private investment. Local governments from Beijing to Shanghai and Shenzhen have also introduced policies to back domestic suppliers of critical EUV components, including photoresists, lithography tools, mirrors, lenses, lasers and light sources.

US export controls have created a golden era for Chinese suppliers of semiconductor equipment, as almost all the country's top chipmakers have switched as much as possible to locally made equipment.
Both SMIC and CXMT, the country’s top DRAM memory chipmaker, have experienced significant yield loss due to the use of domestic equipment, something global chipmakers typically try to avoid. However, this has not stopped them from continuing their trials.
Chinese chipmakers are also continuing to stockpile equipment from global leaders when possible, purchasing nearly $34B worth of such tools from Japan between 2020 and 2024.
“Chipmakers will share the big data, formulas and parameters that they run with international leading machines with local vendors to help fine-tune the equipment performance.”
In many cases, Chinese companies buy foreign chip equipment not for production but to research how subsystems and components are put together — reverse engineering.
asia.nikkei.com/Business/Techn