China’s “Manhattan Project”: a team of former engineers from ASML built an EUV lithography machine prototype through reverse-engineering the company's machines in a high-security Shenzhen laboratory in early 2025. The prototype is now undergoing testing; it’s operational and successfully generating EUV, but has not yet produced working chips.
The existence of this prototype suggests China may be years closer to achieving semiconductor independence than analysts anticipated. But China still faces major technical challenges, particularly in replicating the precision optical systems that Western suppliers produce.
The availability of parts from older ASML machines on secondary markets has allowed China to build a domestic prototype, with the government setting a goal of producing working chips on the prototype by 2028. But those close to the project say a more realistic target is 2030, which is still years earlier than the decade that analysts believed it would take China to match the West on chips.
The breakthrough marks the culmination of a six-year government initiative to achieve semiconductor self-sufficiency, one of Xi Jinping's highest priorities. While China's semiconductor goals have been public, the Shenzhen EUV project has been conducted in secret.
The project falls under the country's semiconductor strategy, which state media has identified as being run by Xi Jinping confidant Ding Xuexiang, who heads the Communist Party's Central Science and Technology Commission.
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. China wants the United States 100% kicked out of its supply chains."
Until now, only one company has mastered EUV technology: ASML. No EUV system has ever been sold to anyone in China.
One veteran Chinese engineer from ASML recruited to the project was surprised to find that his generous signing bonus came with an identification card issued under a false name.
Once inside, he recognized other former ASML colleagues who were also working under aliases and was instructed to use their fake names at work to maintain secrecy. Recruits were given fake IDs to conceal their identities from other workers inside the secure facility.
The guidance was clear: Classified under national security, no one outside the compound could know what they were building — or that they were there at all.
The team includes recently retired, Chinese-born former ASML engineers and scientists — prime recruitment targets because they possess sensitive technical knowledge but face fewer professional constraints after leaving the company.
Two current ASML employees of Chinese nationality in the Netherlands said they have been approached by recruiters from Huawei since at least 2020.
European privacy laws limit ASML's ability to track former employees. Though employees sign non-disclosure agreements, enforcing them across borders has proven difficult.
ASML won an $845 million judgment in 2019 against a former Chinese engineer accused of stealing trade secrets, but the defendant filed for bankruptcy and continues to operate in Beijing with Chinese government support.
ASML says it “vigilantly guards” trade secrets and confidential information, and it safeguards EUV knowledge by ensuring only select employees can access the information even inside the company.
"While ASML cannot control or restrict where former employees work, all employees are bound by the confidentiality clauses in their contracts” and it has “successfully pursued legal action in response to the theft of trade secrets.”
It’s unclear if any legal actions have been taken against former ASML employees involved in China’s lithography program.
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https://reuters.com/world/china/how-china-built-its-manhattan-project-rival-west-ai-chips-2025-12-17/…
ASML says it “vigilantly guards” trade secrets and confidential information, and it safeguards EUV knowledge by ensuring only select employees can access the information even inside the company.
"While ASML cannot control or restrict where former employees work, all employees are bound by the confidentiality clauses in their contracts” and it has “successfully pursued legal action in response to the theft of trade secrets.”
It’s unclear if any legal actions have been taken against former ASML employees involved in China’s lithography program.
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reuters.com/world/china/ho