SINGAPORE, Dec 17 (Reuters) – In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years making an attempt to stop: a prototype of a machine able to producing the cutting-edge semiconductor chips that energy synthetic intelligence, smartphones and weapons central to Western navy dominance, Reuters has discovered.
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EUV machines sit at the coronary heart of a technological Cold War. They use beams of utmost ultraviolet gentle to etch circuits hundreds of occasions thinner than a human hair onto silicon wafers, at present a functionality monopolized by the West. The smaller the circuits, the extra highly effective the chips.
China’s machine is operational and efficiently producing excessive ultraviolet gentle, however has not but produced working chips, the folks mentioned.
In April, ASML CEO Christophe Fouquet mentioned that China would wish “many, many years” to develop such know-how. But the existence of this prototype, reported by Reuters for the first time, suggests China could also be years nearer to reaching semiconductor independence than analysts anticipated.
Nevertheless, China nonetheless faces main technical challenges, notably in replicating the precision optical techniques that Western suppliers produce.
The availability of elements from older ASML machines on secondary markets has allowed China to construct a home prototype, with the authorities setting a objective of manufacturing working chips on the prototype by 2028, in accordance to the two folks.
But these shut to the mission say a extra real looking goal is 2030, which continues to be years sooner than the decade that analysts believed it might take China to match the West on chips.
Chinese authorities didn’t reply to requests for remark.
The breakthrough marks the end result of a six-year authorities initiative to obtain semiconductor self-sufficiency, one in all President Xi Jinping’s highest priorities. While China’s semiconductor targets have been public, the Shenzhen EUV mission has been performed in secret, in accordance to the folks.
The mission falls below the nation’s semiconductor technique, which state media has recognized as being run by Xi Jinping confidant Ding Xuexiang, who heads the Communist Party’s Central Science and Technology Commission.
Chinese electronics big Huawei performs a key position coordinating an online of corporations and state analysis institutes throughout the nation involving hundreds of engineers, in accordance to the two folks and a 3rd supply.
The folks described it as China’s model of the Manhattan Project, the U.S. wartime effort to develop the atomic bomb.
“The aim is for China to eventually be able to make advanced chips on machines that are entirely China-made,” one in all the folks mentioned. “China wants the United States 100% kicked out of its supply chains.”
Huawei, the State Council of China, the Chinese Embassy in Washington, and China’s Ministry of Industry and Information Technology didn’t reply to requests for remark.
Until now, just one firm has mastered EUV know-how: ASML, headquartered in Veldhoven, Netherlands. Its machines, which value round $250 million, are indispensable for manufacturing the most superior chips designed by corporations like Nvidia and AMD—and produced by chipmakers resembling TSMC, Intel, and Samsung.
ASML built its first working prototype of EUV know-how in 2001, and instructed Reuters it took practically 20 years and billions of euros in R&D spending earlier than it produced its first commercially-available chips in 2019.
“It makes sense that companies would want to replicate our technology, but doing so is no small feat,” ASML instructed Reuters in an announcement.
ASML’s EUV techniques are at present accessible to U.S. allies together with Taiwan, South Korea, and Japan.
Starting in 2018, the United States started pressuring the Netherlands to block ASML from promoting EUV techniques to China. The restrictions expanded in 2022, when the Biden administration imposed sweeping export controls designed to minimize off China’s entry to superior semiconductor know-how. No EUV system has ever been bought to a buyer in China, ASML instructed Reuters.
The controls focused not simply EUV techniques but additionally older deep ultraviolet (DUV) lithography machines that produce less-advanced chips like Huawei’s, aiming to preserve China at the least a technology behind in chipmaking capabilities.
The U.S. State Department mentioned the Trump Administration has strengthened enforcement of export controls on superior semiconductor manufacturing tools and is working with companions “to close loopholes as technology advances.”
The Dutch Ministry of Defence said the Netherlands is developing policies requiring “knowledge institutions” to perform personnel screenings to prevent access to sensitive technology “by individuals that have ill intentions or who are at risk of being pressured.”
Export restrictions have slowed China’s progress toward semiconductor self-sufficiency for years, and constrained advanced chip production at Huawei, the two people and a third person said.
The sources spoke on condition they not be identified due to the confidentiality of the project.
CHINA’S MANHATTAN PROJECT
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, according to one of the people, who was familiar with his recruitment.
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, the person said. Another person independently confirmed that recruits were given fake IDs to conceal their identities from other workers inside the secure facility.
The guidance was clear, the two people said: 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, the people said.
Two current ASML employees of Chinese nationality in the Netherlands told Reuters they have been approached by recruiters from Huawei since at least 2020.
Huawei did not respond to requests for comment.
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, according to court documents.
ASML told Reuters that it “vigilantly guards” trade secrets and confidential information.
“While ASML can not management or limit the place former workers work, all workers are sure by the confidentiality clauses in their contracts,” the company said, and it has “efficiently pursued authorized motion in response to the theft of commerce secrets and techniques.”
Reuters was unable to decide if any authorized actions have been taken towards former ASML workers concerned in China’s lithography program.
The firm mentioned it safeguards EUV data by making certain solely choose workers can entry the info even inside the firm.
The ASML veterans made the breakthrough in Shenzhen possible, the people said. Without their intimate knowledge of the technology, reverse-engineering the machines would have been nearly impossible.
Their recruitment was part of an aggressive drive China launched in 2019 for semiconductor experts working abroad, offering signing bonuses that started at 3 million to 5 million yuan ($420,000 to $700,000) and home-purchase subsidies, according to a Reuters review of government policy documents.
Recruits included Lin Nan, ASML’s former head of light source technology, whose team at the Chinese Academy of Sciences’ Shanghai Institute of Optics has filed eight patents on EUV light sources in 18 months, according to patent filings.
The Shanghai Institute of Optics and Fine Mechanics did not respond to requests for comment. Lin could not be reached for comment.
Two additional people familiar with China’s recruitment efforts said some naturalized citizens of other countries were given Chinese passports and allowed to maintain dual citizenship.
China officially prohibits dual citizenship and did not answer questions on issuing passports.
Chinese authorities did not respond to requests for comment.
INSIDE CHINA’S EUV FAB
ASML’s most advanced EUV systems are roughly the size of a school bus, and weigh 180 tons. After failed attempts to replicate its size, the prototype inside the Shenzhen lab became many times larger to improve its power, according to the two people.
The Chinese prototype is crude compared to ASML’s machines but operational enough for testing, the people said.
China’s prototype lags behind ASML’s machines largely because researchers have struggled to obtain optical systems like those from Germany’s Carl Zeiss AG, one of ASML’s key suppliers, the two people said.
Zeiss declined to comment.
The machines fire lasers at molten tin 50,000 times per second, generating plasma at 200,000 degrees Celsius. The light is focused using mirrors that take months to produce, according to Zeiss’ website.
China’s top research institutes have played key roles in developing homegrown alternatives, according to the two people.
The Changchun Institute of Optics, Fine Mechanics and Physics at the Chinese Academy of Sciences (CIOMP) achieved a breakthrough in integrating extreme-ultraviolet light into the prototype’s optical system, enabling it to become operational in early 2025, one of the people said, though the optics still require significant refinement.
CIOMP did not respond to requests for comment.
In a March online recruitment call on its website, the institute said it was offering “uncapped” salaries to PhD lithography researchers and research grants worth up to 4 million yuan ($560,000) plus 1 million yuan ($140,000) in personal subsidies.
Jeff Koch, an analyst at research firm SemiAnalysis and a former ASML engineer, said China will have achieved “significant progress” if the “light source has enough power, is reliable, and doesn’t generate too much contamination.”
“No doubt this is technically feasible, it’s just a question of timeline,” he mentioned. “China has the advantage that commercial EUV now exists, so they aren’t starting from zero.”
To get the required elements, China is salvaging elements from older ASML machines and sourcing elements from ASML suppliers by way of secondhand markets, the two folks mentioned.
Networks of middleman corporations are generally used to masks the final purchaser, the folks mentioned.
Export-restricted elements from Japan’s Nikon and Canon are getting used for the prototype, one in all the folks and an extra supply mentioned.
Nikon declined to remark. Canon mentioned it was not conscious of such stories. The Japanese Embassy in Washington didn’t reply to a request for remark.
International banks commonly public sale older semiconductor fabrication tools, the sources mentioned. Auctions in China bought older ASML lithography tools as just lately as October 2025, in accordance to a evaluate of listings on Alibaba Auction, an Alibaba-owned platform.
A staff of round 100 latest college graduates is targeted on reverse-engineering elements from each EUV and DUV lithography machines, in accordance to the folks.
Each employee’s desk is filmed by a person digicam to doc their efforts to disassemble and reassemble elements—work the folks described as key to China’s lithography efforts.
Staffers who efficiently reassemble a element obtain bonuses, the folks mentioned.
HUAWEI SCIENTISTS SLEEP ON-SITE
While the EUV mission is run by the Chinese authorities, Huawei is concerned in each step of the provide chain from chip design and fabrication tools to manufacturing and remaining integration into merchandise like smartphones, in accordance to 4 folks acquainted with Huawei’s operations.
CEO Ren Zhengfei briefs senior Chinese leaders on progress, in accordance to one in all the folks.
The U.S. positioned Huawei on an entity checklist in 2019, banning American corporations from doing enterprise with them and not using a license.
Huawei has deployed workers to places of work, fabrication vegetation, and analysis facilities throughout the nation for the effort. Employees assigned to semiconductor groups usually sleep on-site and are barred from returning house throughout the work week, with cellphone entry restricted for groups dealing with extra delicate duties, in accordance to the folks.
Inside Huawei, few workers know the scope of this work. “The teams are kept isolated from each other to protect the confidentiality of the project,” one in all the folks mentioned. “They don’t know what the other teams work on.”
(This story has been refiled to add Reuters in the dateline)
Reporting by Fanny Potkin in Singapore, further reporting by Alexandra Alper in Washington, modifying by Ken Li and Michael Learmonth
Our Standards: The Thomson Reuters Trust Principles.