China has reportedly started manufacturing domestically developed immersion deep ultraviolet (DUV) lithography machines, marking a significant milestone in the country’s effort to build an independent semiconductor manufacturing ecosystem.

According to reports, the newly developed systems are expected to be delivered later this year to major Chinese semiconductor manufacturers, including Semiconductor Manufacturing International Corporation (SMIC), Hua Hong Semiconductor, and ChangXin Memory Technologies (CXMT).

Immersion DUV lithography systems are among the most important pieces of equipment used in modern semiconductor fabrication. They project intricate circuit patterns onto silicon wafers and enable the production of advanced integrated circuits used in artificial intelligence, high-performance computing, smartphones, and data centers.

For years, the global market for advanced lithography equipment has been dominated by ASML, the Dutch company whose systems are considered essential for manufacturing cutting-edge semiconductors. However, export restrictions have prevented Chinese chipmakers from acquiring the company’s most advanced Extreme Ultraviolet (EUV) lithography machines, increasing pressure on China to develop domestic alternatives.

The reported breakthrough represents an important step toward reducing reliance on foreign semiconductor equipment suppliers. Nevertheless, industry sources indicate that China’s new DUV systems still trail international competitors in terms of performance, precision, reliability, and manufacturing maturity.

Initial production is expected to remain relatively limited, with approximately five immersion DUV machines scheduled for delivery this year and around 20 systems planned for 2027. This suggests that commercial deployment will likely occur gradually while manufacturers continue improving the technology.

China is also continuing research into domestic EUV lithography, although those systems reportedly remain in the prototype stage. EUV technology is required for producing the world’s most advanced semiconductor nodes currently used in leading-edge AI processors.

The development comes as geopolitical tensions continue reshaping the global semiconductor industry. Export controls introduced in recent years have significantly restricted China’s access to advanced chipmaking equipment, prompting major investments in domestic research, manufacturing, and supply chain development.

For Chinese semiconductor companies, access to locally produced lithography equipment could provide greater supply chain resilience and reduce exposure to future trade restrictions. At the same time, international competitors continue to maintain substantial technological advantages built through decades of research and engineering expertise.

The news also had an immediate impact on financial markets, with shares of several companies connected to the global semiconductor equipment supply chain declining as investors evaluated the potential long-term implications for the industry.

Although China’s domestically produced DUV systems are unlikely to replace leading international technologies in the near future, the achievement demonstrates the country’s accelerating progress toward semiconductor self-sufficiency. As artificial intelligence, cloud computing, and advanced electronics continue driving global chip demand, lithography technology remains one of the most strategically important segments of the semiconductor supply chain.