China's EUV Breakthrough Signals Shift in Semiconductor Industry

2025-04-29 semicon

Veldhoven, Tuesday, 29 April 2025.
China’s development of a new EUV light source by former ASML scientist Lin Nan challenges ASML’s dominance and could potentially disrupt the global semiconductor market dynamics.

Breakthrough in EUV Technology

In a significant development that challenges previous industry assumptions, Chinese researchers at the Shanghai Institute of Optics and Fine Mechanics have achieved a remarkable breakthrough in EUV light source technology. The team, led by former ASML head of light source technology Lin Nan, has developed a platform that operates at internationally competitive parameters [1][2]. This advancement comes as a direct challenge to ASML CEO Christophe Fouquet’s recent assertion that it would take ‘many, many years’ for China to produce an EUV machine [3].

Technical Achievement and Market Impact

The Chinese team has demonstrated a conversion efficiency of 3.42% in their EUV light source, with theoretical projections suggesting potential improvements up to 6% efficiency [1]. This development is particularly noteworthy as ASML currently dominates the global market, with China accounting for over 25% of ASML’s system sales in Q1 2025 [5]. The timing is crucial, as ASML anticipates U.S. tariffs to continue through 2026, potentially influencing market dynamics [3].

Strategic Implications

Lin Nan’s return to China in 2021 as part of the country’s high-level recruitment drive has proved instrumental in this breakthrough [2]. The development carries significant weight as ASML has been prohibited from selling its most advanced EUV machines to China since 2019 due to U.S. pressure [2]. This restriction, rather than hindering progress, appears to have accelerated Chinese innovation in alternative technologies [1].

Future Outlook

While this breakthrough represents significant progress, industry experts note that building a complete, mass-production-capable photolithography machine requires mastery of multiple components beyond the light source, including precision optics and defect control systems [1]. The semiconductor market is projected to reach $1 trillion by 2030, underlining the strategic importance of this technological advancement [6]. Trial production of Chinese EUV machines is expected by Q3 2025, with mass production planned for 2026 [3] [alert! ‘production timeline based on projections and may be subject to delays’].

Bronnen

ASML EUV