What we know so far: Inside a tightly guarded research complex in Shenzhen, Chinese scientists have quietly built and begun testing a prototype of what could become the world's most complex chipmaking machine – one capable of producing advanced semiconductors that the US has spent years trying to keep out of China's reach.
People familiar with the project told Reuters that the machine was completed in early 2025 and occupies nearly an entire factory floor. The team behind the effort reportedly includes several former engineers from the Dutch semiconductor company ASML, who reverse-engineered elements of the firm's extreme ultraviolet lithography (EUV) systems.
China's prototype, the people said, is already operational and capable of generating EUV light. While it has yet to produce functioning chips, its mere existence marks a significant leap in Beijing's push for technological self-sufficiency. ASML chief executive Christophe Fouquet said earlier this year that China would need "many, many years" to reach this stage. Shenzhen's breakthrough now suggests that the gap may be narrowing far faster than expected.
The project is part of a six-year national initiative overseen by the Communist Party's Central Science and Technology Commission and led by Ding Xuexiang, a close ally of President Xi Jinping. Within this strategy, Huawei has assumed a coordinating role, linking state-run research institutes with private-sector partners in what several people involved described as a "Manhattan Project" for semiconductors.
The goal, one source said, is to build machines capable of producing advanced chips using only domestic technology, and to eliminate reliance on US-controlled supply chains.
Beijing has set an official target of 2028 to produce working chips on the prototype. However, sources close to the project believe 2030 is a more realistic timeline. The Shenzhen laboratory and its technical details remain classified, and Chinese ministries and Huawei did not respond to requests for comment.
Until now, only US allies in Taiwan, Japan, and South Korea have been permitted to purchase ASML's EUV equipment. Beginning in 2018, Washington pressured the Netherlands to block sales to China. Those restrictions tightened further under the Biden administration in 2022, when sweeping export controls aimed to cut off China's access to advanced semiconductor tools, including ASML's deep ultraviolet (DUV) systems used to manufacture less advanced chips. According to the Dutch Ministry of Defence, new policies now require universities and research institutions to screen foreign personnel for potential risks related to sensitive technologies.
Despite these constraints, China has managed to assemble its own EUV system. Engineers sourced older ASML components through secondary markets and dismantled them for integration into the domestic prototype. Sources said the government-backed effort also draws on parts recovered from used ASML, Nikon, and Canon lithography tools – often purchased at auctions in China via platforms such as Alibaba Auction.
Replicating the optical precision of Western systems remains a significant challenge. ASML's EUV machines rely on mirrors produced by Carl Zeiss, which take months to fabricate and align. China's research institutes, led by the Changchun Institute of Optics, Fine Mechanics and Physics under the Chinese Academy of Sciences, have been developing domestic alternatives.
According to one source, the institute achieved a key milestone in early 2025 by successfully integrating extreme ultraviolet light into a functional optical system, though it still lags several steps behind Zeiss in terms of accuracy and consistency.
Technical hurdles remain formidable. EUV machines operate by firing high-powered lasers at droplets of molten tin up to 50,000 times per second, generating plasma that reaches 200,000 degrees Celsius. The extreme ultraviolet light produced is then reflected through multiple precision mirrors before striking the silicon wafer.
The engineering team behind the Shenzhen project operates under heavy secrecy. According to sources, Chinese-born former ASML staff members were recruited under aliases and issued identification cards with false names. Inside the facility, they were instructed not to reveal their identities, even to colleagues.
One recruit, a veteran ASML engineer, reportedly recognized other former co-workers who were also using assumed names. The effort was classified as a national security project, with workers told that no one outside the facility could know what was being built.
Since 2019, China has run aggressive recruitment campaigns targeting semiconductor specialists overseas. Policy documents reviewed by Reuters indicate signing bonuses ranging from 3 to 5 million yuan (up to $700,000), along with housing subsidies for returning engineers. Among those recruited was Lin Nan, ASML's former head of light source technology, whose Shanghai-based research team has filed eight patents on EUV light sources in just 18 months.
ASML has long struggled to protect its intellectual property. In 2019, the company won an $845 million judgment against a former engineer in a trade secret case, though enforcement proved difficult when the defendant declared bankruptcy and later resumed operations in Beijing with state support.
Inside the Shenzhen laboratory, the prototype is far larger and heavier than ASML's 180-ton EUV system – an intentional design choice to improve light output, according to sources. Approximately 100 young Chinese engineers are assigned to reverse-engineer components from both EUV and DUV machines.
Cameras monitor their workstations to record disassembly and reassembly, and employees reportedly receive performance bonuses for successfully reproducing parts.
Huawei's involvement spans the project's entire supply chain, from R&D to manufacturing integration. Its employees are stationed at fabrication sites nationwide, with some reportedly living on-site during the workweek and having limited phone access. Even within Huawei, few staff members reportedly understand the full scope of the operations.
China may have reverse-engineered an EUV machine, a big step toward chip self-sufficiency
