In a guarded lab in Shenzhen, China has taken a step it was never supposed to reach this soon.
Behind locked doors, scientists have built a prototype machine for making the world’s most advanced chips, a development that could reshape the global tech standoff.
According to Reuters, the prototype is an extreme ultraviolet (EUV) lithography machine, a factory-sized system used to make cutting-edge semiconductors for AI, smartphones, and advanced weapons.
The machine was completed in early 2025 and is now being tested. Sources told Reuters it can successfully generate extreme ultraviolet light, the most challenging part of EUV technology, but “has not yet produced working chips.”
Until now, only one company in the world has mastered EUV systems: ASML of the Netherlands. Reuters reports this is China’s most serious attempt yet to crack a technology long dominated by the West.
Why EUV matters
EUV machines sit at the heart of modern chipmaking. They etch circuits thousands of times thinner than a human hair onto silicon wafers. Smaller circuits mean faster, more powerful chips.
ASML’s EUV machines cost about $250 million each, weigh around 180 tons, and took nearly two decades to perfect before commercial use in 2019, the company told Reuters. Because of their strategic value, no EUV machine has ever been sold to China, ASML said.
A project run in secret
According to Reuters, China’s EUV prototype was developed by a team that included former ASML engineers who reverse-engineered key parts of the Dutch company’s machines. Sources said engineers worked under false names inside the secure Shenzhen compound to maintain secrecy.
One person familiar with the recruitment said the project was classified under national security rules, with strict instructions that no one outside the facility should know what was being built or who was involved.
“The aim is for China to eventually be able to make advanced chips on machines that are entirely China-made,” one person familiar with the project told Reuters. “China wants the United States 100% kicked out of its supply chains.”
Reuters reports that the effort is part of a six-year government drive to achieve semiconductor self-sufficiency, a top priority for President Xi Jinping. State media has identified the strategy as overseen by Ding Xuexiang, a close ally of Xi and head of the Communist Party’s Central Science and Technology Commission.
Huawei’s central role
Huawei plays a key coordinating role across the project, linking chip design, manufacturing equipment, and final products, according to Reuters.
Employees assigned to semiconductor teams often sleep on-site during the workweek and have restricted phone access. Inside the company, teams are kept isolated to protect secrecy. “The teams are kept isolated from each other to protect the confidentiality of the project,” one person told Reuters. “They don’t know what the other teams work on.”
Can they actually build the chips?
While the prototype is a massive win for Beijing, it isn’t perfect. Since China can’t buy new EUV parts, it is salvaging parts from older machines and buying components on secondary markets through middlemen to hide the trail.
The machine is currently “crude” compared to Western tech. One of the biggest hurdles remains the mirrors. Currently, only Germany’s Zeiss can make the ultra-precise mirrors needed, and China is struggling to copy that level of detail.
Reuters notes that while China hopes to have working chips by 2028, a more realistic date is 2030. Even so, that is years faster than the “many, many years” ASML’s CEO predicted just last April.
To learn more about a separate Nvidia dispute tied to China chip controls, see TechRepublic’s report on DeepSeek smuggling claims.
