In a secret laboratory in Shenzhen, Chinese researchers have built what Washington has long tried to prevent: the prototype of a machine capable of producing the cutting-edge microchips essential to artificial intelligence, modern phones and the weapons that have allowed Western countries to maintain their military dominance.
The prototype, which occupies an entire factory hall, was completed in 2025 and is now in the testing phase. It was built by a team of engineers who previously worked for ASML, the Dutch semiconductor giant, and who used reverse engineering to recreate the Dutch company’s extreme ultraviolet (EUV) lithography systems.
EUV machines are at the center of a technology ‘cold war’. They use beams of extreme ultraviolet light to etch circuits thousands of times thinner than a hair on a semiconductor wafer – a technology that has until now been monopolized by the West. The smaller the circuits, the more powerful the microchips.
The prototype in China is functional and produces extreme ultraviolet rays, but has not yet made any microchips. There are still several major technological hurdles for Beijing to overcome in order to have an alternative to the highly accurate optical systems produced by Western suppliers.
Still, the existence of this prototype shows that Beijing is not “many, many years” away from being able to produce microchips as powerful as those made by Western companies, as ASML chief executive Christophe Fouquet predicted in April.
“China wants the United States 100% out of its supply chains”
The Chinese government said Beijing’s goal is to be able to produce advanced microchips by 2028, according to Reuters. Those familiar with the details of this secret program, nicknamed “China’s Manhattan Project,” said the first concrete results would most likely be seen in the 2030s.
China’s ability to produce its own microchips, without the need for any parts imported from outside the country, is one of Chinese President Xi Jinping’s biggest priorities.
“China’s goal is to eventually be able to make advanced chips with machines that are completely made in China,” said one of the people quoted by Reuters. “China wants the United States 100% out of its supply chains.”
The project would be overseen by Ding Xuexiang, a close associate of Xi who heads the Communist Party’s Central Science and Technology Commission. The Chinese company Huawei plays a key role in coordinating the network of companies and research institutes involved in this project, which includes thousands of engineers.
China is trying to copy the designs produced by Europe’s most valuable technology company
So far, only one company has succeeded in developing EUV technology: the company ASML, based in Veldhoven, the Netherlands. ASML’s EUV systems cost around $250 million and are indispensable to firms such as TSMC, Intel and Samsung, which produce the world’s best-performing microchips designed by companies such as Nvidia and AMD.
AMSL built its first working prototype using EUV technology in 2001, but produced its first commercial chips only in 2019, after spending billions of euros in research and development.
ASML’s EUV systems are now available to US allies, including Taiwan, South Korea and Japan. Starting in 2018, Washington began pressuring the Netherlands to block the export of the systems to China.
No EUV system has ever been sold to a customer in China, according to ASML. The US restrictions have significantly slowed China’s progress to develop its own microchips and affected Huawei’s production of high-performance chips.
Hundreds of thousands of dollars in bonuses for Chinese engineers who worked at ASML
Former ASML engineers recruited by China were instructed to use false names at work to best protect the secrecy of the activities carried out in the Shenzhen EUV project.
They used fake IDs to hide their real identities even from some of their colleagues with whom they worked in the same lab. No one outside the compound was supposed to know what was being built here, nor who was working inside.
The team includes Chinese-born engineers and researchers who worked for ASML and have recently retired – they are the main target of recruiters.
The Dutch intelligence services warned in a report published in April that Beijing “used extensive espionage programs in an attempt to obtain advanced technology and knowledge from Western countries”, including by recruiting “researchers and employees of high-tech companies” from Western countries.
Without ASML veterans recruited by China, reverse-engineering the Shenzhen prototype would have been nearly impossible, according to Reuters sources. China offered semiconductor experts signing bonuses of up to $700,000 and housing subsidies.
ASML’s most advanced EUV systems are the size of a school bus and weigh 180 tons. After several failed attempts to copy the original model, Chinese engineers had to increase the size of the prototype in Shenzhen to improve its performance.
The Chinese prototype is far inferior to the ASML systems, but works well enough to be tested.
The main reason the Chinese prototype is weaker than the machines it tries to copy is that the researchers were unable to obtain the necessary optical systems, such as those from German manufacturer Carl Zeiss AG, one of ASML’s major suppliers.
Editor: Raul Nețoiu
