A company supported by the Chinese government has started production of immersion deep ultraviolet (DUV) lithography equipment for semiconductor manufacturing, leading to a sharp decline in global semiconductor equipment stocks. Concerns over China's progress in localizing semiconductor equipment have dampened investor sentiment.
Bloomberg reported on July 27, citing the U.S. IT media outlet The Information, that a Shanghai-based Chinese company has begun producing its own immersion DUV lithography equipment. The name of the company has not been disclosed.
Lithography equipment is essential for etching intricate circuits onto semiconductor wafers, which serve as the foundation for chips. Immersion DUV technology uses water between the lens and the wafer to create more precise circuits, with Dutch company ASML currently leading the market.
The Chinese company aims to produce five units this year and 20 units next year. The initial production is expected to be supplied to major Chinese foundry Semiconductor Manufacturing International Corporation (SMIC), Huahong Semiconductor, and DRAM manufacturer ChangXin Memory Technologies (CXMT).
However, the Chinese-made equipment is still in the early stages of production and reportedly does not yet match the performance and reliability of ASML's products. Considering that ASML shipped 131 immersion DUV units last year, the production scale of the Chinese company remains limited.
Market observers are focusing on the fact that China has begun producing advanced lithography equipment independently, rather than the scale of production. On the same day, ASML's stock fell 8.4% on the Dutch stock exchange, while ASM International dropped 7.3% and BE Semiconductor declined 9.9%. In the U.S. market, Applied Materials fell 6.7% and Lam Research dropped 7.9%.
China is unable to import ASML's cutting-edge extreme ultraviolet (EUV) lithography equipment due to U.S.-led export controls. High-performance immersion DUV equipment is also subject to export permits from the Dutch government. As a result, China is pushing for the localization of key semiconductor equipment, including lithography machines.
* This article has been translated by AI.
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