Dutch technology company ASML is a single player in the industry with its own Extreme Ultraviolet (EUV) Lithography machines used for advanced chip production. These machines enable complex circuit patterns to be engraved on silicon wafers with lines thinner than a human hair. The company’s latest product, High-NA EUV machines, enables the production of more complex circuits and allows the development of more advanced chipsets.
ASML CEO Christophe Fouquet stated that SMIC, one of China’s largest foundries, and technology giant Huawei managed to produce 5G-supported 7nm chips despite US sanctions, and found the progress of these companies impressive. However, Fouquet emphasized that China still faces major obstacles in advanced chip production. In particular, China’s chip production lags far behind Western competitors due to restrictions on access to EUV machines.
According to Fouquet’s interview with NRC, China’s largest foundry, SMIC, is 10-15 years behind the West because it does not have access to EUV machines. SMIC can produce with old generation DUV (Deep Ultraviolet) Lithography machines. However, the chips produced with these machines remain quite primitive compared to the 3nm technology used by leading companies such as TSMC and Samsung Foundry. While TSMC and Samsung Foundry are expected to start mass production of 2nm chips in 2024, China has difficulty accessing these technologies.
Although SMIC and Huawei aim to develop their own lithography machines, it is estimated that this process may take 10-15 years to complete. By the time China develops EUV technology on its own, foundries in the West will be producing more sophisticated chips with much higher-generation machines.
China can purchase DUV machines from ASML and requests the maintenance of these machines from ASML. However, the US is trying to ensure that ASML does not provide repair services on DUV machines in China. Despite this, ASML is determined to continue providing this service. If the company leaves the maintenance of these machines to Chinese companies, there is a risk that China will access sensitive information about these technologies and produce copies.
ASML has a significant business volume in the Chinese market
ASML has a significant business volume in the Chinese market. The company is pursuing a careful strategy in maintaining its services for DUV machines to prevent Chinese companies from producing copies of its machines. In addition, China’s need for EUV machines in chip production remains one of the biggest obstacles to closing the technological gap with the West.