China is making significant strides towards developing an essential tool for the production of advanced semiconductor chips. This development raises concerns among U.S. lawmakers, as it puts China on the path to becoming self-sufficient in semiconductor manufacturing. Currently, China, particularly companies like Huawei, faces challenges producing competitive application processors due to the ban on shipping Extreme Ultraviolet (EUV) lithography machines to Chinese foundries like SMIC, which ranks as the third largest globally, behind TSMC and Samsung Foundry.
EUV lithography machines play a critical role in advancing chip technology from the 10nm process node to the more sophisticated 2nm node. The ability to manufacture chips with smaller feature sizes allows for a higher number of transistors to fit within a chip, enhancing both power and energy efficiency. These machines can print intricate circuitry patterns on silicon wafers with exceptional precision, essential for the production of application processors capable of accommodating billions of transistors.
The only producer of these machines is ASML, a Dutch company that is currently barred from selling to China due to U.S. and Dutch regulations. Despite these restrictions, Chinese companies have continued to use older Deep Ultraviolet (DUV) lithography machines, limiting them to the production of 7nm chips. However, rumors persist about a breakthrough that could enable China to create its own EUV lithography technology.
A team from the Chinese Academy of Sciences, led by Lin Nan, a former head of light source technology at ASML, has reportedly developed a competitive EUV light source platform. If this technology proves successful, it would allow Chinese foundries to print more intricate designs on silicon wafers without resorting to multiple patterning—a complex process that can lead to alignment issues. A self-sufficient EUV capability would relieve China from reliance on U.S. sanctions and significantly bolster its semiconductor industry.
If Huawei can produce a smartphone powered by a 2nm application processor, it would represent a major leap forward for China and render U.S. restrictions ineffective.