By Jin Yan, Vision Times
As 2025 draws to a close, a Reuters investigative report has revealed “secret progress” made by China in the field of extreme ultraviolet (EUV) lithography, exposing what analysts describe as a highly classified “Chinese semiconductor version of the Manhattan Project.”
Chinese current-affairs commentator Wen Zhao analyzed the nature of the breakthrough, arguing that while it demonstrates formidable short-term mobilization capacity, it also exposes deep structural weaknesses in ethical boundaries, technological sustainability, and long-term commercial viability.
Commentators Lan Shu and Mark went further, characterizing the project as a “comprehensive, state-level technological war” launched by the Chinese Communist Party (CCP) against the West. They argue that Beijing has fully abandoned international norms and shifted toward an unconstrained form of “unrestricted warfare,” leaving Western systems — built on fairness and mutual benefit — overwhelmingly unprepared.
RELATED: Patriotism No Longer Sells: Why Chinese Consumers Are Turning Away From Huawei
A prototype that shocked the world
Success
You are now signed up for our newsletter
Success
Check your email to complete sign up
According to the report, in a heavily guarded, sealed laboratory in Shenzhen, Chinese research teams successfully assembled an EUV lithography prototype in early 2025. The machine is massive, occupying nearly an entire factory hall, and is currently undergoing high-pressure testing. It has achieved stable EUV light generation and preliminary system operation but remains far from producing commercially usable semiconductor chips.
The prototype’s core technical path relies heavily on reverse engineering, carried out by a group of senior Chinese engineers formerly employed by or retired from ASML in the Netherlands. ASML is the world’s only company capable of producing commercial EUV lithography machines.
ASML’s own development journey underscores the difficulty of the task: from its first experimental prototype in 2001 to stable mass production in 2019, the process took nearly two decades and billions of euros in investment.
Wen Zhao noted that while China entered the race late, it benefited from the accumulated knowledge of mature EUV technology rather than starting from a theoretical vacuum. If breakthroughs can be achieved in key optical systems and light-source stability, he argued, the timeline from prototype to commercial viability could be significantly compressed.
The core of US–China competition
At the heart of the issue lies the strategic confrontation between China and the United States over semiconductor equipment. Washington has long treated a minimum ten-year technological lead over China as a national security red line. Beijing, by contrast, sees rapid catch-up as an existential battle to break what it calls “chokepoint” containment.
RELATED: Japan Pulls Critical Chip Materials from China, Escalating Tech War
According to forecasts by the World Semiconductor Trade Statistics (WSTS), the global semiconductor market is expected to exceed $700 billion in 2025, with chips at 7 nanometers and below accounting for more than 40 percent and rapidly expanding into artificial intelligence, automotive electronics, and high-end consumer devices.
China’s mainstream manufacturing capacity, however, remains largely above 28 nanometers. While it holds significant market share in mid- and low-end chips, analysts warn that without high-end breakthroughs, China will struggle to compete sustainably in AI-driven computing races.
Chinese President Xi Jinping’s elevation of semiconductor self-sufficiency to the highest national priority, and his personal oversight of the project, reflects this strategic anxiety. Lan Shu and Mark argue that the CCP has fully embraced a “zero-sum war mindset,” viewing global competition as a life-or-death struggle, while the West remains constrained by a “rules-based, win-win” paradigm.
‘Dig, steal, dismantle, buy’
The project officially began in 2019 under the direct leadership of Ding Xuexiang, a close Xi Jinping ally and head of the Central Science and Technology Commission, which now reports directly to the CCP General Secretary. Huawei coordinates thousands of engineers nationwide, with virtually unlimited resources. Insiders have likened the initiative to a “Chinese Manhattan Project,” aimed at producing advanced chips using fully domestic equipment and excluding the United States from China’s supply chain.
Wen Zhao summarized China’s approach with four words: “dig, steal, dismantle, buy.”
“Dig talent:” Offering massive signing bonuses of 3–5 million yuan, housing subsidies, and even tolerance for dual citizenship to recruit ethnic Chinese ASML engineers. Reuters cited Lin Nan, whose team at the Chinese Academy of Sciences’ Shanghai Institute of Optics applied for eight EUV-related patents in just 18 months. Lan Shu and Mark added that coercion of family members is sometimes used, an approach “unimaginable under Western ethics and law.”
“Steal technology:” Engineers allegedly carried ASML trade secrets in violation of confidentiality agreements. ASML previously won an $845 million damages judgment against a former Chinese engineer, but enforcement failed after the defendant declared bankruptcy and reportedly received protection from Chinese authorities. Lan Shu and Mark described Huawei as a key orchestrator, calling the activity overtly aggressive and akin to state espionage.
“Dismantle old machines:”Teams of roughly 100 recent graduates reportedly purchased used ASML machines via international auctions, repeatedly disassembling them while recording the process to reconstruct original design logic.
“Buy second-hand parts:” Using intermediaries to acquire ASML supplier components from global secondary markets, including export-restricted parts from Japan’s Nikon and Canon.
Critical bottlenecks
The most formidable challenges remain light-source power and precision optics. Lan Shu and Mark explained that EUV systems require lasers to strike molten tin droplets 50,000 times per second, generating plasma at temperatures up to 200,000 degrees Celsius.
China’s Harbin Institute of Technology, using laser-produced plasma (LPP), has reportedly reached about 100 watts—roughly one-sixth of ASML’s current 600–700-watt output, with further losses during filtration. ASML expects to exceed 1,000 watts within three years.
Optical mirrors are almost entirely monopolized by Germany’s Zeiss, with each mirror composed of 40 nanometer-scale layers. While China’s Changchun Institute of Optics has made initial progress, issues such as tin debris contamination, thermal deformation, and energy loss persist. The prototype’s oversized design supports testing but highlights its early-stage nature.
Even with hardware maturity, lithography systems must integrate tightly with downstream fabs. TSMC’s exclusive success at 2–3 nanometer production depends on proprietary know-how built through continuous feedback loops. Replicating this ecosystem, analysts say, will be extremely difficult.
Meanwhile, electronic design automation (EDA) software remains dominated by U.S. firms. China’s domestic tools handle only lower-end designs, while sub-7-nanometer layouts with billions of transistors still rely heavily on American technology.
A ‘demonstrative breakthrough’ with long-term risks
Wen Zhao’s key assessment is that the breakthrough’s primary value lies in “stabilizing the gap and preventing further widening.” Even if usable chips emerge by 2030, China would still trail ASML by roughly a decade.
He cautioned that Beijing may frame the prototype as a “demonstrative technological declaration,” leveraging publicity to unsettle Western markets and force concessions—a tactic previously used in defense industries. However, Western governments can counter with subsidies, large procurement orders, and coordinated R&D to stabilize markets.
Lan Shu and Mark issued a stark warning: China’s path resembles the Soviet Union’s self-destructive overreach. While copying and theft can accelerate short-term gains, bypassing foundational research weakens long-term resilience — evident, they argue, in China’s persistently low domestic production of advanced medical imaging equipment.
Mass production poses an even deeper challenge. ASML has delivered thousands of machines through a highly internationalized supply chain. For China to produce even 100 stable units, it must either achieve full self-sufficiency, at high inefficiency, or restore international relations, which analysts view as unlikely under current geopolitical conditions.
A warning to the West
Wen Zhao concluded that the state-driven model excels at solving “existence problems” from zero to one, but struggles to sustain long-term commercial profitability and global competitiveness.
Despite differing emphases, Wen Zhao, Lan Shu, and Mark converge on one conclusion: China’s EUV prototype showcases the CCP’s execution power and ambition while exposing ethical risks, fragile supply chains, and systemic limits. The event will also further intensify U.S.–China semiconductor rivalry, with chips increasingly viewed as a core driver of future conflict.
To respond effectively, analysts argue, Western nations must abandon illusions and act with urgency, strengthening talent protection, joint R&D, and risk-sharing mechanisms. While China may make major announcements in 2026, only time and markets will determine whether this “Manhattan Project” delivers real results.
Editorial note: Views expressed in this article are the opinions of the author and do not necessarily reflect the views of Vision Times.
Reuters contributed to this report.
