China begins in-house production of immersion DUV lithography equipment despite U.S. export controls… How long to close the technology gap with ASML? - 경향신문

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A worker at Intel's semiconductor plant in Oregon, United States, looks into an ASLM semiconductor lithography machine on April 18./ Reuters Yonhap News

With news that China will mass-produce immersion deep ultraviolet (DUV) lithography equipment it developed on its own, attention is focusing on the potential impact on the global semiconductor industry. Although it will not affect the market immediately, some assess that China has found a breakthrough while its semiconductor technology is under U.S. export controls on advanced chipmaking equipment.

Singapore outlet Lianhe Zaobao reported on the 29th, citing experts, that China's mass production of immersion DUV semiconductors is news showing that the United States' China-containment policy, the ‘high fence in the backyard’ strategy, has failed. Pu Fangchen, a professor at Singapore Management University, said, “If this news is true, it will be a groundbreaking breakthrough for China in solving key technological challenges and overcoming the U.S. attempts to pressure China.” However, he added, “The new equipment must undergo multiple tests and will need quality improvements, and it will take 3-4 years to catch up with ASML.”

Zhang Pan, co-founder of Advantage Research Consulting, said, “China's first-generation DUV is not as good as ASML's existing products, but the foundation has been laid, so the products can be improved,” adding, “It is only a matter of time before China breaks through the 7-nanometer technology.” JP Morgan analysts wrote in a report that meaningful mass production would be possible only after China's related companies secure yield, accuracy, throughput, and reliability.

Bloomberg reported that China's DUV equipment still imports some key components from Japan, so it will take longer. Masahiro Wakasugi of Bloomberg Intelligence predicted that it could take 7 to 10 years for China to fully close the technology gap with ASML, and even longer to replace foreign-made equipment.

Some also expect that, while China is delayed in replacing certain parts, ASML patent infringement lawsuits and additional U.S. export controls could slow China's production of lithography equipment.

Reuters reported on the 28th that the state-owned Aisengna Electronic Technology Group (Aisengna) in Shanghai has recently begun mass production of immersion DUV lithography equipment and plans to ship five units this year. On the 27th, U.S. tech outlet The Information reported that a state-owned company in Shanghai plans to produce five immersion DUV lithography machines this year and 20 next year, and to supply them to Chinese chipmakers such as Hua Hong and CXMT.

Lithography equipment uses light to draw fine circuit patterns on the surface of a wafer in semiconductor manufacturing. Depending on circuit line width, it is divided into EUV and DUV. DUV has lower resolution than EUV but is necessary for producing semiconductors used in automobiles, home appliances, and medical devices. Immersion DUV goes a step further by filling water between the lens and the wafer to increase resolution.

After U.S. semiconductor export controls prevented China from importing ASML's latest and most advanced lithography machines, China developed immersion DUV systems. EUV tools are also under development, but they are reportedly still at the prototype stage.

On the 28th (local time), ASML's share price fell 11% from two days earlier, closing at the lowest level since early June. The share price of Japan's Lasertec, which supplies materials to ASML, fell 14% from the previous day, and Nikon, once a rival to ASML and now a maker of low-cost lithography tools, also fell 11%.