Despite recent advancements by Chinese semiconductor companies like SMIC and Huawei, China remains 10 to 15 years behind global leaders such as Intel, TSMC, and Samsung, according to Christophe Fouquet, CEO of ASML, a leading provider of lithography equipment. Fouquet highlighted that even with access to advanced deep ultraviolet (DUV) lithography tools, China struggles to achieve the efficiency and sophistication of its international competitors, largely due to restrictions on critical extreme ultraviolet (EUV) technology.
Export Restrictions Hamper China’s Progress
In an interview with NRC, Fouquet explained that limitations on EUV exports to China are a significant factor in the country’s technological lag. “By banning the export of EUV, China will lag 10 to 15 years behind the West,” he said. EUV lithography tools are essential for producing cutting-edge semiconductor chips at scales smaller than 7 nanometers, but U.S. sanctions, supported by the Wassenaar Arrangement, prevent ASML from selling these tools to Chinese companies.
While ASML has continued to supply advanced DUV systems, such as the Twinscan NXT:2000i, to Chinese manufacturers, these tools are less capable of supporting state-of-the-art chip production. Chinese firms like SMIC have managed to use DUV technology to produce 7nm-class chips for companies like Huawei, helping them weather U.S. sanctions. However, they remain unable to compete with the likes of TSMC and Samsung in terms of cost-effectiveness and technological refinement.
China’s Pursuit of Domestic Lithography Solutions
Recognizing the unavailability of EUV tools, Chinese companies, including Huawei, are actively pursuing the development of their own lithography technology. However, building a viable EUV ecosystem is a long-term endeavor. Fouquet noted that it took ASML and its partners more than 20 years to bring EUV technology from initial research to commercial maturity. Although Chinese firms can build on publicly available research from the 1990s, it will likely take 10 to 15 years before they can produce their own low-numerical-aperture (Low-NA) EUV tools. By that time, the global semiconductor industry is expected to have progressed to high-numerical-aperture (High-NA) and even hyper-numerical-aperture (Hyper-NA) EUV systems, further widening the gap.
Risks of Technology Replication
Fouquet expressed concern not only about China’s long-term EUV ambitions but also about the potential for Chinese companies to replicate ASML’s existing DUV technology. Advanced DUV systems, such as the Twinscan NXT:2000i, are vital for manufacturing chips at current technology nodes, and unauthorized duplication could pose a significant competitive threat.
The U.S. government has urged ASML to halt maintenance and repairs on its DUV machines in China, aiming to align these services with existing sanctions. However, the Dutch government has not yet complied with these demands. ASML seeks to maintain control over its machines in China to reduce the risk of intellectual property theft, which could occur if Chinese firms take over maintenance tasks.
ASML’s Role in China’s Semiconductor Industry
Despite geopolitical tensions, ASML continues to earn significant revenue from Chinese clients, selling billions of euros worth of DUV lithography tools to companies like SMIC, Hua Hong, and YMTC. However, the future of this relationship is uncertain. If Chinese manufacturers succeed in developing or replicating lithography tools, they could reduce dependence on ASML while potentially competing with the company in international markets.
Although it is unlikely that Chinese firms will replicate advanced tools like the Twinscan NXT:2000i in the near term, simpler lithography systems could be developed or copied more readily. Such developments would mark a significant shift in the competitive landscape of the semiconductor industry.
For now, ASML remains a critical player in China’s semiconductor manufacturing ecosystem, but the ongoing technological and geopolitical dynamics could reshape the industry’s future trajectory.
