The state-owned Shanghai Aishengna Electronic Technology Group has begun mass production of immersion DUV lithography machines, with a plan for 5 units in 2026 and 20 in 2027. The first customers will be SMIC, Hua Hong Semiconductor, and CXMT.
Shanghai Aishengna Electronic Technology Group, a Chinese state-owned enterprise established in August 2023 with a registered capital of ¥7 billion, has initiated mass production of locally developed immersion DUV lithography machines. According to Reuters, the company expects to manufacture approximately 5 units in 2026 and around 20 in 2027.
The firm, backed by Shanghai Electric Holding and a subsidiary of Shanghai International Trust, has consolidated the capabilities of Yuliangsheng and Shanghai Micro Electronics Equipment (SMEE) into a single national player. The first identified customers are semiconductor manufacturers SMIC, Hua Hong Semiconductor, and ChangXin Memory Technologies (CXMT).
The source cited by Reuters noted that Aishengna's machines still require further testing and are far from matching equivalent models from ASML, the dominant global supplier of lithography equipment. This does not represent an immediate disruption but rather the first step in a long-term strategy.
Immersion DUV lithography is key for manufacturing chips at advanced nodes, although the cutting edge (EUV) remains dominated by ASML. China is developing this capability internally to achieve technological autonomy in the face of U.S. sanctions that limit access to Western equipment.
The impact on the markets has been noticeable: shares of European lithography equipment suppliers and chip manufacturers fell this Tuesday. However, analysts agree that this does not pose an immediate commercial threat to ASML, whose technology remains superior in precision, performance, and production volume.
For startups that rely on semiconductors, this move has medium-term implications. In 3-5 years, they could gain access to Chinese chip manufacturers that do not depend on ASML equipment, which could reduce costs in certain segments, but also introduces regulatory compliance risks if they operate in markets with restrictions on Chinese technology.
Chinese industrial policy is favouring national champions with vertical integration, opening opportunities in industrial software, specialised materials, automation, metrology, and advanced packaging. Agile startups can compete in these areas without needing the massive capital required to manufacture lithography machines.
The same state support that allows Aishengna to exist could be replicated in other links of the chain, generating subsidised competition for Western startups. Companies operating in hardware, IoT, or edge devices should map their supply chain to document what percentage uses Western equipment versus domestic Chinese, in preparation for future compliance audits.
According to Reuters, Aishengna's production is modest but strategic, reflecting China's political priority of technological autonomy. The coming years will be crucial to assess whether this initiative can close the gap with the global leaders in the sector.
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