Chinese semiconductor companies are bypassing U.S. and Dutch export restrictions. They are retrofitting older deep ultraviolet (DUV) lithography machines originally sourced from ASML.
Local chip fabs source components from overseas and employ third-party engineering teams. This strategy upgrades the performance of restricted DUV systems already located within China, successfully circumventing ASML’s involvement and official upgrade limitations.
The modifications aim to improve critical metrics, including overlay accuracy and throughput. These technical improvements enable the production of smaller, denser chips necessary for advanced AI applications.
This workaround emerges after ASML had already anticipated a significant decline in its shipments to China next year due to tighter export controls. The effort highlights the resilience of China’s domestic chip manufacturing capabilities despite international sanctions.