China’s secret project brings it closer to independence in advanced chipmaking

China has quietly developed a prototype of a critical machine used to manufacture the world’s most advanced semiconductor chips, a breakthrough that could significantly narrow the technological gap with the West and reshape the global race for artificial intelligence and military-grade technology.

According to a Reuters investigation, Chinese scientists completed a prototype extreme ultraviolet (EUV) lithography machine in early 2025 at a high-security facility in Shenzhen. EUV machines are essential for producing cutting-edge chips used in artificial intelligence, smartphones and advanced weapons systems — a capability long dominated by Western companies.

The prototype is currently undergoing testing and has successfully generated extreme ultraviolet light, a key technical milestone. However, it has not yet produced functional chips. While Chinese authorities are targeting 2028 for initial chip production, sources familiar with the project say 2030 is a more realistic timeframe.

The effort is part of a six-year government-backed push to achieve semiconductor self-sufficiency, one of President Xi Jinping’s top strategic priorities. People involved in the program have compared it to the United States’ Manhattan Project, citing its scale, secrecy and national-security importance.

Former engineers from Dutch chip-equipment maker ASML — the world’s only producer of commercial EUV machines — played a key role in building the prototype, according to sources. Many reportedly worked under aliases, and access to the project was tightly controlled. ASML has said replicating its technology is extremely difficult and that it actively protects its intellectual property.

Chinese technology giant Huawei is said to coordinate much of the effort, linking state research institutes, equipment suppliers and manufacturing facilities across the country. To assemble the machine, China has relied on domestic research, components from older lithography tools and parts sourced through secondary markets, despite sweeping U.S. and allied export controls.

Experts caution that major challenges remain, particularly in precision optics and system reliability. Still, the existence of a working prototype suggests China may be closer to producing advanced chips independently than Western analysts previously believed.

If successful, the project could weaken the impact of export restrictions and mark a turning point in the global semiconductor and technology rivalry.