China's domestically developed DUV chip machine has been named: Shanghai Aishengna.

      The state-owned enterprise central to China's latest initiative in chipmaking has been named. On Tuesday, Reuters reported that Shanghai Aishengna Electronic Technology Group, a relatively unknown state-owned entity, is spearheading the mass production of domestically developed immersion deep-ultraviolet (DUV) lithography machines, as per an anonymous source due to the sensitive nature of the topic.

      The company is believed to have developed its program by integrating teams from several of China's leading lithography startups. The Information first reported on Monday that an unnamed state-supported Shanghai company had begun the manufacturing of the machines, an announcement that was enough to drop ASML's shares by more than 8% at one point on that same day.

      Reuters is the first to reveal the company's name, which is significant as immersion DUV has been a market segment dominated by ASML for many years, and China's initiative to establish this capability domestically is a direct reaction to export restrictions that have kept the best tools from the Dutch firm out of the country. Aishengna is not well-known, and Reuters notes that its recruitment of staff from established companies reflects a typical approach in China's chip industry, where the state consolidates fragmented efforts to create a single national leader.

      Previous reports on China’s DUV advancements mentioned a different Shanghai firm, Yuliangsheng, whose scanner SMIC was said to have tested last year and may now be part of the current initiative.

      To clarify the function of the machine: deep-ultraviolet lithography is essential for printing circuit patterns onto silicon, and the immersion version utilizes a thin layer of water between the lens and the wafer, allowing it to engrave finer features. This technology is a generation behind extreme-ultraviolet (EUV) lithography, a much more sophisticated method that only ASML produces and from which China has been barred from purchasing. While DUV does not compete with EUV for the most advanced chips, when combined with a technique called multi-patterning, it can still achieve relatively advanced nodes, as evidenced by SMIC's ability to produce 7nm processors without any EUV.

      However, multi-patterning is slower, more expensive, and typically results in lower yields, so it serves as a workaround rather than a direct replacement.

      The limitations are significant, and Reuters's source emphasized these points. Aishengna's machine is anticipated to require further testing and remains far from rivaling ASML’s models, thus it does not pose an immediate commercial threat to a company that still provides the majority of the world's advanced lithography.

      This account relies on sources rather than official statements, and none of the companies involved have verified it publicly.

      If successful, a domestic production line would provide China with a safeguard. Domestic DUV would offer the nation's chip manufacturers an alternative source of equipment in case Western governments impose stricter regulations, either through outright export bans or by limiting servicing for existing foreign machinery.

      According to The Information, citing two individuals, the initial units are expected to be delivered this year to prominent Chinese manufacturers, including SMIC, Hua Hong Semiconductor, and ChangXin Memory Technologies, a memory-chip producer.

      China's efforts for self-sufficiency in silicon have already altered how it designs AI chips, with lithography representing a more complex and strategic challenge.

      For Beijing, the symbolism is significant; semiconductor self-reliance is among Xi Jinping’s top priorities, and lithography has been the most persistent gap in the nation's supply chain. ASML, whose stock has since stabilized, did not immediately respond to a request for comment, nor did SMIC, Hua Hong, or CXMT.