Inside China’s ‘Manhattan Project’ to rival Western chip power

In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned.

Completed in early 2025 and now undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company's extreme ultraviolet lithography machines or EUVs, according to two people with knowledge of the project.

EUV machines sit at the heart of a technological Cold War. They use beams of extreme ultraviolet light to etch circuits thousands of times thinner than a human hair onto silicon wafers, currently a capability monopolized by the West. The smaller the circuits, the more powerful the chips.

China's machine is operational and successfully generating extreme ultraviolet light, but has not yet produced working chips, the people said.

In April, ASML CEO Christophe Fouquet said that China would need "many, many years" to develop such technology. But the existence of this prototype, reported by Reuters for the first time, suggests China may be years closer to achieving semiconductor independence than analysts anticipated.

Nevertheless, China still faces major technical challenges, particularly in replicating the precision optical systems that Western suppliers produce.

The availability of parts from older ASML machines on secondary markets has allowed China to build a domestic prototype, with the government setting a goal of producing working chips on the prototype by 2028, according to the two people.

The logo of ASML, a leading maker of semiconductor production equipment, hangs on the head office in Veldhoven, the Netherlands, Jan. 30, 2023. (AP Photo)

But those close to the project say a more realistic target is 2030, which is still years earlier than the decade that analysts believed it