A team of engineers, including former ASML employees, completed a prototype extreme ultraviolet lithography machine in early 2025 at a facility in Shenzhen. The machine fills nearly an entire factory floor and is undergoing testing. SMEE (Shanghai Micro Electronics Equipment) received its first commercial order in December 2025.
Lithography is the single most critical bottleneck in semiconductor manufacturing. ASML's EUV machines cost $380M each and take 18 months to build. Only three companies in the world make advanced lithography tools — all of them subject to US-led export controls against China.
The prototype is years behind ASML's production machines in precision and throughput. But it proves the physics works. The path from prototype to production-worthy tool took ASML roughly a decade. Whether China can compress that timeline with massive state investment is the defining question of the chip war.