Chipmaker SMIC Scores Breakthrough in Lithography Technology

Shanghai Micro Electronics Equipment Group Co. (SMEE) has made progress in developing its chipmaking equipment to overcome US chip sanctions. A major shareholder, Zhangjiang Group, announced on WeChat Tuesday that SMEE has successfully built a lithography machine capable of producing 28-nanometer (nm) chips.

The production of 28nm chips remains the backbone of mass-market electronics, including smartphones, electric vehicles, and industrial machinery. However, Chinese lithography technology significantly lagged behind global leaders, leaving the country reliant on foreign suppliers like ASML Holding.

Late last year, the U.S. Department of Commerce placed SMEE on its Entity List, restricting its access to American technology to impede China's ambitions of building a leading-edge chip industry that could rival the U.S.

Prior to the blacklisting, China had relied heavily on Dutch company ASML's advanced Extreme Ultraviolet (EUV) lithography machines for producing the most sophisticated chips. However, under pressure from the U.S., Dutch authorities withheld export licenses for its machines to China.

As a result, China has been pouring resources into developing its own domestic EUV technology. While these efforts are still in their early stages, the recent reported breakthrough in building a 28nm lithography machine suggests progress is being made.

Analysts expect that these recent advancements by SMEE can close the distance between China and the frontrunner in lithography technology, ASML. While China was previously 20 years behind, this breakthrough could accelerate its progress as 28nm chips remain crucial for mass-market electronics, paving the way for self-sufficiency in essential components like those found in smartphones and EVs.