China's Chipmakers Stockpile ASML Tools for Three-Year Buffer as Huawei Coordinates Domestic DUV Push

Chinese memory chipmakers CXMT and YMTC have acquired sufficient ASML deep-ultraviolet (DUV) immersion lithography machines to cover their capacity expansion plans for the next three years, according to multiple reports citing industry sources. This stockpiling provides a critical buffer against tightening Western export controls on advanced semiconductor equipment.

At the same time, Huawei has assumed a coordinating role in China's efforts to develop indigenous DUV scanners, investing across the supply chain and facilitating the integration of domestic tools into fabs such as SMIC. Central to this initiative is Shanghai-based Yuliangsheng, which is on track to produce 12 advanced DUV machines by the end of 2026. These tools are currently undergoing testing at SMIC and on Huawei's own lines, initially targeting 28nm processes with multi-patterning techniques enabling 7nm-class chips for AI accelerators.

The Yuliangsheng scanners reportedly rely on projection lenses from Germany's Zeiss—sourced potentially via secondary markets—highlighting persistent dependencies even as localization advances. This dual-track strategy—stockpiling foreign tools while accelerating domestic alternatives—underscores a major evolution in China's semiconductor self-sufficiency drive amid ongoing U.S.-led sanctions that have blocked access to EUV systems since 2019.

The approach buys time for Chinese AI chip production, including Huawei's Ascend series, even as open-weight models from Chinese labs gain traction globally. However, domestic tools remain several generations behind ASML in throughput and maturity, with commercial adoption still limited. Broader implications include sustained pressure on global supply chains, potential erosion of ASML's China revenue share over time, and challenges for export control regimes seeking to maintain technological leads.