China's Chipmaking Tools Match ASML's 2004 Level, UBS Says

UBS's assessment that China's chipmaking tools are at ASML's 2004 level, while seemingly a significant lag, also points to rapid progress given the country's relatively recent, concentrated efforts. The forecast for mass production of immersion DUV lithography machines within two to five years is a tangible near-term milestone. This capability, though less advanced than EUV, is critical for a wide range of chip manufacturing and could substantially reduce China's reliance on foreign DUV imports, impacting ASML's DUV sales in China, one of its largest markets. The real story for Asia is not just the technological gap but the strategic implications of China's accelerated DUV self-sufficiency. While Chinese-made tools are unlikely to be used outside China due to yield and throughput concerns, their domestic deployment will strengthen the local supply chain. The 344 billion yuan from the Big Fund underscores the national commitment, and the focus on SMIC, CXMT, and YMTC suggests a coordinated effort to build out a comprehensive domestic chip ecosystem, even if it remains behind the cutting edge for now.