A big number, a bigger ambition: China’s latest semiconductor fund totals $47.5 billion—not $37 billion—signaling Beijing’s intent to accelerate self-sufficiency in lithography and chipmaking.
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A High-Stakes Power Play In The Tech World
Microchips drive everything from AI to defense. China’s new package is designed to reduce reliance on foreign suppliers and insulate development from Western export controls.¹
SMIC And ASML: Rivals In A Global Tech Showdown
SMIC manufactures chips; ASML builds the critical tools. Europe’s crown jewel is ASML’s EUV lithography, while the Dutch government—aligned with Washington—has blocked sales of EUV and restricted some advanced DUV models to China.²
Did you know?
EUV stands for Extreme Ultraviolet—a wavelength 14 times shorter than deep ultraviolet light, allowing circuits thinner than a strand of DNA.
Building An Alternative To Europe’s Crown Jewel
China’s plan includes domestic lithography. But today, its top supplier, SMEE, produces scanners at roughly the 90 nm node, far from ASML’s EUV class.³
Huawei’s Headline-Grabbing Phone Wasn’t Just A Phone
Huawei’s Mate 60 Pro carried the Kirin 9000S, fabricated at about 7 nm. Analysts found it was made with DUV workarounds, proving ingenuity but not parity with EUV technology.⁴
Meanwhile, ASML Is Pushing The Tech Envelope
ASML is rolling out High-NA EUV systems, such as the TWINSCAN EXE:5200B, built for sub-2 nm chips and advanced memory. This keeps Europe ahead, even as geopolitics limit access.⁵
Did you know?
High-NA (High Numerical Aperture) improves resolution and can cut the number of lithography passes, saving both time and cost.
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It’s Not Just About Chips. It’s About Power.
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What This Investment Really Means
China’s $47.5 billion move signals ambition but doesn’t erase Europe’s tool monopoly overnight. ASML still holds the chokepoint; Huawei/SMIC proved workarounds at 7 nm; and SMEE’s lag shows how hard EUV breakthroughs remain.
Footnotes
- Reuters — “China sets up third fund with $47.5 bln to boost semiconductor industry”: https://www.reuters.com/technology/china-sets-up-475-bln-state-fund-boost-semiconductor-industry-2024-05-27/
- Reuters — “Dutch government says China seeks military advantage from ASML tools”: https://www.reuters.com/technology/dutch-government-says-china-seeks-military-advantage-asml-tools-2024-02-19/
- Reuters — “How China’s chip equipment manufacturing sector stacks up”: https://www.reuters.com/world/china/how-chinas-chip-equipment-manufacturing-sector-stacks-up-2025-05-13/
- Reuters — “Teardown of Huawei’s new phone shows China’s chip breakthrough”: https://www.reuters.com/technology/teardown-huaweis-new-phone-shows-chinas-chip-breakthrough-2023-09-04/
- ASML — “TWINSCAN EXE:5200B (High-NA EUV)”: https://www.asml.com/products/euv-lithography-systems/twinscan-exe-5200b