Breakthroughs or Boasts? Assessing Recent Chinese Lithography Advancements

The Hangzhou Municipal Government recently announced what it claims is a milestone in China’s push for chipmaking self-sufficiency: the development of its first commercial electron beam lithography machine. Named after Wang Xizhi, a renowned ancient Chinese calligrapher, the machine draws on the parallel between calligraphy and the way lithography “writes” intricate patterns onto silicon wafers. It is now entering application testing, with officials claiming it achieves “a precision of 0.6nm and a line width of 8nm.” 

Chinese media quickly framed the debut as a geopolitical breakthrough: with the invention of Xizhi, China had finally sidestepped U.S. export controls and Dutch company ASML’s near-monopoly on advanced lithography. The story drew little notice in U.S. outlets, which may have spared unnecessary hype, but also reveals gaps in how technical developments are understood. The announcement thus raises questions about both China’s actual capacity to build chipmaking tools and the role of posturing, narrative, and misperception in technology competition.  

AI Supply Chain Underpinnings 

Advanced photolithography is critical to the mass production of cutting-edge semiconductors. It etches the intricate circuits of transistors onto silicon wafers, determining how small and efficient chips become. The most advanced AI systems are only possible because of extreme ultraviolet (EUV) lithography, which uses light to carve features at scales of just a few atoms. EUV is among the most complex engineering achievements in history. Only one company, ASML, has mastered it at scale. 

Among the three key inputs that drive AI progress—data, algorithms, and compute—compute has emerged as a defining constraint. While data quality and algorithmic innovation are important, their value ultimately depends on access to immense computational power. Control over the material resources that enable compute, including EUV lithography machines, has thus become a central axis of geopolitical competition. 

The United States has capitalized on this leverage. Washington has worked with allies in its semiconductor supply chain, including the Netherlands, Taiwan, Japan, and South Korea, to establish sweeping export controls on semiconductor-related exports to China. These measures target not only high-end GPUs but also the tools that produce them, blocking ASML from shipping EUV systems to Chinese foundries. The Trump administration has further called for tightening enforcement and addressing gaps in component-level controls. The intent is to keep China behind in compute capacity to preserve U.S. dominance at the core of the AI supply chain. Against this backdrop, the reported development would represent progress in a sector Washington has worked hard to constrain. 

China’s Lithography Capabilities 

China’s drive for semiconductor self-sufficiency predates U.S. export controls. Recognizing manufacturing tools as a key bottleneck, Beijing prioritized indigenous lithography machines as early as the National Medium- and Long-Term S&T Development Plan, which identified lithography as a strategic technology. Most recently, following the escalation of U.S. export controls, China’s third state-backed semiconductor investment fund has prioritized chipmaking equipment, acknowledging that lithography remains the Achilles’ heel of its semiconductor ambitions. 

Lithography comes in many forms. Tools range from older i-line systems used for legacy chips, to deep ultraviolet (DUV) scanners, to the most advanced EUV systems. Each generation enables smaller and denser transistor features. At the frontier, however, precision alone is not enough; advanced chipmaking also requires high throughput. EUV is the only technology that combines both, which is why it remains indispensable to cutting-edge production. 

China’s most recent lithography breakthrough, the Xizhi machine, uses electron-beam (e-beam) technology. Unlike conventional photolithography, which projects light through a mask to etch patterns onto silicon wafers, e-beam systems are maskless: they draw circuits directly onto the wafer using a focused beam of electrons. This design makes them flexible and relatively quick to adapt to new layouts, since no costly photomask has to be fabricated for each change. 

However, that flexibility comes at the cost of throughput. Because the e-beam process must raster across the wafer point by point—like drawing with a very fine pen—it is far slower than EUV scanners, which can project an entire pattern in a single flash of light. This trade-off confines e-beam to niche roles, such as photomask production, or use in research and prototyping. It remains ill-suited for the high-volume chip production required to power advanced AI systems. 

Additionally, China’s capabilities remain limited in the broader lithography landscape. While domestic firms have made progress in other categories of semiconductor manufacturing equipment, lithography remains the most stubborn bottleneck. The global lithography market is still dominated by ASML in the Netherlands and Nikon in Japan, while China’s leading supplier, Shanghai Micro Electronics Equipment (SMEE), produces only i-line and some DUV tools. SMEE holds its largest share in i-line equipment, which is used for producing legacy chips, but even there its presence amounts to only four percent of the global market. More recently, Huawei-linked Shenzhen SiCarrier Technologies has emerged as another domestic contender, reportedly developing machines for 28nm production and aggressively hiring from foreign peers.  

These efforts have not meaningfully narrowed the gap. Persistent rumors of domestic advances, including claims of 5nm capability, have circulated for years, but have been disproven. China’s much publicized 7nm chips were achieved not through indigenous breakthroughs, but through relying on DUV machines stockpiled from ASML before export restrictions took effect. Such stopgap measures cannot substitute for mastery of EUV systems, which remain firmly out of reach despite massive state investment. 

The Politics of Breakthroughs 

Announcements of Chinese breakthroughs in chipmaking should be treated with caution. They project ambition but do not fundamentally alter the strategic reality for two reasons: the Chinese way of funding R&D, and the dynamics of central–local policy signaling aimed at both internal and external audiences. 

First, China’s approach to technology development often relies on massive injections of state-directed capital with little regard for efficiency. The announcement that China would invest $43 billion into domestic EUV lithography development better follows a model of throwing money against the wall to see what sticks. This funding produces a flurry of projects, but often ends in fragmentation, duplication, and a “rotten tail” problem—where resources get trapped in politically backed but technically unviable ventures. The Xizhi eBeam project is a telling example: heavily advertised, but most likely with limited commercial payoff. 

Second, local governments, universities, and firms have strong incentives to exaggerate their progress. Within the central–local system, positive news functions as a currency for recognition, funding, and bureaucratic survival. Announcing small breakthroughs helps local actors compete for attention in Beijing’s crowded industrial policy ecosystem. This creates a landscape of hyped projects designed less to achieve global leadership than to signal momentum to central authorities. 

Externally, these announcements also serve as strategic messages in U.S.–China tech competition. Their timing often coincides with heightened geopolitical pressure, amplifying their signaling value even if the underlying technology needed to scale AI capabilities remains constrained by chokepoints such as lithography. Huawei’s launch of the Mate 60 Pro, powered by a domestically produced system-on-a-chip, was timed with former Commerce Secretary Gina Raimondo’s visit to China. It was touted as proof of overcoming U.S. export controls, but in reality, the chip’s performance fell short of the hype. Likewise, the release of DeepSeek upon Trump’s inauguration carried the same performative message that China’s semiconductor industry is self-reliant and capable of breaking through U.S. restrictions. 

The announcement of Xizhi and similar projects thereby highlight how breakthroughs function as both technological claims and political currency. Local governments and firms exaggerate achievements to win Beijing’s recognition, while national leaders deploy them to project resilience externally. In fields like AI, where advances are rapid but muddied by opaque technical architectures, China’s signaling strategy thrives on ambiguity, aiming to influence perceptions abroad and consolidate authority at home. 

Remaining Vigilant 

Taken together, these breakthroughs reveal more exaggeration than transformation in terms of leading competitive capabilities, yet they also show that China is making gradual progress in chipmaking. The development of an e-beam lithography system is a genuine step toward advancing domestic R&D, giving top Chinese research institutions access to tools previously out of reach under export controls. What it does not represent, however, is a rival to ASML or the world’s most advanced lithography machines. 

As geopolitical and local incentives align, such announcements will likely multiply. Even since this piece was first drafted, the landscape has shifted: Beijing barred tech firms from purchasing unrestricted Nvidia chips, Huawei unveiled a three-year chip roadmap, and headlines have grown louder in projecting confidence in homegrown capabilities. Washington and its allies must treat each claim with scrutiny, separating hype from substance and discerning intent. Failing to do so risks costly strategic miscalculation.