China Says It Cracked the Chipmaking Tech the West Spent Billions Trying to Keep From It
Researchers at the Chinese Academy of Sciences’ Shanghai Institute of Optics and Fine Mechanics have built a laser-produced plasma extreme ultraviolet (EUV) light-source platform, achieving a 3.42% conversion efficiency in a March 2025 paper. This marks a key step toward domestic advanced-chip manufacturing, as EUV remains the bottleneck for sub-7nm production. ASML has been barred from selling its most advanced EUV tools to China since 2019.
The team, led by former ASML scientist Lin Nan, used a solid-state 1-micron laser instead of the commercial CO2 lasers. While the 3.42% efficiency beats earlier academic results (e.g., ETH Zurich’s 1.8% in 2021), commercial EUV sources achieve around 5.5%. Crucially, power output remains at 100–150 watts versus ASML’s 600-watt benchmark, affecting wafer throughput. Export controls have kept China reliant on ASML and Japan’s Nikon and Canon for lithography machines.
Reuters reported in December 2025 that Shenzhen researchers assembled a prototype EUV machine by reverse-engineering ASML technology, using salvaged parts. The machine did not produce functional chips but signals China’s ambition for fully domestic advanced chip production by 2028.
Parallel to hardware efforts, Alibaba previewed its 2.4 trillion-parameter Qwen3.8-Max-Preview on July 19, 2026, at the World AI Conference in Shanghai. The multimodal model uses a sparse Mixture-of-Experts design, though benchmark results and license terms remain undisclosed. A day earlier, Alibaba’s chip unit T-Head announced it will open-source its SAIL software stack, positioning it as a CUDA alternative. This follows the May 2026 unveiling of the Zhenwu M890 chip, which delivers 0.6 PFLOPs FP16 with 144 GB HBM3 and has shipped 560,000 units to over 400 corporate customers.