[News] Huawei Reportedly Backs China’s DUV Drive, with 12 Systems Targeted by End-2026; SMIC Testing Underway
Huawei is emerging as a key force in China’s push to localize semiconductor equipment. According to Financial Times, the company is backing domestic firms developing critical components for advanced chipmaking equipment as Beijing seeks to reduce reliance on foreign technology. One major effort reportedly centers on Yuliangsheng, a Shanghai-based equipment maker that has co-developed China’s first domestically made advanced deep ultraviolet (DUV) lithography machine. Sources say it is set to produce 12 DUV machines by the end of 2026.
The DUV machine is reportedly being tested by Chinese chipmakers including SMIC, as well as on Huawei’s own production lines, the Financial Times notes. While ultimately targeting advanced AI chips, the machine is currently being tested on less complex semiconductors as engineers continue to refine it.
The latest reported target appears higher than earlier production plans, though the reports identify the production efforts differently. Reuters reported in late July that state-owned Shanghai Aishengna, which had incorporated teams from Yuliangsheng and SMEE, was leading an effort targeting around five machines in 2026 and 20 in 2027.
With support from longtime Chinese lithography equipment maker Shanghai Micro Electronics Equipment (SMEE), Yuliangsheng is developing multiple DUV prototypes, the Financial Times notes. Some prototypes still rely on foreign components, particularly projection lenses and light sources, where Chinese suppliers trail overseas rivals. Huawei is reportedly investing to close these gaps, with its corporate venture arm Habo and Huawei-backed fund Shenzhen Yuanzhi Xinghuo both backing suppliers targeting these bottlenecks.
Tackling the Projection Lens Bottleneck
For projection lenses, Huawei’s Habo and Huawei-backed fund Shenzhen Yuanzhi Xinghuo have both invested in Fujian Zhiqi Photonics, an ultra-precision optics maker spun off from Chinese optical materials company Castech in 2022. Shenzhen-listed Castech is a leading producer of optical crystals used in laser systems and has previously identified ASML and Huawei as customers, the Financial Times notes.
Foreign dependence, however, remains. Yuliangsheng reportedly uses Zeiss projection lenses in its DUV machines, although Zeiss told the Financial Times that it sells lithography optics only to ASML. Sources said such lenses could potentially be obtained through China’s secondary market.
Localizing DUV Light Sources
Light sources represent another major bottleneck, with Japan’s Gigaphoton and ASML subsidiary Cymer dominating the market, according to the Financial Times. The report highlights Beijing RSLaser Opto-Electronics, which is backed by Huawei’s Habo, as a leading Chinese developer of DUV light sources.
RSLaser has reportedly supplied light sources for older-generation SMEE DUV equipment. According to a post on East Money, SMEE said at SEMICON China 2026 that its 28nm immersion DUV system is in the final stage of customer validation, while the system reportedly uses a high-energy laser source supplied by RSLaser.
Commercial Adoption Remains a Hurdle
Despite this progress, commercial adoption remains a challenge. Financial Times notes that while leading foundries such as SMIC have purchased and are testing Yuliangsheng’s DUV machines, they continue to rely on ASML systems. China also remains a significant market for ASML despite its declining share of sales, accounting for 14% of net system sales by shipment location in Q2 2026, down from 19% in Q1, according to the company’s latest results.
Read more
- [News] U.S. May Push Near-Total ASML China Ban on DUV Sales and Servicing Amid China Domestic Lithography Push
- [News] China Reportedly Mass-Produces Immersion DUV Tools; SMIC, Hua Hong, CXMT Deliveries Expected This Year
(Photo credit: Huawei)
