China is trying to build the one machine it has never been able to buy.

According to people familiar with the project, Chinese scientists have completed a prototype extreme ultraviolet (EUV) lithography machine inside a high-security laboratory in Shenzhen.

The system was finished in early 2025 and is now undergoing testing. It can generate EUV light and is operational—but it has not yet produced working chips.

EUV lithography is the most difficult piece of modern chip manufacturing

And it has been the single most effective choke point in global chip supply. Until now, only one company in the world—ASML—has been able to make it work at scale.

The prototype fills nearly an entire factory floor and was built by a team that includes former ASML engineers, according to the sources. The group is said to have reverse-engineered ASML’s EUV systems, which are essential for producing the most advanced chips used in AI, smartphones, and military applications.

Until recently, China didn’t have the option to attempt this.

The project follows years of export controls that blocked EUV sales to China, beginning with U.S. pressure on the Netherlands in 2018 and expanding significantly in 2022. Those restrictions didn’t just cut China off from machines. They cut China off from the accumulated expertise embedded inside them.

EUV lithography is often described as the holy grail of chipmaking for a reason.

The machines fire bursts of extreme ultraviolet light—generated by vaporizing tiny droplets of tin—through some of the most precise optics ever manufactured. The tolerances are measured in fractions of a nanometer. A single misalignment can ruin the process.

ASML spent decades building that capability, in close coordination with a small number of suppliers. Chief among them is Carl Zeiss, which produces the ultra-precise mirrors required to guide EUV light. Replicating that optical system has proven to be one of the hardest challenges for China’s prototype.

Sources say that difficulty remains the main gap between the Chinese system and ASML’s production machines.

Even so, Beijing is pushing forward.

The effort is described as part of a six-year campaign for semiconductor self-sufficiency, run largely in secrecy.

Huawei is said to play a central coordinating role, linking state research institutes and private firms. Some recruits reportedly used aliases and false identification inside the facility.

The government’s internal target is to produce working chips on the prototype by 2028, though people close to the effort believe 2030 is more realistic.

Progress so far has depended in part on scavenging. Sources say components have been sourced from older ASML machines and secondhand markets, including equipment that appeared at auctions in China as recently as October 2025. The Changchun Institute of Optics, Fine Mechanics and Physics helped integrate EUV light into the system, making the prototype operational.

None of the companies or government agencies contacted responded to requests for comment.

What’s important here isn’t whether China has “caught up.” It hasn’t.

What matters is that China is now attempting the one step it was previously blocked from even trying. EUV isn’t just another piece of equipment. It’s the final barrier separating advanced chipmaking from brute-force iteration.