China has taken a significant step towards semiconductor self-reliance with the development of a prototype machine capable of manufacturing advanced chips. According to a Reuters report, this highly confidential project is being carried out at a high-security laboratory in Shenzhen and is already being described by insiders as China’s own “Manhattan Project.”

Sources cited by Reuters revealed that the prototype was completed in early 2025. The machine, roughly the size of an entire factory floor, has reportedly been built by engineers who previously worked with ASML, the world’s only supplier of extreme ultraviolet (EUV) lithography machines. While the prototype has not yet produced functional chips, it has successfully begun generating extreme ultraviolet light, a critical milestone in advanced chip manufacturing.

China’s ‘Manhattan Project’ for chips
People involved in the project say its ambition is clear and strategic. One source summed it up by stating that China aims to manufacture advanced semiconductor chips entirely using domestically developed equipment, eliminating reliance on the United States and other foreign suppliers. The project is said to be part of President Xi Jinping’s top-priority push for technological and semiconductor independence.

What does a lithography machine do?
Lithography machines are essential for semiconductor manufacturing. They are used to print microscopic circuits onto silicon wafers. The smaller and more precise these circuits are, the faster and more power-efficient the chips become. Such advanced chips are crucial for artificial intelligence systems, flagship smartphones, high-performance computing, and military applications.

Why this development is so significant
EUV lithography uses extreme ultraviolet light to etch circuits that are thousands of times thinner than a human hair. At present, ASML, a Dutch company, is the only manufacturer in the world that sells EUV lithography systems. Each of these machines reportedly costs around $250 million (approximately ₹2,075 crore).

Since 2018, the United States has pressured the Netherlands to restrict ASML from exporting EUV machines to China. ASML has confirmed that it has never sold an EUV system to any Chinese customer. In April, ASML CEO Christophe Fouquet said it would take China “many, many years” to develop comparable technology.

However, the emergence of this prototype suggests that China may be progressing faster than many experts had anticipated. While the machine is still far from mass production or commercial use, its existence alone has surprised the global semiconductor industry and could reshape future technology and geopolitics.