UBS: China's semiconductor technology lags behind ASML's EUV; DUV mass production may take 2–5 years

ChainCatcher report, according to Bloomberg, UBS analysts expect that China’s semiconductor manufacturing capabilities may not advance quickly enough over the next decade to develop a viable alternative to ASML’s advanced EUV lithography technology. In their report, UBS analysts wrote, “China currently appears to be at a stage similar to ASML’s position in 2004.” Based on patent filing activity—particularly in the areas of light sources and laser subsystems—China’s current technological maturity is roughly equivalent to where ASML was 15 years before it began large-scale production of EUV equipment. UBS also forecasts that China is likely to achieve large-scale mass production capacity for immersion DUV lithography machines within the next two to five years. While immersion DUV is less advanced than EUV, it remains an essential tool in chip manufacturing. ASML’s immersion DUV machines sell for nearly $90 million each, while EUV systems cost over $200 million per unit. China is one of ASML’s largest markets, but export restrictions prohibit ASML from selling EUV equipment to China. UBS noted that, given gaps in yield and capacity as well as regulatory constraints, Chinese lithography equipment is unlikely to be adopted overseas. ASML declined to comment on the report. This article is based on UBS analysts’ projections; actual progress should be assessed according to industry developments.