According to a report by Bloomberg, analysts at UBS Group have forecast that China's semiconductor manufacturing capacity may struggle to advance fast enough over the next decade to develop a viable alternative to ASML's advanced EUV (extreme ultraviolet) lithography technology.
"The stage they are currently at seems comparable to where ASML was in 2004," the UBS analysts wrote in the report. Based on patent activity, particularly in the areas of light sources and laser subsystems, China's current technological maturity roughly corresponds to the level ASML had reached 15 years before it began mass-producing EUV equipment.
UBS also expects China to achieve mass production of immersion DUV (deep ultraviolet) lithography machines within two to five years. While immersion DUV is less advanced than EUV, it remains an essential tool for chip manufacturing. ASML's immersion DUV systems sell for nearly $90 million each, while EUV systems cost more than $200 million per unit.
China is one of ASML's largest markets, but due to export restrictions, ASML is barred from selling EUV equipment to China. UBS noted that considering yield rate, capacity gaps, and regulatory constraints, Chinese lithography equipment is unlikely to be adopted outside China. A spokesperson for ASML declined to comment on the report. The analysis is based on UBS's projections, and actual progress will depend on industry dynamics.