SMIC was testing a deep ultraviolet (DUV) lithography system produced by Shanghai Yuliangsheng. While seemingly a simple internal equipment test, this event could become a significant turning point in the restructuring of the global semiconductor industry.
In September 2025, a piece of news sent shockwaves through the global semiconductor industry: SMIC was testing a deep ultraviolet (DUV) lithography system produced by Shanghai Yuliangsheng. While seemingly a simple internal equipment test, this event could become a significant turning point in the restructuring of the global semiconductor industry.
DUV lithography systems, or deep ultraviolet lithography systems, are key equipment in semiconductor chip manufacturing. They utilize deep ultraviolet light (typically with a wavelength of 193 nanometers) through complex and precise optical projection technology to precisely transfer integrated circuit patterns from a mask onto a photoresist-coated silicon wafer. In the semiconductor manufacturing process, lithography determines the sophistication of chip circuits and directly impacts chip performance and integration. Therefore, lithography systems occupy a core position in the entire semiconductor industry chain.
For a long time, the global DUV lithography market has been dominated by Dutch companies. Its DUV lithography systems, thanks to their advanced technology and superior performance, have secured a significant market share in high-end chip manufacturing. With outstanding productivity, imaging, and overlay performance, they provide solid support for the large-scale manufacturing of advanced logic and memory chips. However, in recent years, with the evolving international landscape, the semiconductor industry supply chain has faced unprecedented challenges.
Against this backdrop, the entry of Shanghai Yuliangsheng’s DUV lithography system into testing at SMIC is of great significance. The equipment currently being tested at SMIC utilizes immersion technology and is suitable for 28nm processes. Using multiple patterning techniques, it is expected to produce 7nm chips and, in extreme cases, even 5nm processors, albeit with potentially lower yields. This achievement represents a breakthrough for China in the research and development of core semiconductor equipment.
From a global perspective, if Shanghai Yuliangsheng’s DUV lithography system successfully passes testing and enters mass production, it will have a multifaceted impact on the existing landscape. For one thing, it will significantly enhance the autonomy and supply chain security of the Chinese semiconductor industry. For a long time, China’s semiconductor industry has been at the mercy of others in the high-end equipment sector. The emergence of domestically produced DUV lithography equipment is expected to fill key technological gaps, reduce dependence on Western technology, provide a more stable equipment supply for domestic chip manufacturers, promote coordinated development across the industry, and propel China’s semiconductor industry to a higher level. For example, in the mature process chip market, 28nm and 40nm process chips are widely used in automotive electronics, industrial control, the Internet of Things, and other fields. The mass production of domestically produced DUV lithography equipment will help meet the growing demand for chips in these areas and enhance China’s competitiveness in the global mature process chip market.
From a global competitive perspective, this will break the near-monopoly of leading global brands in the DUV lithography equipment market and intensify market competition. The entry of new technology players will encourage global lithography equipment manufacturers to increase R&D investment, driving further innovation and development in lithography technology. It will also provide global semiconductor chip manufacturers with more equipment options, alleviate the production capacity bottlenecks faced by some companies due to limited equipment supply, and promote the diversification of the global semiconductor industry supply chain. However, Chinese brands should also be aware that while SMIC’s testing of Shanghai Yuliangsheng’s DUV lithography equipment represents a significant breakthrough, achieving widespread adoption and sustainable development of domestically produced DUV lithography equipment in the global market still faces numerous challenges. For example, on a technical level, further improvements are needed in equipment stability, precision, and production efficiency, as well as optimization of key technologies such as multiple exposures, to enhance chip manufacturing yield and quality. On a market level, a comprehensive after-sales service system must be established to strengthen customer trust and recognition of domestically produced equipment.
Overall, SMIC’s testing of Shanghai Yuliangsheng’s DUV lithography equipment in September 2025 marked a significant milestone in the development of China’s semiconductor industry and introduced new variables to the global semiconductor industry landscape. Regardless of the outcome, this event will inspire the Chinese semiconductor industry to continue forging ahead on the path of independent innovation and will have a profound impact on technological development and market competition in the global semiconductor industry, worthy of continued attention from both within and outside the industry.
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