China has reportedly built a working prototype of an advanced chip-making machine, defying Western predictions. Former ASML engineers are said to be behind the project, which aims for semiconductor independence. This development, a six-year government initiative, could significantly alter global chip supply chains, challenging ASML’s monopoly on crucial EUV technology.

In a high-security Shenzhen laboratory, Chinese scientists have achieved what Washington spent years trying to prevent and what Europe’s leading chip equipment maker said was impossible: building a working prototype of an extreme ultraviolet (EUV) lithography machine, dubbed “China’s Manhattan Project,” capable of producing the cutting-edge semiconductor chips that power artificial intelligence, smartphones, and advanced weapons systems. The breakthrough, as reported by Reuters, could prove ASML’s CEO dramatically underestimated China’s semiconductor capabilities.The prototype, completed in early 2025 and now undergoing testing, was reportedly built by former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s technology. While ASML CEO Christophe Fouquet said in April that China would need “many, many years” to develop such technology, Reuters reports suggest Beijing may be years closer to chip independence than Western experts anticipated.

Former ASML engineers built China’s prototype using reverse engineering

The machine fills nearly an entire factory floor and is operational, successfully generating extreme ultraviolet light, though it has not yet produced working chips, according to two people with knowledge of the project who spoke to Reuters. The Chinese government has set a target of producing working chips by 2028, though sources close to the project say 2030 is more realistic—still years ahead of the decade-long timeline many analysts had projected.The breakthrough marks the culmination of a six-year government initiative described by sources as China’s version of the Manhattan Project. Huawei plays a key coordinating role across a web of companies and state research institutes involving thousands of engineers, Reuters reported.

China recruited ASML veterans with fake IDs and million-dollar bonuses

According to Reuters, the team includes recently retired Chinese-born former ASML engineers recruited with signing bonuses starting at $420,000 to $700,000. One veteran engineer received a fake identification card along with his signing bonus, and found other former ASML colleagues also working under aliases to maintain secrecy.The project falls under China’s semiconductor strategy run by Xi Jinping confidant Ding Xuexiang, who heads the Communist Party’s Central Science and Technology Commission. “The aim is for China to eventually be able to make advanced chips on machines that are entirely China-made,” one source told Reuters. “China wants the United States 100% kicked out of its supply chains.”

ASML monopolizes EUV technology that powers AI chips and military systems

EUV machines are critical for producing cutting-edge semiconductor chips that power artificial intelligence, smartphones, and weapons systems. ASML is currently the only company that has mastered this technology, with machines costing around $250 million each. The company told Reuters it took nearly two decades and billions of euros before producing its first commercially-available chips in 2019.ASML CEO Fouquet has repeatedly downplayed China’s semiconductor capabilities. In December 2024, he told Dutch media that China is currently 10 to 15 years behind the West in chipmaking. “By banning the export of EUV, China will lag 10 to 15 years behind the West,” he said. “That really has an effect.” In February 2025, he told The Wall Street Journal that export controls remain effective despite advances like DeepSeek’s AI model. “If you don’t have the most advanced technology at hand, you won’t be as good as the people who have it,” he insisted.The United States has blocked ASML from selling EUV systems to China since 2018, restrictions that expanded under the Biden administration in 2022. No EUV system has ever been sold to a customer in China, ASML confirmed to Reuters.Yet export restrictions have struggled to contain China’s ambitions. The country has been salvaging components from older ASML machines and sourcing parts through secondhand markets to build its prototype, with networks of intermediary companies sometimes masking the ultimate buyer, sources said. International banks regularly auction older semiconductor fabrication equipment, with auctions in China selling older ASML lithography equipment as recently as October 2025, according to a review of listings on Alibaba Auction.ASML told Reuters it “vigilantly guards” trade secrets and has “successfully pursued legal action in response to the theft of trade secrets.” The company won an $845 million judgment in 2019 against a former Chinese engineer accused of stealing trade secrets, but the defendant filed for bankruptcy and continues to operate in Beijing with Chinese government support, according to court documents.The Shenzhen prototype suggests that China’s biggest breakthrough in the semiconductor race may have come not from circumventing Western export controls, but from the very engineers who built the technology those controls were designed to protect.