US think tank report: China is hoarding hundreds of DUV lithography machines, which may narrow the gap in AI chip technology

The picture shows the exposure machine of ASML. (Reuters)

China has been spending heavily on high-end chip design and production, but a lack of cutting-edge lithography equipment has frustrated Beijing's ambitions. However, the latest report recently written by a former U.S. export control official shows that Chinese chip manufacturers have stockpiled hundreds of deep ultraviolet (DUV) lithography machines worth billions of dollars. Although DUVs are not as advanced as extreme ultraviolet (EUV) lithography machines, they can still be modified to manufacture 7-nanometer chips and advanced memory for artificial intelligence (AI) processors. Therefore, the United States and its allies are urged to completely ban the export of DUV to Chinese companies.

Hong Kong's South China Morning Post reported that the Center for Technology and Statecraft (CTS), a policy research organization headquartered in Washington, released a new report on September 26 stating that by the beginning of 2026, Chinese chip manufacturers are expected to have stockpiled 343 DUVs.

The report, co-authored by Nicholas Brown, a former U.S. export control official, and Saif Khan, a former White House and Commerce Department technology policy adviser, adds new data to the debate in Washington over whether Western allies should impose a blanket blockade on DUV shipments to China.

Unable to purchase the most advanced EUV from Dutch semiconductor equipment manufacturer ASML, Chinese chip manufacturers have turned to rely heavily on DUV to produce high-end semiconductors. Some DUV models are not included in the Western export ban.

The report said that the U.S. government currently allows China to import DUVs that can produce advanced AI chips, allowing the Beijing authorities to actively take advantage of this opportunity. As of early 2026, China has accumulated a large number of DUVs.

The report estimates that about 270 DUVs purchased by Chinese chip manufacturers are Esmore's Twinscan NXT:1980i, 22 NXT:2050i, 6 NXT:2100i, and 45 lower-tech DUVs, for a total of 343 units.

The report pointed out that Chinese chip manufacturers spent more than US$13 billion (NT$413.8 billion) to purchase NXT:1980i in 2024 and purchased an additional 89 units in 2025. This wave of acquisitions is reflected in the financial report released by Asmore. In 2024, the Chinese market accounted for 41% of Asmore's net sales, and in 2025 it accounted for 33%.

The report said that if China’s import of ASML DUVs maintains its pace at the 2024-2025 level, then in the next five to 10 years, China’s accumulation of DUV production capacity may be enough to reduce or even eliminate the huge advantage that the United States and its allies currently have in the field of AI chip manufacturing.

The Dutch government has started requiring ASML to apply for a license when exporting NXT:2000i and more advanced DUVs in September 2023. Since then, these models have been banned from being exported to China. One year later, the Dutch government expanded the ban to include the NXT:1980i, but the export of this model can still be approved on a case-by-case basis.

The report said this practice left a major loophole, and warned that even DUV sold for mature process wafers can be reused or transferred to the production of advanced wafers.

In order to plug this loophole, the authors of the report recommend a complete ban on the sale of all DUVs to China and restrictions on parts replacement and after-sales services. They also recommend that Washington coordinate with the Dutch government or unilaterally extend U.S. export control measures to foreign-made systems using U.S. technology. The report said: "This move will ensure that the United States maintains a lead of at least 10 years in the production of advanced AI chips and the resulting AI capabilities, and ensure that the next batch of advanced wafer fabs will be built in the United States and its allies, not China."

The "Match Act" proposed by members of both parties in the U.S. Congress in April this year aims to impose comprehensive restrictions on the sales and services of chip manufacturing equipment that is difficult to produce independently in China, and specifically targets DUV. Some federal senators again called for the bill to be passed in September this year.