China is reportedly making a breakthrough in the semiconductor market in a big way with the development of an Immersion DUV machine, a tool that chipmakers use to etch circuit patterns into wafers used to make chips for RAM, graphics cards, and computer processors. As of right now, Dutch company ASML has controlled the market for this type of machine, with no other companies reportedly not able to replicate its success with a competitive product.
This has allowed it to flourish in an industry where it has really no competitors and dominate the space. Reports of China’s breakthrough to build this type of machine for use in its own chip-making market would be a huge blow to ASML and crack the industry wide open. However, it’s also reported that just building this type of machine is not enough for China to really break into the DUV machine market with its new tech.
China making a DUV machine is but one piece of the pie, it would also need to match ASML’s output
According to a report from The Information (via CNBC), China may have been built its own Immersion DUV machine, but analysts speaking on the development raise questions that are labeled as a caveat on making any sort of real dent in ASML’s dominant space.
China will need to do more than just have a comparable machine, analysts say. It will also need its tool to be able to produce a yield that matches that of what ASML’s DUV machines can produce. If the yields fall short, then companies would have little reason to go with China’s machine over what ASML currently offers. Even companies in China would fare better with ASML’s product if its yields were significantly better.
If China’s machine can at least produce yields that equal ASML’s, then ASML stands to lose a significant chunk of potential customers. Losing access to the Chinese market is reportedly a major concern of investors.
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