Stealing Like a State

Center for a New Square Deal
Written By Brian Balkus

For more than a decade, China has sought to steal the technology behind ASML’s extreme ultraviolet (EUV) lithography technology. According to a Reuters report published in December 2025, Chinese engineers may have partially succeeded. They assembled a prototype EUV system in a secret Shenzhen facility using parts salvaged from older ASML machines obtained through undisclosed means, as part of a state-backed effort insiders have dubbed China’s Manhattan Project.

China’s commitment to this ambitious project reflects a strategic vulnerability. The country imports more than $300 billion annually in semiconductors and semiconductor manufacturing equipment. This figure exceeds its spending on imported oil and gas. An American export ban on foreign-made microchips would cripple China’s industrial base. And if China can’t develop its own EUV machines, it will lack the advanced chips needed for AI model development if the U.S. decides to impose strong export controls.

Many analysts believed it would take far longer for China to assemble even a prototype. The task requires recreating an extraordinarily complex supply chain. ASML draws on more than 5,000 specialized suppliers to build close to 100,000 components for a single machine, which is roughly the size of a school bus. Many suppliers occupy narrow niches with no real substitutes.

Read more at Arena Magazine.

Brian Balkus

Brian Balkus is a senior director of strategy at an energy infrastructure company and a contributing writer at Arena Magazine, Palladium Magazine, and IM-1776. He can be found on X @bbalkus.

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