How China's 'Manhattan Project' aims to break Western control of AI chips

China has secretly built a prototype machine to make advanced AI chips, aiming to end Western dominance, with working chips expected by 2028-2030

China has taken a major step in its push to break Western dominance in advanced semiconductor technology. Inside a high-security laboratory in Shenzhen, Chinese scientists have built a prototype machine capable of producing the most advanced chips used in artificial intelligence, smartphones and modern weapons, Reuters reported.

 

The project was completed in early 2025 and is now under testing.

 

What exactly has China built?

 

China has developed a prototype of an extreme ultraviolet (EUV) lithography machine -- the most advanced tool used to make cutting-edge semiconductor chips.

 

The machine, which fills nearly an entire factory floor, was built by a team that includes former engineers from Dutch chip equipment maker ASML. The team reverse-engineered ASML’s EUV machines, the news report said.

 

The prototype is operational and can successfully generate extreme ultraviolet light, a critical step in chipmaking. However, it has not yet produced working chips.   

 

Why are EUV machines so important?

 

EUV machines sit at the heart of modern chipmaking. They use beams of "extreme ultraviolet light to etch circuits" thousands of times thinner than a human hair onto silicon wafers.

 

The smaller the circuits, the more powerful the chip. This capability is essential for artificial intelligence processors, high-end smartphones and advanced military systems.

 

Until now, only one company in the world has mastered this technology: ASML, headquartered in the Netherlands.

 

How close is China to matching the West?

 

In April, ASML CEO Christophe Fouquet said China would need “many, many years” to develop EUV technology. But the existence of a working prototype suggests China may be much closer than expected.

 

The Chinese government aims to produce working chips using the prototype by 2028. Those closer to the plan say 2030 is a more realistic target -- still far earlier than the decade analysts believed China would need, Reuters reported.

 

However, major technical hurdles remain, especially in replicating the ultra-precise optical systems used in Western machines.

 

Why has the project been kept secret?

 

The Shenzhen EUV effort is part of a six-year government drive for semiconductor self-sufficiency, one of President Xi Jinping’s top priorities. While China’s ambitions in chips are public, the EUV project itself has been conducted in near total secrecy. Those involved say it is classified under national security, and no one outside the compound is allowed to know what is being built, the news report said.

 

The project falls under China’s semiconductor strategy, overseen by Ding Xuexiang, head of the Communist Party’s Central Science and Technology Commission.

 

Why is it being compared to the Manhattan Project?

 

Reuters quoted sources who described the effort as China’s version of the Manhattan Project -- the secret US programme during World War II to develop the atomic bomb.

 

“The aim is for China to eventually be able to make advanced chips on machines that are entirely China-made,” one of the people said. “China wants the United States 100 per cent kicked out of its supply chains.”

 

Huawei plays a central role, coordinating thousands of engineers across state research institutes and private firms.

 

How did China get the expertise to build EUV machines?

 

Former ASML engineers have been critical to the project. One Chinese engineer recruited from ASML was surprised to receive an ID card under a false name upon joining the project. Inside the facility, he found other former colleagues also working under aliases. The guidance was strict: no one outside the compound could know what they were building -- or even that they were there.

 

The team includes recently retired, Chinese-born former ASML engineers who possess deep technical knowledge but face fewer professional constraints after leaving the company.   

 

How is China sourcing restricted components?

 

China is sourcing parts from older ASML machines and buying equipment through secondhand markets, the report said.

 

International banks regularly auction used semiconductor equipment. Listings show older ASML machines being sold in China as recently as October 2025. Some components come from Japan’s Nikon and Canon, routed through intermediary companies to hide the final buyer, reported Reuters.

 

Inside the Shenzhen lab, around 100 recent university graduates are tasked with reverse-engineering parts. Each desk is monitored by a camera, and staff receive bonuses for successfully reassembling components.

 

What does China’s EUV prototype look like?

 

ASML’s most advanced EUV machines are reportedly about the size of a school bus and weigh 180 tonnes. China’s prototype is even larger after earlier attempts to copy ASML’s design failed. The machine is more crude than ASML’s systems but functional enough for testing.

 

Its biggest weakness lies in optics. Western machines rely on mirrors supplied by Germany’s Carl Zeiss AG, which take months to produce and operate under extreme conditions.

 

Chinese institutes, including the Changchun Institute of Optics, Fine Mechanics and Physics, have made progress integrating EUV light into the system, allowing it to become operational in early 2025. However, significant refinement is still needed, the news report said.