China stockpiled 343 ASML immersion DUV tools, report says, enough for 7nm AI chips without EUV

China's semiconductor industry has quietly assembled a vast stockpile of advanced lithography equipment. A report published in late September 2026 by the Centre for Technology & Statecraft (CTS), a Washington research group established in August, estimates that Chinese-owned fabs had acquired about 343 immersion deep ultraviolet (DUV) lithography systems by early 2026. This inventory, worth billions of dollars, gives Chinese chipmakers a potential path to produce 7nm-class logic and advanced memory for AI processors without relying on extreme ultraviolet (EUV) tools that Western export controls block.

The South China Morning Post reported on October 2 that the CTS report has prompted former US officials to urge Washington and its allies to shut down further exports of immersion DUV tools. The study was co-authored by Nicholas Brown, a former US export control official, and Saif Khan, a former White House and commerce department technology policy adviser. Their analysis adds fresh data to a heated debate in Washington over whether Western allies should impose a total blockade on immersion DUV tools bound for China.

Blocked from buying ASML's most advanced EUV systems, Chinese chipmakers have leaned heavily on immersion DUV systems, some models of which remain exempt from Western export bans. DUV tools are less advanced than EUV, but they can be adapted to manufacture 7nm logic chips and advanced memory for AI processors, including Huawei's Ascend series. The report states that advanced lithography systems are indispensable for competitive AI chips, yet China is unlikely to commercialize them at scale until the mid-2030s, giving the US and its allies leverage.

TrendForce reported on October 5 that Chinese-owned fabs spent more than US$13 billion acquiring about 90 ASML NXT:1980i systems in 2024 and another 89 in 2025. The NXT:1980i is a Twinscan immersion DUV machine with 38-nanometer resolution and 2.5-nanometer matched-machine overlay, specifications that enable the multipatterning techniques required for 7nm-class nodes. Much of China's DUV buildup has centered on this single model, which Dutch authorities added to the licensing requirement list in September 2024.

Key Facts

CTS estimates that the 343 immersion DUV systems acquired by Chinese-owned fabs by early 2026 include roughly 270 ASML Twinscan NXT:1980i scanners, 22 NXT:2050i systems, and six NXT:2000i systems. Tom's Hardware reported on October 5 that Chinese chipmakers, including logic and memory makers, imported these 343 immersion DUV lithography scanners from ASML from 2012 to early 2026, excluding imports to multinational fabs located within China. The report describes the stockpile as large and growing.

The Dutch government began requiring export licences for ASML's NXT:2000i and more advanced immersion DUV systems in September 2023, effectively blocking shipment to China. It extended the requirement to the NXT:1980i a year later, in September 2024, though individual export licenses for that model can still be approved case by case. This regulatory shift pushed Chinese buyers toward the less capable NXT:1980i, which remains permitted to enter China despite enabling Huawei's AI chips.

ASML's financial disclosures reflect the surge and subsequent decline. China accounted for 41% of ASML's net system sales by shipment destination in 2024 and 33% in 2025. LavX News reported on October 5 that this share fell to 19% in the first quarter of 2026 and 14% in the second quarter of 2026. According to the CTS report, ASML is the sole supplier of EUV systems and holds 99% of the DUVi market, while Nikon holds the remaining 1%.

The CTS report projects that if China keeps importing around 90 NXT:1980i systems per year, its DUV fleet could support annual production of up to 434 million AI chips equivalent to NVIDIA's H100 by 2035. If new imports halt in 2027, that ceiling falls to 153 million units annually by 2035. The report states that the NXT:1980i and NXT:1970i are permitted to enter China despite enabling Huawei's AI chips, while NXT:1965i and earlier DUVi systems are effectively uncontrolled.

The report recommends prohibiting all immersion DUV exports to China and restricting replacement components and maintenance services for machines installed at advanced fabs. It highlights the bipartisan MATCH Act, introduced in April, which seeks China-wide restrictions on the sale and servicing of such tools. The report concludes that banning DUVi to China would secure a US AI chipmaking advantage through at least 2035, whereas continued imports could let China narrow or erase the currently sizable US-allied lead.

Analysis

What this really means is that existing export controls leave a critical gap. The CTS report argues that equipment originally purchased for less advanced nodes can be reassigned to more sophisticated production, albeit at higher cost and lower yield. Equipment sold for mature-node production can be repurposed or relocated to advanced lines. This flexibility means that even if China cannot buy the most advanced immersion DUV models, it can still use its existing stockpile to manufacture advanced AI chips.

The stockpile gives Chinese fabs considerable potential to produce sophisticated processors despite their inability to procure ASML's more advanced EUV systems. ASML is the sole supplier of EUV systems, and the NXT:1980i's 38-nanometer resolution and 2.5-nanometer matched-machine overlay enable the multipatterning techniques required for 7nm-class nodes. This means Huawei's Ascend AI chips and other advanced processors can be manufactured without sanctioned EUV tools. However, Tom's Hardware reported on October 5 that some other estimates in the report look questionable, suggesting the projections should be treated with caution.

The cost and yield penalties of multipatterning on DUV are significant. Producing 7nm-class chips with immersion DUV requires more steps, more masks, and more time, which raises costs and reduces output compared to EUV. The CTS report acknowledges that reassigning equipment to advanced production comes at higher cost and lower yield. This limits the competitiveness of the approach, but it does not eliminate the strategic threat. Even a less efficient path to advanced AI chips can support military and commercial applications that would otherwise be unavailable.

The bigger picture here is a race between US-led efforts to close the loophole and China's accumulation of tools before new restrictions take effect. The report says the US already has the authorities, including the foreign direct product rule, de minimis, and ECRA, to close the loophole. It recommends a China-wide ban on all DUVi exports plus controls on spare parts and servicing. The actions are aligned with the bipartisan MATCH Act. The report concludes that banning DUVi to China would secure a US AI chipmaking advantage through at least 2035, whereas continued imports could let China narrow or erase the currently sizable US-allied lead.

Why It Matters

The stockpile directly affects the global AI chip supply chain. If China's DUV fleet can produce up to 434 million H100-equivalent AI chips per year by 2035, that represents a massive expansion of advanced AI computing capacity outside US-allied control. Even the 153 million unit scenario, if imports halt in 2027, is substantial. These numbers explain why former US officials are urging a complete export ban and why the CTS report has attracted attention in Washington.

The debate has prompted former US officials to call for a total export ban on immersion DUV tools. The CTS report adds fresh data to the discussion about whether Western allies should impose a complete blockade. The Netherlands' licensing requirements have already shifted China's purchases to the NXT:1980i model, which can still be approved case by case. ASML's sales mix shows the impact: China's share of net system sales fell from 41% in 2024 to 33% in 2025, then to 19% in Q1 2026 and 14% in Q2 2026. A total ban would further reduce ASML's China revenue, but the report argues the security risk outweighs commercial considerations.

The report also emphasizes that advanced lithography is the foundation of the US AI advantage. ASML's near monopoly on DUVi and its sole supplier status for EUV give Western allies significant leverage. The report states that Washington is giving away that leverage by permitting China to import DUVi systems capable of producing advanced AI chips. If China continues to accumulate and adapt these tools, it could narrow the US-allied lead in AI chipmaking, with implications for economic competitiveness and national security.

Next Up

The bipartisan MATCH Act, introduced in April, seeks China-wide restrictions on the sale and servicing of immersion DUV tools. The CTS report recommends prohibiting all DUVi exports to China plus controls on spare parts and servicing. It asserts that the US already has the authorities to close the loophole and that banning DUVi to China would secure a US AI chipmaking advantage through at least 2035.

Key questions remain: Will the Netherlands expand its licensing requirements to cover all immersion DUV models, including the NXT:1980i? Will the US invoke the foreign direct product rule to restrict servicing and spare parts? And how quickly can China's fabs ramp 7nm-class production on DUV before new bans take effect? The answers will shape the AI chip landscape through 2035, determining whether China's 343-system stockpile becomes a lasting foundation for advanced chipmaking or a temporary advantage.