After six years of a covert “Manhattan Project” effort, China has successfully built a working prototype of a machine to produce the world’s most advanced semiconductor chips. The machine reportedly is a knockoff of the real one built by former engineers from Dutch semiconductor giant ASML.
ASML is the world’s sole manufacturer of extreme ultraviolet (EUV) chipmaking machines, which produce the bleeding edge chips to power artificial intelligence (AI) and other critical technologies unveiled in November 2025 by the Defense Department.
This means that China can soon manufacture chips that are competitive to Nvidia’s world class AI chips. As a result, China’s development of its AI-powered military capabilities, including cyberattacks, swarming drones and advanced missiles with precision guidance, would no longer be constrained by its inability to access at scale leading-edge chips.
Reuters reported in December that China’s ASML knockoff is both operational and successfully generating EUV light, although it has not yet produced working semiconductor chips. A research analyst at SemiAnalysis and former ASML engineer, Jeff Koch, said, “No doubt this is technically feasible, it’s just a question of timeline.”
China’s goal is to produce working chips on the prototype machine by 2028, but those familiar with the project believe that 2030 is more realistic.
A focus on people, not hardware
As I noted back in 2024, “If one had to pick the single country and company that could do more damage to U.S. military readiness to successfully combat China’s aggression anywhere in the world, the Netherlands and ASML should — surprisingly — be the top candidates.”
The Reuters reporting provides insight into how China went about obtaining one of the crown jewels of technological know-how.
As far back as 2018, the U.S. pressured the Netherlands to prohibit ASML from selling EUV lithography systems to China, and they claim they have never done so. As a reaction to such prohibitions, in 2019 China began a covert “Manhattan Project” focused not on the EUV lithography tools that ASML manufactured but the people who did so.
China not only obtained salvaged components from older ASML machines and sourced parts from ASML suppliers through secondhand markets, it also aggressively hired ASML veterans. The high-security ASML knockoff laboratory in Shenzhen, China is staffed with former ASML employees, who were the critical element in the breakthrough of its EUV lithography system to be operational enough for testing.
China went all out to create its ASML knockoff: secret facility work, generous signing bonuses to former ASML employees, uncapped salaries to PhD lithography researchers, theft of ASML trade secrets, employees working under aliases with fake IDs, intermediate companies to hide the ultimate buyer of used ASML tool components, employee home-purchase subsidies, and extremely unusual dual citizenships for select employees.
Huawei is deeply involved in the project. Its employees often sleep on site. Huawei is on the U.S. entity list of companies believed to threaten national security.
Epic failure by the Netherlands, E.U.
Mark Rutte, the current NATO secretary general and former prime minister of the Netherlands, explained in December that Russian President Vladimir Putin has been able to continue his war against Ukraine because of China. According to Rutte, China provides Russia with about 80% of the critical electronic components in Russian drones.
China’s ASML clone once operational can only help Russia solidify gains in Ukraine and allow Russia to further threaten NATO members on its flank. Hence, ASML, the Netherlands and the E.U. have epically failed their own national security interests — and those of the U.S.
As justification for its failure, ASML says European privacy laws limit its ability to track former employees and that enforcing nondisclosure agreements in China has proven difficult. Whether such excuses are valid is debatable. ASML should nevertheless only bear a portion of the blame as it does not set or enforce its nation’s foreign policy. That failure falls entirely on the Netherlands and the E.U.
A broad range of options
When Rutte became the NATO chief in October 2024, that was the time for him to lead a global effort to tighten export controls on semiconductors that are enabling Moscow’s arsenal against Ukraine.
The catastrophic export control failures of both the Netherlands and E.U. mean this challenge must now be addressed by other approaches available to NATO nations.
Rutte should work to coordinate NATO intelligence capabilities to block China’s ASML copycat EUV lithography tools from successfully producing the most advanced computer chips.
In the intelligence arena, the options include placing intelligence assets within ASML and its key suppliers, such as renowned German optics company Carl Zeiss AG; planting tracking devices within ASML tools as is currently done with high-value AI chips; surveilling current and former pro-Chinese ASML employees and preventing their decamping to China; surreptitiously monitoring the ASML used-tool markets and preventing diversion to China; and in the joint military -intelligence arena initiating cyber-attacks to corrupt the stolen ASML trade secrets.
Tackling the ASML copycat threat from China would protect NATO and reinvigorate the alliance by demonstrating its value to a highly skeptical President Trump, because the U.S. has not yet taken down China’s ASML copycat and cannot do so on its own.
