China’s Answer to ASML: Huawei Funds Chinese Lithography Machine Builders Using Zeiss Lenses
Huawei is bankrolling Chinese companies building lithography machines and pushing their tools into fabs including SMIC, according to a report by the Financial Times. The flagship machine uses projection lenses from Zeiss, which states it only sells lithography optics to ASML.
September 8, 2026 – 2:40 pm
Credit: ZBMAUE oopAAM via Wikimedia Commons (public domain)
China’s effort to build its own chipmaking machines finally has a coordinator: Huawei. And the flagship machine it is coordinating still runs on German lenses.
Eleanor Olcott and Zijing Wu reported this arrangement for the Financial Times, citing multiple sources. TNW has not independently verified it.
Huawei is investing across the industry that supplies lithography equipment and helping those suppliers get their machines into Chinese fabs, including SMIC. Lithography is the step that prints circuits onto silicon—the one part of chipmaking China has never managed to replace.
What the Arrangement Entails
Lin Qingyuan, a semiconductor analyst at Bernstein, described the arrangement to the Financial Times.
“Huawei is playing a project management role in China’s DUV push,” he said. A prototype on its own achieves nothing; the work needs thousands of vendors and customers moving together, and “a central orchestrating power to bring this effort together.”
That role was previously lacking in China, which has had lithography ambitions and scattered suppliers for years but lacked someone with enough money and leverage to get a fab to commit to an unproven domestic tool.
The Central Company and Denials
The company at the center of this arrangement is Yuliangsheng, a Shanghai equipment maker, which co-developed the first Chinese-made advanced deep ultraviolet machine. SMIC is testing it, and so is Huawei on its own production lines.
The company was spun out of SiCarrier, and the Financial Times has previously reported close technical and business ties between SiCarrier and Huawei. Huawei has denied any affiliation with SiCarrier. This denial stands in tension with the reporting, and both should be noted in the record.
We’ve encountered Yuliangsheng before. In July, TNW reported that a state-owned group, Shanghai Aishengna, was absorbing teams from Chinese lithography startups, including Yuliangsheng. The Financial Times now describes Yuliangsheng as a SiCarrier spinout building its own machine.
These two accounts are not identical, and no one has confirmed either on the record. The corporate structure of Chinese lithography remains unclear.
The Zeiss Conundrum
Here’s the crucial detail: Yuliangsheng uses projection lenses made by Zeiss, according to two sources. Zeiss states it sells its lithography optics only to ASML. Industry insiders told the Financial Times that these lenses could be obtained on the secondary market in China.
The report does not allege any illegal activity, but it does highlight a potential problem: a machine designed to circumvent export controls relies on a component its manufacturer does not sell within the country.
Huawei is addressing this. Its venture arm Habo and a second Huawei-backed fund have both invested in Fujian Zhiqi Photonics, an ultra-precision optics maker spun out of the Shenzhen-listed group Castech in 2022. The fund took a 37% stake in 2023 for about $15 million.
Castech is worth a closer look. It traces its origins to a Chinese Academy of Sciences institute and makes optical crystals.