Huawei orchestrates China's DUV lithography push to cut reliance on ASML

Huawei is stepping into the core role of China’s domestic semiconductor equipment supply chain initiative, actively supporting key lithography vendors and connecting with major chipmakers like SMIC. This move accelerates the domestic substitution of mid-range DUV tools, pushing SMIC and others to prioritize local equipment to reduce reliance on ASML. Technologically, it forces domestic vendors to improve precision and yield, creating a feedback loop of innovation. From a compliance standpoint, the U.S. restrictions on China’s semiconductor industry remain tight, and Huawei’s strategy aims to mitigate export control risks, though it may trigger stricter scrutiny. In market dynamics, TSMC and Samsung may accelerate investments in China to maintain technological dominance and supply chain control. Over the next 12–24 months, domestic equipment firms are likely to gain ground in mid-tier applications, but high-end tools will still face technical hurdles, leading to a segmented path of self-reliance.