YES, BUT…: China’s reported chip breakthrough comes with some big caveats.

“Any machine built by an unknown state-backed company are starting from a much worse spot. Reliability takes years of iteration in the field, which ASML has [and] China still has yet to achieve,” Patience added.

Another challenge for China is scaling these machines. The Information reported that the Chinese firm developing the DUV tool is aiming to produce five units this year and around 20 in 2027.

In comparison, ASML said it plans for a capacity of around 130 DUV immersion machines in 2026, and is planning to add 30% in 2027.

“Tool performance, scaling production of the machine itself, fleet performance, surrounding ecosystem and poor economics against fully depreciated ASML machines all stack up against China DUV,” a team of analysts at SemiAnalysis told CNBC.

“Scaling production of the machine itself [is] the most underestimated part.”

Yes, but if there’s one thing China does well, it’s scale up.