What Is China’s Manhattan Project?

Towards the end of this year, global tech and geopolitical watchers were stunned by reports that China had quietly built a prototype machine at the heart of modern semiconductor manufacturing – a machine that, until now, has been produced almost exclusively in the West.

In fact, foreign media and investigative reporting describe this initiative as China’s very own “Manhattan Project” – a state-level, highly secretive push to produce extreme ultraviolet (EUV) lithography machines, technology widely seen as a linchpin of advanced chipmaking.

But, what exactly is this “Manhattan Project,” why is it so important and what could it mean for the global tech landscape?

From Atom Bombs to AI Chips: Why the “Manhattan Project” Label?

The term Manhattan Project originally refers to the US-led secret wartime initiative that developed the atomic bomb during World War II. The modern usage signals both secrecy and strategic urgency, and China’s semiconductor effort fits both. It’s kind of like the way in which US scandals have adopted the “gate” suffix to indicate some kind of scandal after Watergate.

According to reporting by Reuters, Chinese scientists and engineers have spent the better part of six years working in a secure facility in Shenzhen, developing a prototype EUV lithography machine capable of generating the intense ultraviolet light needed to print the world’s most advanced semiconductor circuits.

Now, these machines are critical because they enable chipmakers to etch circuits thousands of times thinner than a human hair onto silicon wafers – a process central to producing the latest AI processors, smartphone chips and military-grade semiconductors.

Until now, only one company on the planet – Dutch equipment maker ASML – has mastered this technology. Its systems, which can cost hundreds of millions of dollars per unit, are a cornerstone of the modern semiconductor supply chain used by giants such as TSMC, Intel, Samsung, Nvidia and AMD.

So, China’s effort, then, is not simply about building a machine – it’s about attempting to break a monopoly and securing technological independence. In fact, it seems as though it’s no longer about merely trying. But, have they actually succeeded?

What China Has Built And What It Can’t Do Just Yet

The secretive prototype reportedly became operational in early 2025, meaning it can successfully generate extreme ultraviolet light, a crucial early step in advanced lithography.

But, there’s an important caveat: the machine hasn’t yet been used to produce commercial chips.

Producing working, high-yield advanced chips requires ultra-precise optics, manufacturing rigour and a whole ecosystem of tooling and expertise. Even ASML itself spent nearly two decades and billions of euros in R&D before its first commercial unit reached the market.
Investing.com

According to Business Standard, Chinese authorities have set ambitious internal targets – public statements and insiders suggest an official goal of producing chips from this homegrown EUV machine by 2028. However, according to a plethora of analysts, it seems like 2030 may be a more realistic timeline given the engineering challenges involved.

The prototype machine reportedly occupies an entire factory floor and was built with the help of former ASML engineers, some reportedly recruited under false identities and generous compensation packages. Reverse engineering, secondary-market components and domestic research institutions such as the Changchun Institute of Optics have all played roles in getting the prototype to function.

Tech, Trade and Geopolitics Collide

The stakes of this “Manhattan Project” extend far beyond engineering bragging rights, although that’s certainly part of the game.

For over a decade, Western governments, especially the United States, have tried their best to limit China’s access to advanced semiconductor technology through export controls and sanctions. These policies aim to prevent China from closing the technology gap in chips that power next-generation AI, telecommunications and advanced defence systems.

If China succeeds in mastering EUV lithography and building a fully domestic semiconductor stack, those controls could lose much of their leverage. Beijing’s broader goal is to eliminate reliance on Western technology entirely, potentially reshaping supply chains, trade relationships and the balance of technology power globally.

It would also mark a milestone in China’s long-term strategy for technological self-sufficiency – that is, a cornerstone of national policy under President Xi Jinping.

This isn’t merely about economics – it never really is.

Semiconductors are now at the heart of both commercial innovation and national security. Advanced chips enable everything from AI systems and 5G networks to autonomous vehicles and next-generation weaponry. That’s why so many analysts see the outcome of this semiconductor race as pivotal for the decade ahead. The so-called secret (not so secret) weapon of the “AI arms race”.

A New Era of Tech Competition

China’s “Manhattan Project” for chips may still be in its early stages, and the gap with Western technology remains significant, especially in precision optics and production yields.

But, even the existence of a functioning EUV prototype just six years after the initiative began suggests that long-assumed timelines and technological barriers are shifting faster than many expected.

Whether China can achieve full semiconductor independence by the end of this decade is far from certain. But, if they do succeed, the global tech landscape – from AI leadership to supply chains and geopolitical influence – could look very different to what it does now, never mind what the US is hoping it’ll look like in years to come.

In other words, this project is more than a mere metaphor. It could be a defining chapter in the next wave of technological competition, and on top of that, it may influence geopolitics more than we already expect.